1546 - More on Fixing Grading

Foreign. Doctor James Beckett Sports Card Insights Thanks Sponsors Tops Panini Upper Deck Heritage Auctions Hugs the Scott Auctions, Mike Stadium Sports Cards, Burbank sports cards, compse.com and Beckett Media Beckett Grading Beckett Authentication not correcting what I said, I'm just responding some feedback and I've got some additional thoughts. Certainly not attacking the grading companies. It's really important that they get to the next level and so there's be some re engineering again. Content creators love having commenters and questioners and feedback. Thank you very much. Customer service Big deal. Whether you're communicating good news or bad news, the hobby is big and the Cobby wants answers. They want answers fast. So when PSA says we're going to invest 200 million, they want to know how's that going to affect me today or next month or my current submission? And it might not, but it certainly bodes well. You figure out pretty quickly is there's a lot of people out there that can grade in this industry. The problem is they're called dealers or flippers. The best graders out there with the sharpest eyes sometimes are making so much money working for themselves, they really can't afford to work for the grading companies. And I don't think the grading companies pay substandard wages. We certainly didn't at bgs. I don't think PSA is or any of them are paying low wages. There's a salary scale. As you become a more senior grader, you get more. But some of these dealers out there are already outstanding. They're making too much money to go work because obviously people working for bgs PSA is probably the same thing. You can't have a side gig of flipping cards based on your inside knowledge. There's a real skill being able to identify integrated slabs or raw cards that have the potential to grade well. I don't think some of these individuals who have that skill are going to want to go beyond grader and grade cards all day every day when they can be more selective. Frankly, if you can tell the difference between a PSA 9 and a PSA 10, you've got a real skill. That is the key skill there. With BGS, if you can look at PSA 10s to see if you can get a black or a pristine. So some of the best graders in the industry do not work for the grading companies. Now they may be pre screeners or eye appeal type people. So the bottom line is if you want more graders, you need to develop more graders, you need to train more graders. But people that already have that skill, maybe already are otherwise engaged and doing quite well. Thank you. So the grading academy, I think that's a good idea. That's how you would develop talent. If somebody wants to start a third party grading academy, go for it. I think people would pay to be able to say they graduated from that program. But that's a starting point. That's not going to replace the internal training that you get, certainly with PSA or bgs, the ones I probably know a little better because each company has its own standards. There's not one size fits all and I don't want there to be. I like the fact that BGS did some procedural things different than what PSA did. So to have a choice is good. And frankly, when looking at a grading academy, the PSA grading academy or the training program, they're trying to show you what a PSA 10 is. And I think the big difference with BGS and why BGS's training academy I think takes longer is because. Because you've got to train on the sub grades, which is an additional complication. And what hasn't been said is that the grading is toward perfection. You're working down from perfection and unimprovability. Whereas PSA is saying this is a 10, it's a 10 because it meets our standards. And BGS is saying, is this the best centering it could possibly be? Is this the best surface it could possibly be? Is it unimprovable? That's tricky. But in fact, the best graders, the ones that aren't working for the grading companies, know the differences between the different grading companies and what their standards are. I'm not in favor of anybody loosening or tightening their standards. Hobby is too sharp, if any company. And I'll just say bgs. If BGS were to loosen their standards, which I've heard mentioned by respected content creators, I violently do not agree. I think what we would see if BGS is too lenient is there would be a devaluing of the brand, if anything, bgs because of the grading against perfection. I've always thought we had a desire starting out to be at least as tough and to be really true to what the words meant. And if you do that, then maybe you're tougher. And the way you could say we're being too tough is if all of our nines were immediately purchased and cracked out and sent in to get a better grade at PSA. And that's not happening. A BGS 9.5, if it's cracked out, can get a 10 for PSA but not every time. You just don't know. But a Grady Academy could create a pipeline. It gives some candidates. We live in an entrepreneurial world and there's an opportunity if somebody wants to start an academy. I've spoken to the grading classes at BGS before and they're eager to learn and that's great, but it's very hands on and you need somebody looking over your shoulder. The other thing, there really ought to be three different lanes. I have modern sports being different than TCGS and being different from vintage. If you had those three lanes and you got this huge bottleneck, then I think ideally your training program would be six months and you train everybody to come in and grade because you don't know if you're going to get more or less TCGS or more or less of anything. But I think in this emergency status, I think cross training, which I'm a huge fan of, needs to go onto the back burner. That needs to be phase two. Basically, if somebody's a Pokemon collector, let's get them up to speed soon as possible and on the line. That goes for every company that grades Pokemon. But picking on PSA in the sense they're the ones that shut down, have the big backlog and a lot of that is tcg. I just think a TCG only training program surely would take a shorter period of time and same thing. If somebody's always been a vintage guy or gal, then plug them in that first. But I don't think that's where the bottleneck is. I think the bottleneck is TCG and modern cards. Let's put the cross training on back burner and just get them certified in that lane and let them rip and then cross train later. I would encourage people or give an incentive to submit by batches and the batch would not commingle modern sports with TCG with vintage because I'd want those batches to go to different graders. That would. That would speed things up. I don't know that people are against that unless their lane is going to be the one that's clogged up. Even though I'm a vintage guy basically that takes longer to grade, I believe. And in many cases I think the vintage guys with trade offs, the flipping is going on with modern sports more so than vintage and More so with TCGs. And time is of the essence for them. A lot of the vintage people presumably want set registry type cards. If it takes a little bit longer, they're not looking to flip. In fact, they may not be having it for resale. If that's the case, the separate cues could really be a positive. The loyalty points, I still like that it's not a rebate, but it gets you some privileges. It might get you to move up within a price tier. Again, speaking of psa, you might get a higher limit for what you can do in the value services where you're not bumped up immediately or as aggressively into the next service level if your value is higher. So maybe there's an adjustment, maybe your turnaround is preferred in some way. But how would you get the points? I mentioned a bunch of things in the last episode on Friday that if you're helping PSA or BGS be more efficient, then I'd want to give you points and I'd want those points to be worth something. So like I said, I got into the BCCG conversation and if I ever bring up bccg, people just get angry and they act like it's a cash grab when the sense is I was fulfilling a customer request with a purchase order. And if you can do this, here's our check, here's the business. Now they were forcing the cash on us, so I don't know. That's a cash grab. Again, I'm being a little bit facetious here. We made the slab so flimsy that no one would confuse it with with the bgs. Way more substantial slab with the inner sleeve with the sub grades and all that stuff that we did. It was not a serious competitor to bgs. It was a low end budget product. But when I get into that is that bgs when I give them cards I'm not doing any TCG but I do some modern and a bunch of vintage and they want me to group it and I think that is helpful. And if I've got more than one of a certain card, they'd like that to be together. That helps. Breaking it out by sport, maybe breaking it up by set, maybe breaking it out by player or numerically within a set. And I just think all those things could be helpful. If somebody uses the PSA vault, I'd give them some loyalty points. They're on the team. If they refer a potential grader, I'd give them a whole bunch of points. In BGS we had finders fees. If you referred a candidate that came to workforce and did a great job, you got a bump, you actually got some cash. But loyalty points. If you said hey, my brother in law could grade and you refer him and that guy does well then I'd want to reward that. I'd want to take away points if people are trying to get away with stuff or bad faith if they're misidentifying their own cards intentionally to try to make it look like it's the tougher version. All that stuff already. I think PSA does a good job of recognizing there's some perks you get for being at the top end of the registry. But I want to reward all the people doing the set registries and not just the hall of Famers. And all that eye appeal, I could go a lot more on that, but I don't think eye appeal is a number. But I appeal greatly. Affects value. And who better to do it than the grading companies? As if they don't already know. I think collectors think that graders have no idea that this is a beautiful looking card that is technically a two. It's technically a two because those are the standards. So I appeal in my world, I think cannot be a fifth number grade. Basically I have it as a plus or a double plus and I don't think anybody's really interested in negative. I appeal to have a minus or a double minus. If it's a two, it's a two technically. And if it's a better than average two, actually my two or three plus, if there's a plus, that means it's noticeably better than other cards of that numerical grade. And if it's a two or three plus plus, then it's how did this ever get a grade so low? I can't believe this is a technical three. It looks terrific. So that'd be like a three plus plus and there's algorithmic ways to do it. You already know if you had a report card and you would know this is going to be a nice looking card. But technically a low number. BGs is the one I'd like to see tackle it. Because if the PSA was to have a 10 plus that messes up their ecosystem, BGS, they already are way more granular. Okay. Surge pricing. Talked a bunch about that when I'm waiting for an Uber. If it's crowded or coming out of an event, the prices are higher. That's how they're controlling. PSA has lots of choices. They're being overwhelmed with submissions. They could raise prices. They could and did close the lower tiers, which that's their way of limiting submission, but they didn't have to do that. Could have let the backlog get worse and just tell people and. Or they could hire and train aggressively, which they're doing. They've made the decision to not accept cards on the lower tiers. And that makes sense that they're very profitable. Okay. I actually like the way they've handled it. It's better to have an honest fast lane, here's what the deal is, than be shrouded in mystery with a cue of not knowing where you stand. If they can tell you where you stand and there's a whole bunch of people in the same group of misery, we're just going to work through that. So try to reduce the frustration by giving people more information on where things are. But again, they've been number one for a long time and they're very powerful. But sometimes things are not forever, you don't know. So they have to to stay on top. They've got to hire aggressively. And if they raise their prices too much, it invites competition and frustrates in many cases, your best customers. But dynamic pricing can go both ways. Surge pricing. After PSA hires these thousand graders, there could easily come a time when they are under capacity and they want more submissions. And there may be people out there waiting for that because prices could go lower if they have unmet capacity. In fact, some people may be eager for that day to come. I think it won't be in the next year, but it could happen in a couple of years. But people are just going to decide, do I really want to grade this card? At least right now in the current climate. And it might be that I want to grade it later because grading is not always a good deal. You say this card really ought to be graded if grading is 10 bucks a card, 20 bucks a card, 30 bucks a card, 40 bucks card 50 card 60, 75. At some point grading is not a good deal and you ought to do that math. It's an economic decision if you're looking at resale. Rich Klein is 15 or 20% rule. I've heard that. But there needs to be a rule. You don't want to pay $25 to grade A card that's worth $25 unless it's not for resale and you just want the authentication in the slab. So otherwise it's an economic math thing. I'm wondering at the national if there's going to be more raw activity of cards that otherwise would have been graded and gotten back. Again, not on the high end because I think those will be back, but on the mid and lower ends, I think there's going to be a lot less there. I don't know if that's going to be a boon to rock hard reviews and services. Like that or some new grading company. I think the national will be very interesting to see what's going on with the reception for grading. I think it's going to big lines, but again those are in the higher level service at the National. At these other shows where grading is such a big deal, pre screening is going to be more important. Rock hard reviews can be more important. I'm wondering if there's going to be more than one. Perhaps booths at the national that have quick opinions. You can pay a huge amount of money to get this card graded with PSA or I can give you a quick opinion right now for a lot less money like raw card review. And it might just be an individual or it might be a booth that says we're buying raw cards. It's grading got you down. We will buy your raw cards and we will give you a quote on the spot based on what we think the card will grade with some wiggle room. But like I said, there's some great graders out there that are making a lot of money because they can tell. I'd like to see a seminar at the national about grading. One of the fun things could be is if each attendee got a grading test. EGS has a grading test they give people, but give each attendee a grading test before they start the seminar and if it's a couple hours or a half day or something like that. And then give them not the same test but an equivalent kind of a test at the end to see before and after if they've really learned a lot. You want them to learn how to be a better submitter, even though that could wind up being revenue negative. But also there could be loyalty points. Once they understand better what is involved in grading, they may be able to better recommend. They may say that's not for me. But boy, I know a person that really loves sitting at a desk for 10 hours a day and looking at cards and getting paid for it. So again, finders fees. Lastly, before I stop here, one guy said, I'm glad you titled that fixing grading because grading is a fix. It is fixed. It is a scam. I do not believe it is a scam, but I believe there are mistakes made. Nobody told me this, but I thought what people really want is a fourth lane. That is the slow lane for cheap cards that shouldn't be graded. And you would think that I would be against that because I'm the guy that wants to put a price on. Every card has value, but in reality I don't have a problem with that. And I'm not so sure that some of the people that have these cheap cards that are submitting, they're not going to like it. But a lot of those cards are not for sale. They're not paying 25 or 30 bucks to get something graded so they can flip it. They just want it. So it's like in the PSA vault, they're just going to wait a few extra months. So I actually don't have a problem with that. Then finally, from Ziggy, he just said, I wish Beckett were still independent BGs. And I appreciate that, and I am certainly loyal to the brand that has my name on it. But I've not been the boss for many years, more than 20 years now, and I don't always agree with everything that's done. But I do think PSA is starting out good, and I hope BGS can be part of this solution, whether independent or not. I believe they're getting some additional cards in and they're going to have bottlenecks, so they've got to improve their system as well. Like I said, I'm not the guy anymore, but I want to be a cheerleader for the industry. Grading doesn't have to be perfect, but it needs to make sense, and it needs to be something that is not hindering the growth of the hobby, but accelerating the growth of hobby. So keep up the good work, everybody, and I will be back with another episode in a couple days.