Unsolicited advice to grading companies wanting to compete with PSA
The big news today is that PSA is set to acquire SGC, the second largest sports card grading company. This got me thinking about what it would take for someone to dethrone PSA.
The big news in the hobby, at least for folks who grade, is that PSA is all set to acquire SGC. SGC is the third-largest trading card grading company (behind PSA and CGC) and the second largest sports card grading company (CGC sees the bulk of it’s submissions come non-sports cards).
I’m not gonna talk much about that—there’s plenty out there. But I have been thinking for awhile about what it would take for a company to compete with, and potentially even dethrone PSA someday.
So here’s my unsolicited advice to grading companies who want to compete: target the weaknesses. (And if you work at PSA and are reading this, my advice is to focus on shoring these up.)
Specifically:
There’s a definite perception that PSA grades can be subjective depending on the grader and their mood on any given day. A great way to compete right out of the gate is to target this with transparency around how the grade was arrived at.
PSA slabs aren’t bad, but I feel like grading companies have really overlooked the importance of creating a truly stunning grading label and slab. A big part of grading is because you want to add value to your cards, and I feel like there’s definitely room for someone to come in with a jaw-dropping slab and label combo.
Turnaround times have been a constant pain point for PSA. I’ve mentioned it before, but I know a ton of people who have sent stuff to SGC solely because the turnaround time is faster and they want to get to market first. PSA has been doing much better on this front, but there’s still room for the competition to sneak in here.
Don’t compete on price. I hate myself for saying this because I love it when PSA provides grading specials and would love grading to cost less. But the main reason most people grade is to add value to the card. Even those that grade for PC purposes are doing it because they value the card they have and want it taken care of and put in a nice slab. Any company that wants to compete has to be able to retain that value, and eventually get to a point where their slabs have similar resell value as PSA currently has. Positioning yourself as the cheap alternative to PSA is a sure-fire way for that not to happen while also cutting into your margins.
Right now, I don’t think most companies have really emphasized the price difference while neglecting focus on some of the other areas for improvement.
SGC, too, is (was?) cheaper than PSA and their turnaround times were much faster than PSA. The slabs were definitely a step up from what CGC provides and depending on who you ask, might even be a step above PSA, though I don’t feel like they were dramatically more premium looking in any way. But again, there’s no real transparency around grading here so there’s nothing to appease folks critical of a potentially subjective grading process.
CGC is cheaper, but the turnaround time is roughly the same as PSA for their Bulk submission level. Their slab labels are a bit underwhelming—they could certainly stand for a more premium looking face lift. And there isn’t anything they’re doing around transparency to poke at that weakness either. My advice to CGC would be to give their slabs and label a makeover, add some transparency to their grading process and reduce their turnaround times.
BGS’s biggest advantage is their sub grades which provide at least a little more context to the grade, but they pull their punches a bit by charging extra for it instead of just including it on every order.. I know it’s subjective, but I would personally rank their slabs ahead of CGC, but behind both SGC and PSA. Their pricing is a little cheaper than PSA if you are not a PSA member, but their turnaround times are actually slower. My advice to BGS would be to include sub grades on all slabs, give the slab and label a face-lift, and greatly decrease their turnaround times.
TAG is actually kind of interesting and if I had to bet on one company to eventually be a legitimate competitor, it would be them. They are much smaller, but they also seem to be targeting a lot of these areas. Their advertised turnaround time is a little faster than PSA, which is nice. Their slab is pretty slick, and they are clearly trying to position it as a premium slab (all of the auto-generated images have this sleek black background and Apple-esque reflection effect). That focus on a premium feel is also very obvious in their slab packaging. Their grading report is probably the biggest differentiator. They detail to an exhaustive detail why the card got the grade it did which makes it pretty hard to argue with.
My biggest advice to TAG is to keep hammering on the marketing and positioning. They need to get to a point where their slabs have similar resell value to PSA, and that’s going to take time and a focus on building up that reputation.
For PSA, well, the advice is to focus on shoring up those weaknesses so it’s harder for competitors to gain an edge. The improvements around turnaround times as of late has been very nice, but it will take time for that reputation to change. There’s definitely some room for improvement around the slab and label to cultivate a more premium feel. The biggest issue, I think is the grading transparency. They don’t necessarily need to go as detailed as a TAG report (I actually think it’s overkill for most collectors), but some level of sub grading to indicate which of the areas is the one that kept the card from gemming would be a big step in the right direction.