You can now send cards directly from eBay for grading. Should you?
eBay and PSA just announced the next step forward in the increasingly tight integration they have between each other, but I think it's one you should be cautious about using.
eBay announced a new feature, now available, to send raw cards that you purchase on eBay directly to PSA for grading. Any raw, non-autographed card purchased for $250 or above, and with at least two images in the listing, is eligible to be sent in. For now, those cards are being sent in at the Value Plus level, which is $39.99 per card, with a max insured value of $500 and a 20-business day turnaround.
The integration makes a world of sense for both PSA and eBay, who are striking up an increasingly tight connection together. Cards bought at that price range are often (not always, but often) cards bought with the hope of grading, so in theory it’s a nice little value add for eBay’s users. For PSA, the benefits are obvious: it opens PSA grading up to the massive amount of eBay buyers who don’t even need to sign up for an account to be able to use the service. Making it easier to grade means more cards being graded, which means more money for PSA.
I do think it’s in everyone’s best interest to be VERY cautious about using the feature, however, at least if your goal is to grade something to later sell. The feature doesn’t do anything to help you get better grades, or make better decisions about whether the card warrants grading. It exists to encourage you to grade more, regardless of result.
That’s where things get a bit problematic.
I don’t have any local shops around me, and haven’t had the opportunity to go to any shows since I got back into this. Everything is sourced online, and eBay is the primary place I purchase raw cards.
I’ve developed a pretty good eye for potential quality issues, and am very careful about checking quality of any online listings. More often than not I’m losing money on any cards I buy that I end up having to sell raw. So I’m pretty careful about what I buy and making sure that the quality looks up to snuff.
But that’s hard to do with online images. Unless you can get them to post a video (which does a much better job of letting you see condition), there’s a certain level of “welp, I’ve done what I can…let’s see how it turns out” involved in buying online.
I find about 70% of what I purchase from eBay turns out to be worth sending in to grade. That means that once I get the cards in my hand, 3 out of every 10 I purchase has a flaw or two that I think makes it unlikely to grade as well as I would need for it to be profitable. From what I hear from other people, that 70% success rate is a lot higher than the experience of many others.
On top of that, my personal gem rate over the past 12 months is ~75%. Again, from what I’ve heard from others, that’s pretty high.
That means that, all in all, for every 10 cards I purchase on eBay, on average, around 5 of them won’t gem.
I mentioned I tend to lose money more often than not on cards I have to turn around and re-sell raw, but it’s even worse for ultra-modern cards that don’t gem.
Looking at my whuppit data for ultra-modern cards, I lose:
27% on cards I can’t grade
36% on cards that get a 9
67% on cards that get an 8
89% on cards that grade a 7 or lower (thankfully a very small number of cards..only 1% of all cards I’ve sent in)
Right now, that’s very manageable. I have a high gem rate and the gems more than make up for everything else.
But if I wasn’t evaluating things in hand first and just sending them in from eBay? Well, suddenly those 3 non-gradeables are, at best, 9’s (in reality, they’re probably worse…I tend to take some gambles so if I say something is not gradeable, the most likely outcome is an 8 or lower). Suddenly I’m losing at least 36% on half of the cards I’m purchasing.
That…would not be good for business.
To be clear, there are some benefits to send things directly to PSA. It’s nice for folks not to have to have their own PSA account. I also imagine it speeds things up a bit—instead of having to wait for a card to get back to you before sending it out, it goes right from eBay’s Authentication program to PSA, cutting a few days out.
If you’re grading for PC purposes, I could see how this could be useful. Or if you’re a purely volume seller playing the odds and you’re not really doing any pregrading yourself, then the added speed might be a nice boost.
But for everyone else, the ease of use is almost certainly going to come at the cost of your margins and dramatically increases the risk of not just non-10’s, but an increase in sub-9 grades as well.
It’s worth remembering that the incentive for PSA here isn’t to help you get better grades or make more money, the incentive is for them to make more money by making it easier for more people to send in more cards.1
So I’m not necessarily saying don’t use eBay’s new feature, but I am saying it’s wise to proceed with a bit of caution.
Interestingly, part of me wonders if the influx of more graded cards might actually cause a bit of a boost to 10 values. Again, I would expect sending more cards in without evaluating them is more likely to boost the amount of non-gems in the market than it is to boost the number of gems. That means the gem rates will start to look worse as the stuff that currently would be weeded out gets sent in instead. I could see that causing a bit of a premium in 10 values, which would also be in PSA’s long-term interests.