PSA SHUTS DOWN! What's YOUR Next Move in the SPORTS CARD Hobby?
May 03, 202112 min read
I’m sure you've heard by now that on March 30th PSA suspended nearly all card grading services. The only service levels currently open are super express at $300 a card and also walk through services which are $600 a card. The suspended service levels account for 97.9% of all cards submitted to PSA. Their goal is to bring back all the suspended service levels in July of 2021. In today's video I’m going to be talking about:
Why is PSA doing this?
What can PSA do in the future to prevent this from happening again?
The effect on other card grading services.
The effect on graded card prices.
Your game plan going forward.
#1: Why PSA is doing this?
We all know PSA is extremely backed up. No one has an exact number on the amount of cards that they have there but it's in the millions that they’ve got to go through and process and grade, and they're doing this as a good faith effort to finally catch up to all that huge backlog they have. Kudos to PSA for doing this. It's never easy to turn down business especially on a company that was just recently acquired for almost a billion dollars, but apparently they've made this the decision that they were never going to catch up. Given the current amount of graders they had and the amount of cards they were receiving and the amount of cards they had in the backlog there. So they had to do something. For everyone that said “PSA doesn't care about their customers” and all that kind of junk, obviously this says something different here. They're making, again, a good faith effort to catch up on all those cards. PSA could never foresee the amount of cards that were going to be sent to them. I mean it's just astronomical the amount of stuff that they've received. So again, they're just doing the best that they can and I think they're doing a good job so far to try to get this thing rectified and get these cards back to people.
On top of this, according to PSA's April newsletter. They have recently added an additional 58,000 square feet of office space and this is on top of the 62,500 that they added a couple of months ago. So they are planning on a big expansion there to help serve their customers better. They currently have 783 employees, this is compared to the 421 that they had in January of 2020. So they're actively hiring, and you know, PSA is taking big steps to improve their business operations as well as their customer service. If you know anything about grading or about hiring, hiring takes time. It's a process and it just doesn't happen overnight. You've got to train these people up to all your standards and it just takes time to do that.
#2: What can PSA do to prevent this backlog from happening?
I'm positive PSA doesn't want to see this huge backlog. A little bit of a backlog is okay, but millions and millions of cards is obviously unacceptable. They've recognized that and they've admitted that as well, so they're doing steps to prevent that, but what can they do to prevent this from happening again? The obvious answer is they've got to hire more graders. I mean, if PSA's current graders right now can grade 30,000 cards a day, but they keep receiving 60,000 cards a day, you can see how they were never going to catch up. For example, they've got 300 graders let's say, and they're doing 100 cards per day. That's 30,000 cards that they're able to crank out. If they're receiving those 60,000 cards they're actually going to have to hire 300 more graders just to get through all the new cards that they're receiving on a daily basis. That doesn't include even touching the backlog.
So obviously hiring is their biggest issue right now and again if you've ever done any hiring you know that this can be the most challenging part of any business. Finding the right people with the right skill set who can follow a process and implement what your brand is trying to do and follow customer service protocols. That can be very, very challenging, and takes time to train those people up there. Especially on something that is so subjective as card grading, and you want to make sure you have great processes in there that you get in some consistent grading for all your customers. I bet they set this July date, I'm just guessing here, based off of the amount of new graders that they're potentially going to be hiring there up until July, and I think that's when they're thinking that they're going to be able to not only get through all the current cards that they're going to be receiving on a daily basis but hopefully have enough graders on site to prevent that backlog from building up again.
Still, for PSA, automation is going to be absolutely critical. At some point software has got to take over for card grading. It's just kind of like the writing on the wall. I'm not saying we can't have human graders anymore. I think that definitely is a huge part of the business there, but anything they can do to streamline grading where the software maybe reads just the surface of the card for scratches and all that kind of stuff so the grader doesn't have to look at that. Anything that takes the card out of the human graders hands quicker right? The less time they have to look at a card the more cards they can get through on a particular day, but also automation on identifying the card so it’s getting logged in their system quicker. Just seems like Panini and Topps and all these guys are making so many different sets of cards now it's almost hard to keep up. Of course, PSAs got to identify these so they can put the correct information on the label so that way they have consistent slabs all across there. Again, that takes time to research what that card is and put it in the system. Anything that they can do to automate that process to make that quicker that will definitely be a huge advantage.
But again, it all comes down to hiring more graders. PSA right now is a little bit limited in that area and the reason why I say this is they don't have any remote graders at this particular time. I think that's going to be in their future, but again they're based in southern California which does have a large hiring pool to pull from, but it's not like you can just find graders all over the place like you can delivery drivers. It takes time to hire all these people, but they've got a limited pool to pull from there in southern California because they don't have remote options all across the country as of right now. I do see them potentially having some remote options there, maybe in Canada or maybe on the east coast to help kind of ease the burden off of the southern California office, but again software is the key.
#3: The effect on other card grading services.
Like I said in one of my previous videos. What a great time to be alive if you're a card grading company. I mean, this is like the rush. This is the gold rush of card grading, right here, right now, and this is time to step your game up. Over deliver on everything if you can. Especially your customer service. If I owned a card grading company, which you know maybe I should do. It seems like all the card grading companies all have these three letters to everything. HGA, PSA, BGS. You know, I'm gonna open my own up and I'm gonna call it PSMG. I'm gonna do four letters just to be different here. Powers Sports Memorabilia Grading. You know that sounds like a 1990s rap group or something like that.
But you know customer service is so critical in card grading, and it's not just like “Hey listen, your cards have arrived.”, but it's like say “Hey listen, we received everything, this is the estimated turnaround time.” And if you can't meet that turnaround time you let the customer know. Most people just want to know that the wheels are turning on their cards. That's all they want to know. About the worst thing that can happen is cards are just sitting there and the customer doesn't know about them. So if I own one of these companies I would just be overly delivering on customer service notifications, updating on turnaround times, having some information on my website. These are our exact current turnaround times.
You may lose a little bit of business there, but the ones that will submit with you, you will definitely earn and keep those customers, which that is going to be the most critical thing right here these next three months while PSA is shut down. Again, more cards are going to be coming into these card grading companies than they've ever seen before. It is just going to be a big test for their employees and a big test for their systems.
If I were CSG or SGC or Becker, I would be hiring as much as I could. They probably already know that, but it's just a great time to earn some business from some PSA customers. You might see some rates increase to maybe stem off some of the amount of cards that they're going to be getting. Kind of similar to what PSA tried there. I did read though however from my PSA submission group which is gemmint.com. Jared's the guy that run this and Jared's been in the card grading business for a long time. Jared just recently posted this. He's saying that BGS is actually further behind than PSA and that CSG is already three months behind even though they've only been grading cards for six weeks. So that is very interesting information. SGC already stated they are caught up and expect by the end of the year to be grading 6,000 cards a day. Jared was saying though that 6,000 cards is less than 20% of what PSA can do in a day, so that very interesting data coming out of Jared at gemmint.com.
#4: The effect on graded card prices.
I'm of course talking just about PSA right now. Well you know PSA is going to be catching up on all these cards and of course you know there are certain cards that are going to be dropping in value, and the ones that I'm seeing for the cards already graded that are going to be dropping in value are those ones with huge population reports. You know, the cards like Zion's 2019 Prizm or Luka’s 2018 Prizm. There's a ton of those sitting there at PSA and as they start going through those and getting those out into the marketplace of course that's going to increase the supply. Plus, eventually basketball is going to go into the off season very soon here. We all know in the offseason there's always typically a big dip in card value, so if you own some of those Zion 248 Prizms any of the Luka 2018 Prizms, I would think about selling those right now. Again, there's probably a ton coming on the market again.
The off season is just around the corner, might be time to get rid of those. On the flip side, if you are looking to pick up that card you may want to wait about one to two months, or wait until the off season. Wait until that flood of cards comes onto the market and you may be able to pick up those at an absolute bargain price. You know football Prizm came out a couple months back and we are going to be losing essentially three months of grading for football cards at this particular time. Football season is going to start in September. You're not going to have enough time to get something to them in July and get it back in September. I'm thinking, Justin Herbert, Joe Burrow, all these other rookies that were graded already, there's probably not going to be a ton of those coming out.
Yes, there is probably a decent amount at PSA right now, but again we're going to be losing that three months of grading so football cards are probably going to be a little bit in short supply.
#5: Your Game Plan Going Forward.
Probably the most important thing here is your game plan going forward. PSA is out of the picture for the next three months, unless you want to pay 300 to grade a card. I don't, but some people might have a huge value card and they choose to do that. I would still give CSG a try. I did a video on how to start a sports card collection for under 500 using CSG to grade your cards, and you know they're already a bit backlogged. I think they'll work their way through that and again you just cannot beat the pricing with them at eight dollars a card. I've sent out so far two submissions. I've sent off one directly to CSG to try them out and see how other processes go and see how everything works out so I can report back to you guys. I also sent one off to KK sports cards (kk_sportscard: Instagram).
They are a submission group for CSG and what's nice about using them is they have only a 10 card minima on that bulk service for $8 a card. So I'm gonna try them out as well. They have one submission for me and I will report back to you guys on how that went as well. But again, $8 with no sub grades and 60 day turnaround time, that's their state of turnaround time, but again they're about three months behind as of right now. If you don't want to use them, SGC is probably going to be a solid option right now. They're about $20 a card and again it looks like they are decently caught up. They're gonna probably be getting slammed with more cards. Also, $20 a pop, I mean that's still cheaper than what PSA was for their 45 day turnaround time.
I went over the options in a previous video, I'll go ahead and put the link up here you guys can go ahead and watch that and learn about all the other companies there. Beckett is probably gonna get even more slammed and I would not be surprised if they start turning down cards as well. They're probably out of the question here. I would not even really try to get cards in with them right now. You're just gonna be sitting there and not making any progress. HGA is gonna start getting more eyes on them but again they're limiting the amount of cards that they're doing per week you've got like a 1% chance of getting cards in with them, but I do really like their slabs. I wish I could get in with them, so if you guys have gotten in with HGA comment below, let me know how it went for you and how happy are you with the slabs. Are you unhappy with them? Have you sold any? I'm curious to see about how those HGA slabs have been selling. Again, your last option is just hold your cards until July hoping that PSA re-opens up those service levels, but that's not guaranteed. They may find out they’ve got to extend this a couple months and then you may be kind of stuck there. So I would probably be making a move right now. Try out one of these new card grading services.
In conclusion here, the next three months are going to be very, very, interesting in all the trading card industries here. Three months is a good amount of time to get a submission back at their service levels with one of their competitors. I think you can do that at a decent fast rate with SGC if you want to pay an upgrade there you can get something back in three months no problem. If you pay that upgrade, same thing with CSG, I think you can pay an upgrade and get those cards back really quickly without doing their bulk service. It's just gonna be crazy to see what happens if PSA re-opens up in July and then December rolls back around and they're right back to where they started. Overall I think this was the right move by PSA. They had to do something, they just saw the writing on the wall, the numbers just were not working. I think in the long term this would be good for PSA too. It'll give them the chance to hire more people and of course smooth out some systems, but again, did they just open up Pandora's Box? I think that is going to be the critical question here.
It is a huge opportunity for those other card grading companies to over deliver on their customer service. People will appreciate that and you will earn some of those PSA customers, I guarantee you. Either way it's a big win for the hobby, right. People who have cards at PSA like me and like millions of other people will hopefully get those back here, and you know you can get a chance to try out these other card grading companies. Again, this is going to be very, very, cool to see how this plays out. I'm super excited and I really hope one of these card grading companies really steps up and earns the business of some new customers.
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