Are We Headed for a Card Grading Price War?
The big four graders (PSA, SGC, BGS, and SGC) set yet another combined record last month for total grading volume. At the current rate of increase, it won’t be long until they are grading two million cards a month. A closer look at the numbers though reveals some cracks in a seemingly strong foundation and it is possible that the unthinkable will happen and we will return to the days of regular under $10-a-card grading.
Record growth means price cuts? Basic economics means there is some explaining to do. While BGS and CGC are doing well enough with their overall numbers, their strength in the TCG world masks a weaker performance in sports. PSA and SGC combined last month to grade an amazing 852,600 baseball, basketball, and football cards compared to just 48,900 for BGS and CGC combined. In other words, PSA and SGC graded 95% of the major sports market.
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The low totals for BGS and CGC are from months of decline. CGC graded 73,300 cards from the big three sports in their biggest month and BGS was once the biggest grader in the industry. Some recent changes have put CGC on an upward path, but there is one clear thing that can improve grading volume and that is lowering prices.
It is not a coincidence that CGC’s decline in grading volume started when they changed their bulk grading rate from $8 to $12 per card. SGC has positioned itself nicely as the number two grader in the market in large part based on their effective usage of $9-a-card sales. Unsurprisingly, lowering prices increases grading volume. In an uncertain market, it is the only almost guaranteed path to growth.
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Grading premiums have declined from their pandemic peak for ultra-modern cards meaning that demand for BGS and CGC cards is unlikely to spike suddenly. It also means PSA and SGC will also have to work harder for business. BGS and CGC have dabbled with price cuts and sales, but as they try to regain market share in the sports world it is possible that bigger grading price cuts are ahead as the competition heats up for market share.
