Episode 106 PSA Shutdown Strategies

Welcome back to Sports Cards and a Cup of Joe. This is your host, Joe Davis, and it is great to be back with you. And if I look tired and weary, it's because I am. And if you see me repositioning a lot, it's because my back's killing me and because I've been hunched over screening cards for the last few nights. And we sent out so many cards to PSA in the last week, as many of you did. And I was, I can say I've never been more proud of my team because we had a massive amount of submissions to handle both for our clients and ourselves. And we got every order sent, sent in and I'm just so proud of my team. They worked so hard to get everything out. We literally had a submission arrive here at 5:31pm Eastern on Tuesday the 2nd, and we got it entered in the system just under the wire. So, you know, as I look over the last few days and what's happened in our industry and the fallout from the big PSA announcement about them shutting down all their lower level services for several months, remains to be seen how many months that turns out to be. But you know, no matter what they did, it was a no win situation because if PSA had just unilaterally said, hey, we're cutting off submissions today, everyone who wanted to get another order in would be upset. And if they did what they did, they created an even bigger backlog. And I'm hearing, I don't know any exact numbers, I haven't talked to anyone there about it, but I'm hearing there were millions, plural of cards submitted over the last five days. Millions of cards entered in their system. So by announcing the shutdown, they actually took in even more submissions. They probably took in, I'm guessing six weeks worth of submissions in five days. And that's at the crazy volume that they already take them in at. So again, it was a no win situation for them. They created a bigger headache in terms of the volume. They've got a process now, but I feel like they did it the right way in the sense that they gave us time, they gave us notice to get those last minute submissions looked at and sent in. I personally went through so many collections, things I've bought recently that were like, hey, I've got to get to that, I've got to get to that. Well, I got to it and it was exhausting and tiring. But we have set ourselves up with a lot of graded inventory for 2027 because I know we probably won't See a lot of those cards until then, but I know many of you are now asking the same questions. Each of our clients that walk in the doors today will be asking those of you who submit cards, those of you who use PSA and you want to send things at a more affordable level than $80, which is now what we're charging on regular service submissions. And we don't know when that's going to happen for people, when a lower level is going to be available again. They said, you know, one statement said it was maybe four months. So which that means we'd be looking at early October before we could submit again. But honestly, after the rush of orders that came in, I don't know if they even projected how big their backlog was going to become with everything that's now in transit to them, all the orders that have been submitted. So a lot of friends in the industry are saying, I don't think we're ever going to be able to submit there again until December or January. There's a lot of speculation. No one knows. PSA doesn't know yet because they're going to have to figure out how quickly they can make progress on the backlog. And so all of that remains to be seen. So what I want to talk to you about today is the same thing we're doing is formulating strategies for those of us that handle a lot of graded cards, process a lot of submissions with different grading companies. How do we proceed now? And we were already offering BGs, CGC and SGC as grading options. We have been for years. We've been with all of them for decades other than cgc and we've been with them since their inception. So I want to spend a little bit of time today talking about each of these companies as the grading alternatives that are out there right now for the companies we work with. We have respect for each of these companies. They are all well known names in the industry. Of course BGS and SGC are owned by the same parent company that PSA is owned by, but they are standalone divisions. And I literally spoke with one of the leaders at PSA when he informed me of the pending shutdown of these services. And I said, okay, do you know how this is going to impact BGS and sgc? And he just told me, no, they are still independent as far as their grading divisions and that PSA is not making a decision on their behalf. So they're owned by the same parent company, but they run independently and that means that they will have to make decisions on their own in terms of what backlog they have, how big that backlog becomes, what they are comfortable with sitting on. Because based upon the 2021 shutdown, as we lived through that, we were handling massive amounts of submissions then too, we saw a dramatic increase of grading with the other companies. So let's briefly talk about each one. What I think is going to happen, what I might recommend and what some of you might end up doing. Now, I had a long talk with Doug, Doug Giles, our head of grading here, head of screening, I should say, he handles our grading, oversees our grading division. And he told me that his recommendation to someone who is in this for the long haul, they're buying cards, grading them for investment, long term resale value, et cetera. He said his recommendation is going to be get those cards screened if that's a service you want to take advantage of with us, make your decisions about what you're going to hold for grading later and get everything else shipped back, which is something we're going to offer that we're currently offering. But he said his opinion for long term resale, that it's not a bad option to play the waiting game, to just wait things out until PSA reopens cheaper services. That's one very strong opinion. Plenty will have that opinion. And what I saw last time, we did have many submitters who did that. They waited and they said, I'm just going to wait till PSA reopens. They waited a really long time. But there are some good alternatives out there as well, especially in certain categories of cards here in the industry. So let's start with bgs, because we've seen an immediate spike in demand for bgs. We've had a number of inquiries already. Just this morning I was answering an email from someone who had a number of actually old PSA cards. Old in the sense that he already has them graded and he wants to crack them out and try them with BGs. And normally it's the other way, but we handle that service either way. So he's submitting a number of cards to us to send to bgs. Now, bgs, again owned by same parent company, bgs. I've seen a lot of demand with Pokemon with them lately and one piece. And one of the reasons is both of those TCG cards, they grade really well. There is strong possibilities of getting BGS 9.5 grades, pristine grades and even black label 10 grades on those cards. Small percentage there, but we do see it occasionally. So with TCG being the biggest percentage of cards being submitted in the industry right now. BGS is a great option for those who want something graded right now, bgs. Also for those of you this is kind of an outlier situation. But if you have oversized cards, BGS has the cheapest entry point for sending oversized cards. They are much more affordable than SGC and psa, even when they're offering oversized options on entry level. So BGS is a great option. I personally just sent in some Michael Jordan oversized Box Topper cards from the mid-90s, just sent those out to BGS. So BGS is a great option. They're highly respected in the industry. The resale value is not nearly as much as PSA in most cases, but they do give you that possibility, especially in the modern market of getting those pristine grades and those Black Label 10 grades. And if you're not familiar with that, since BGS offers the sub grade option, when you get all 10 sub grades on corners, edges, surface and centering, you get a black label 10 which brings a premium over gem met grades with BGs and over pristine 10 grades with BGs. So those are very sought after, they're very tough and they don't happen very often. But that is the one kicker that BGS has going for them that many submitters try to take advantage of. So we're currently offering BGS grading both with sub grades and without sub grades. And so one great thing about BGS is that unlike psa, there's not a cap at what level you can send a $10,000 card in at those entry level prices. Now with us, and with BGS you still have to cover additional insurance charges if you're doing that. But the pricing for the grading alone does not vary depending on the value of the card. So they're a great option. Lately we've been getting submissions back from BGs in about three to four months, which is way quicker than we're typically seeing from PSA right now. But it remains to be seen if they can keep that up because I'm sure they're about to get slammed with volume. Alright, let's move on to cgc. CGC is also a great option if you're wanting to get cards graded right now. CGC far and away comes in second place in terms of volume. And I report that based upon the site gemrate.com that's gemrate.com for instance. I was just looking yesterday, they reported Items graded on June 2. PSA did 81.5 thousand, CGC did 22,000, Beckett did 8.7 thousand, SGC did 1.9 thousand so they are far and away in second place in the industry now in terms of volume. CGC is very respected, especially in the TCG realm. Their Pokemon resale value is very good one piece. Other hot TCG cards, now they're not up to the level of psa, but no one is there. But CGC is a great alternative for TCG grading. They're not quite as respected on the sports side yet. Where I was talking about Beckett earlier, bgs. BGS is very respected with both TCG and sports cards and CGC is far and away in second place on all total submissions. But they are best known for their TCG submissions which is a good place to be right now since that's the number one trending thing in the industry to get graded. All right, we do offer CGC service have for many, many years. We offer that at $20 a card and we offer if you do 10 plus at a time, it's 17 a card for their economy level service, which is actually faster than their bulk level service. So if you need help with TCG cards or sports cars that you want to grade with cgc, just let us know. Alright, Moving on to sgc again, SGC also owned by the same parent company as psa. They are not doing nearly the volume of some of the others. They're doing similar volume as BGS is sgc. To me, their niche still is vintage sports cards. SGC is still very respected in the vintage market. I personally still grade a lot of stuff with them. I've graded a lot of vintage non sports with them lately. A lot of like 1930 Mickey Mouse cards and some older Scooby Doo cards, stuff like that. And SGC is still very respected, more so in the sports side of the industry than the TCG side. They do very little TCG compared to what they do in sports. So they are still a great option. Especially for sports card submitters. Especially for vintage sports card submitters. So their turnaround times have been about like BGS lately. We've been seeing about three to four months and if you need assistance with them, we can help you with that. Again, different opinions in the industry. Literally our team member here says I would recommend depending on what the cards are, maybe just wait it out. But understand some of you want to turn those cards right now. You want to get them graded, you want to get them back, you want to get them sold and you can't do that if you're sitting on the sidelines. So I'm trying to give you some strategies of where you can go and coming next week on my next Episode, I'm going to be rolling out a major announcement about another service we're going to be offering to help graded card customers right now at this time in the industry. Something we've been working on a very long time. I'm super excited. Wish I could tell you right now, but we're putting the final touches on it so we can roll that out soon. But it will be another way that we can assist submitters and collectors in the industry. Now, beyond what grading company to use, there are other strategies that you need to consider. And what I mean is buying strategies one way to take advantage of this situation where PSA has shut down bulk level services. Honestly that is going to deincentivize a lot of buyers because you can't go buy quantities of cards and grade them with PSA affordably right now I know some of you will say, hey, the pricing that they were at was not affordable to me. I get it. You know, I loved back in the day when I was paying $6. That's been a while. But the bottom line is there are opportunities out there. I was speaking to a team member here just a couple days ago and we're working on buying strategies to buy up large quantities of cards that we will grade after PSA reopens. Or we might grade some of them with one of the other three companies I've discussed and then hold some to grade with PSA when they reopen because we believe there are going to be a lot of opportunities. Because whereas a week ago, two weeks ago, there were many buyers out there for certain cards, especially more affordable cards, and the purpose in buying them was to buy them, to send with psa, to get them graded, to resell them at a profit. And now that opportunity is gone for many months. I don't know how many, I'm hoping lesser than greater, but we don't know. I mean, I'm hoping PSA comes out in two months and says, Hey, 30 days we're going to reopen. I don't foresee that. And I'm trying to be really honest and transparent with you of what I expect. I don't expect that. So I think it's going to be more on the four months or longer side based upon the huge crush of orders that just got sent in because they basically have taken in one to two months worth of additional submissions in less than a week from everything I'm hearing. So there are many opportunities out there in a down market. Speak to somebody who buys and sells stocks Which I do, but not like a major stock trader. So there's opportunities in a down market, there's opportunities in a booming market. You've just got to have the right strategies in place. And one of those strategies right now could be buying up cards that you can grade later. There are cards being released. You know, all think about this. Every new product coming out over the next three, four months, five months, whatever that is, unless someone is grading them at PSA at the regular service level and paying a premium to do that, all of us are in the same boat in the sense that all of us who are going to submit at the bulk level, whether that be October, November, December, whenever that is, on all of these new products, we're going to all be sending them in at the same time when that reopens. So now is your opportunity. When those new products come out, if you're ripping them, if you're buying up stuff on ebay or fanatics, collect wherever you're shopping, when those products get ripped and you're holding them like everyone else is holding them, you're all going to be submitting at about the same time. You're all going to be getting them back at roughly about the same time. So no one has an advantage over you. You have this huge window for the next several months to accumulate inventory, which we will be doing ourselves. We will be submitting with the other companies as well, but there will be certain things we earmark to hold until PSA opens again, the lower level services. So I know this is a frustrating time. I wish I could be taking in all of your submissions that you want to send to PSA for the next several months. But this is the world we're living in in the industry right now. That opportunity does not exist right now. As of June 2nd at 6:00pm Eastern, 3:00pm Pacific, that opportunity went away. So I don't know when it will be back. But there are opportunities to accumulate cards. You know, we have already had a number of submitters who have told us they want to send their cards in, they want to get screening, and then they want to hold them until PSA reopens. And some of them are choosing other grading options. So what I want to make clear in this episode is that PSA may not be taking in lower level submissions right now, but that doesn't change the fact that there's still a need in the industry for screening for grading. Those needs are still there. They're not going away just because PSA's service on the lower levels has gone away temporarily. So we are here as a company in the industry for 35 years to assist collectors, to assist clients any way, shape or form, with grading, with prescreening, as well as this other option will be rolling out next week. So we're here to help you. It's a challenging time, but when there are challenging times, there are also many opportunities. And so we're here to help you take advantage of the opportunities that are out there. We are here to help you with consignment as well with reselling the slabs you already have. Because the thing is, when there's this gap of submissions where there's nothing to submit at the lower levels with psa, I believe you're going to see an overall increase in demand for existing slabs. Not that others aren't still coming back, but we're going to have this huge gap where there was nothing submitted for months of psa. So existing slabs out there, I think will probably, in general, you might see a slight increase in the aggregate market for PSA slabs. And it's not because I own massive amounts. Right now I'm waiting on a whole lot to come back, but I'm waiting with the rest of you on a lot of stuff that's been submitted over the last few months. So I'm excited that I'm in an industry where the leading service provider for graded sports cards, which I'm a passionate collector of, that there is so much demand for their service that they've had to do that, had to do this. And I know they don't want it, I don't want it. But it's a lot better than the opposite when there is no demand for graded cards. So we will see what happens. But want to be clear whether you're joining us, whether you're just listening, whether you're joining us on the Got Baseball Cards channel, that my company is committed to serving this industry during this challenging time in any way, shape or form to help you. So I would love to hear in your comments, if you're watching on the YouTube channel, your ideas, your suggestions. I love learning from you as well. What ideas do you have? What strategies do you have? What are you going to be buying up? You know, are you going to sit on the sidelines and wait this out for a few months or are you switching to another company? I love to hear input. I listen to it from clients in the store and our regular submitters, but I love to hear it from each of you who don't submit with us. That's okay. I love to hear other strategies and I'll be talking to other peers in the industry about what they're going to be doing. But I look forward to see how this plays out. It's always interesting. Even though I'm right in the thick of it. I love just observing as well as to what's going on in the industry and how this is going to play out in the future. Each of these other three companies I've mentioned are all good, solid, respected, reputable companies. Each of them is going to get a lot more volume over the next few months. We will see. Can they keep their doors open or will I be coming on and sharing another shutdown, another suspension of services? I really hope not. But only time will tell what happens. So that's all I got for today. Remember, next episode we're going to call it Joe's Big Announcement because it will be a big one and I look forward to sharing with you. But thanks for joining us today. Hope everyone is having a fantastic week. Remember, most importantly today, my Lord and Savior, Jesus Christ loves you, wants a relationship with you. Remember that. I appreciate each and every one of you. I think you are awesome them and I cannot wait to get back with you next time. Thanks so much everyone.