Can another grading company thrive?

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Posted By: Dave F

I used to submit/buy mostly PSA graded cards. That has changed the past couple years with dissapointing results from PSA. Many times they overgrade, cards with paperloss on the back get 4's and so on. GAI, well to me it isn't even worth mentioning GAI anymore. So what is the likelihood that a new grading company could emerge and rival SGC? What would it take? How long would it take? For practical purposes I'm not considering Beckett either as their mainstream is obviously modern material. Can/should/would a startup company be able compete with vintage material alongside SGC? If so, would you even give them a chance or are most people just happy pappy with SGC and wouldn't even try submitting to a startup company?

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Posted By: barrysloate

There are currently more grading companies than we need. The only way a new one could possibly succeed is if they could do a better job than everyone else.

Part of that is listening to collectors, and having a pulse on the market. I think each of the grading companies around today, while possessing varying degrees of competence, would do better if they could see baseball cards from the eyes of a collector. This would entail a greater emphasis on eye appeal, and a lesser one on technical flaws.

At the end of the day, collectors like cards that look great. Sometimes that is overlooked when a card loses significant points over, for example, tiny paper loss on a blank back. If a new grading company could understand this, I think they would have a reasonable chance to prosper. Otherwise, we already have too many grading companies.

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Posted By: Peter Thomas

Eye appeal should be a larger component in the grading. I really like SGC, but they really do hammer some beautiful cards. Which does sometimes give you an opportunity to get the card at a low price. Marilyn Monroe, if graded, would be hammered for that pesky mole on her left cheek - no not that cheek.

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Posted By: Dave F

Barry-

Your right there are plenty of fly by the night grading companies out there, ebay sellers putting "slabs" on cards themselves and everything else. I'm talking about a bonafide grading company emerging to actually challenge SGC for the vintage pre-war market. Would it take one of the former head hunchos with GAI or PSA or even an SGC employee going his own direction and starting up an outfit before someone would give the benefit of the doubt and slowly start some submissions the way of this "new" company?

By the way just for the record I do like SGC, just was curious if they have a virtual hold on the pre-war card market for the forseeable future or could they in fact be challenged by a from the gound start up company.

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Posted By: T206Collector

...is subjective. Grading is objective. Grading is most important for those eye-popping cards with hairline creases and minor spots of paper loss or glue. That is what makes SGC so valuable.

Grading is not about framing the beauty of a card within the confines of a 10-point scale. It is about objectively identifying faults in a card that the casual observer (or internet purchaser) would miss.



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Posted By: Dave F

I don't disagree Paul. The question is can someone else start up a grading service and compete at that level of consistency with SGC..would it take a Mike Baker type guy or the likes?

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Posted By: Matt

Dave - I think BVG has a much better shot at competing with SGC in the vintage space then any new startup would. BVGs slabs are the most well designed of the big 3 (UV coating, waterproof, etc.), and they also offer a larger slab size then PSA & SGC. Personally, I prefer the black insert in the SGC slabs, but I'm not aware of any complaints about BVGs grading standards (it seems the PB T206 issue from last month was resolved).

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Posted By: T206Collector

....Google or Apple make a slab.

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Posted By: leon

"Grading is objective."

Really? Maybe it's supposed to be but I can't think of a statement that is farther from reality.....
AND I do think third party grading is still way better than no third party grading.....

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Posted By: barrysloate

Eye appeal is subjective but grading is objective.

While that is ostensibly true, in practice grading is far from objective. If it were, cards being resubmitted would rarely or ever get a bump to a higher grade. I think it's been proven that grading is too subjective, so why not take eye appeal into account?

I'm not suggesting that technical factors be excluded, but that a little common sense be applied when evaluating them. My pet peeve has been how Old Judges are graded; do you think collectors prefer square corners and a light photo, or rounded corners and perfect clarity? That is a situation where graders have to bend the rules a little bit.

I would certainly like to see grading become a lot more objective. I would like to see it reach the point where resubmitting a card results in virtually no grade bumps, so that that practice becomes obsolete. I don't blame the resubmitters for continually sending their cards back, as they have clearly discovered a loophole in the system. Grading is in fact too subjective and that is not good.

Imagine a college student who hands in a paper, gets a grade of C, asks the teacher to look at it again, then gets a C+, then asks the teacher to take one last look, and this time gets a B. It sounds ludicrous, but this is what happens a little too often with baseball cards.

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Posted By: T206Collector

You guys are missing the point.

Grading is designed to add an objective and neutral third party opinion to every baseball card transaction involoving a card with hidden or not readily identifiable flaws.

If you use grading for any other reason, then you are bound to get frustrated by subjective considerations like "eye appeal".

Now since we are dealing with humans and not machines, there will always be a subjective component to applying the objective principles of grade. But to suggest that third party grading is primarily subjective would be to suggest that third party grading provides little objective information at all -- which is ostensibly false.

Again, use the numbers on the flip to give you information about what flaws the card has. I can't imagine using them for anything else.





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Posted By: Alan

Here's an idea. Why don't the Net54 members form a grading company ? Collectors could submit them them to the grading group committee & you all vote on a grade. Oh hell yeah !!!

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Posted By: barrysloate

How about I rephrase what I said:

Grading is in theory objective, but the standards are far too loose for my satisfaction.

And with regard to eye appeal: suppose you had two Old Judges with exactly the same amount of wear, and one had a blurry photo and the other was crystal clear. Do you think the cards should receive identical grades, or would you prefer to see the one with the perfect photo receive a one grade bump over its counterpart?

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Posted By: packs

what do you guys think about the possibility of the grading services going out of business in the near future? say 15 years from now? i've noticed a huge drop in the amount of vintage material becomming available in raw form. it seems like almost all high dollar vintage cards are in slabs by now. i suppose there will always be a market with newer cards, but with respect to high dollar cards from the 1880s-1960s it seems as though most cards are graded, even with respect to commons just to prove authenticity. i suppose there will always be the business of crossovers, but for how long? and what would happen to the value and grades of your cards should PSA or SGC go out of business?

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Posted By: barrysloate

The stronger companies will survive, the weaker ones very well may not. That's the way it works in business.

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Posted By: T206Collector

<<Do you think the cards should receive identical grades, or would you prefer to see the one with the perfect photo receive a one grade bump over its counterpart?>>

You need to distinguish grade from value -- and divorce yourself from the notion that two cards of the same grade deserve to be the same value.

Grading does not need to tell someone whether the photo is blurry -- to take that into consideration is basically a useless piece of information: everyone can see blurry.

Now, if both cards are graded the same, the buyer will always choose the clear photo over the blurry photo, all else remaining equal.

Why would you need a card with a blurry register to be a lower grade?


edited to add: the only reason you would want grade to reflect register would be if it was subtle and not easy to see. I guess I could see the value there as providing some info.


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Posted By: barrysloate

Well, if everyone can see blurry, I will assume that everyone can tell square corners from rounded ones. In that case, all we need is for the graders to authenticate, and the consumer can grade his own cards. I've been advocating this for a long time.

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Posted By: Matt

Barry - I agree with your position and have one small improvement.

Because so many cards these days are sold without direct contact, it would be useful to have the flaws enumerated - for example, a wrinkle can not show on a scan at all. I'd suggest that the cards be labeled "authentic" and the grading company have a website where someone can input the cert# and get a list of the issues with the card (even including things visible on scans). Then we can all weigh those flaws ourselves when valuing the card.

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Posted By: barrysloate

Matt- that's an excellent point. There are plenty of things that can be done to improve the system, so to get back to Dave's original question, a new grading company could enter the marketplace if they can find a better way to do things.

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Posted By: Alan

In expanding what Matt said, perhaps the grading companies could have a detailed report for each high end/rare/scarce card. It would be like the descriptions you see in the auction catalogs. Maybe the grading companies can/should/will charge potential buyers extra money for that info...

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Posted By: T206Collector

...in favor of a system of just authenticating and identifying hard-to-see defects. But the flip side to the grading coin is the dealer trying to pass off a VG card as EX just because of slightly rounded corners. A huge plus from grading is taking the dealer's inherently biased description out of the equation. What grading did is basically standardize everyone's concept of VG and EX and Mint.

Whether or not a card registers as blurry is Mint or something else is not really up to the grading company. It is up to the industry. E.g., crease means VG or less is really an industry standard that the grading companies adopted. If we all agreed tomorrow that crease can mean EX, then that is not a grading company issue -- that is an industry issue.



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Posted By: barrysloate

A dealer who calls a card with rounded corners Excellent won't stay in business long, because his competition will do a better job. Once word gets out that so-and-so is an overgrader, that dealer is going to lose serious business.

And most transactions today are conducted with scans, so if you put a crappy card on ebay and call it Excellent, you will get a really low price.

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Posted By: T206Collector

Scans in today's market make objective grading terms totally irrelevant, if you ask me. The phrase "VG-EX" was important if you were listing your cards in a print catalog.

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Posted By: Jason L

no

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Posted By: Dan Koteles

but they too will have friends and family plans as well as innacursies. Doctors ,lawyers ,carpet bootleggers (like me)etc....everyone wants others to be perfect while allowing themselves for error....guess thats the way life is !

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Posted By: MikeU

GAI is still alive, but if they could not truly succeed with their experience that they took from PSA, I am not sure if anybody could and be very finanically sucessfull. Another failure was SCD. If they could not do it with their brand name and have it make financial sense, then few others could even dream about it.

In short - No.

For the market size, there are too many (the big 4) that exist already. The annual revenue for the entire card grading industry is probably somewhere in the neiborhood of $12M dollars and you have 4 companies fighting for this. Talk about hyper-competitive.

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Posted By: Fred C

Just my opinion -

I think it would be difficult for another grading company to make a go of it. PSA may have the most submissions but SGC has taken a bite into the vintage grading card market. GAI had a chance but they really blew it. Even early on with GAI I had my doubts because it looked like they were assigning numerical grades to trimmed cards. BVG has a name but I still think advanced collectors look to PSA and SGC. I really liked SCD grading because I thought they were better more consistent than all the others. Since they sold out to someone else I doubt they'll make a come back.

I think that a new company, even one backed by respected collectors, couldn't gain market share. The only way a new company would survive is to charge about 5x what SGC or PSA charges and that company would have to be spot on with each grade. The company would have to be accepted as "the authority" in grading by vintage collectors across the country. The only problem with this scenario is that the new company would have to be consistent in it's grading and that would probably mean lower grades for cards. Nobody wants to submit a card with the expectation of a lower grade than would probably be received from SGC or PSA.