Sneaky Moves: CGC Price Increases

by Peter Daddone

042321B-300x157 Sneaky Moves: CGC Price IncreasesSo, I’m enjoying my 3rd cup of coffee at around 2:00 (if you need to know why, scroll down to my bio!), and up pops the CGC fee increase announcement.  There are some clear winners and losers to this announcement, but sneaky moves will try to help you navigate into the winner’s column!

Sifting Through The Numbers

cgc-annoucement-3-e1619129246566-235x300 Sneaky Moves: CGC Price IncreasesThe CGC price increase is not a sneaky move.  Anyone with a pulse on the comic collecting and speculating trends of the past year knows all about record auction prices.  CGC knows about them too.  Their announcement reads in part, “…Comic books, trading cards, and other collectibles certified by CGC are setting record prices, and demand for our expert and impartial services is growing rapidly.”

What I love about CGC and what I think makes them superior, is their data analytics and market analysis.  As a result, the price increase can be absorbed within the record prices we are seeing on comics.

My worry is that economic specialists are misreading the economy and we enter a period of hyperinflation.  Inflation is bad for collectibles.  Disney+ raises their prices, CGC raises their prices, the price of gas increases.  It is a snowball effect.  Enough prices on goods and services rise, paychecks stay the same, the amount of money to spend on collectibles shrinks.

Fees have increased quite a bit.  The Modern tier is rising nearly 10%. The Value tier is rising 22%.  Adjustments to your collecting and speculating action plan will be necessary in order to be successful moving forward.  Your model will need to change.  Because of this announcement, there are real winners.

Three Winners

marvel-team-up-95-e1619130277239-215x300 Sneaky Moves: CGC Price Increases*eBay.  The mid-grade tier on a lot of comics just went to eBay ungraded.  Let’s use Marvel Team-Up #95 as an example.  Looking it over, you determine it might be an 8.0. At the old price point, you send it in.

GoCollect posts recent sales of an 8.0 at $50.  Now, suppose you are like me, and every time you think you have an 8, you really have a 7 or a 6.5.  Well, GoCollect posts a 7.0 at $20.  At the old price point,  you at least get your grading fee back.  At the new price point, you lose money.  So, your threshold on this comic goes up to an 8.5 or a 9.  So, anything else goes on eBay.

*High Volume Speculators.  They’ll be in a rush to send in comics over the next month and then things will slow down.  Speculators who pick up, for example,  entire Silver Age Batman runs are going to love the faster turnaround times because smaller investors and collectors will have to pass on getting some of their comics graded.

Bronze Age Comics.  The new price point affects the Value tier more than the Modern tier.  There is more value in a High-grade post-1975 comic book now than there is in a mid-to-higher-grade Silver Age comic.

Three Losers

nova-4-e1619130998620-197x300 Sneaky Moves: CGC Price Increases*Non-Keys.  What I love about CGC is the idea that you can take a great cover and put it in a really nice, professionally graded, display, and hang it on your wall to admire.  The new price point makes it harder to make that leap into sending it to CGC.

I think that is a point that CGC misses with the new price increases. The focus is on the record prices and not necessarily the “falling in love” factor.  Nova #4for example, is a cover I love.  Unless it is a 9.6 or a 9.8, it really doesn’t have enough resale value to sell.  So, if I love the cover, and I just want to get it graded and mount it, I don’t think I do it and instead, go some other route to showcase the comic.

*“The Little Guy.” The smaller, purchase some comics, get them cleaned and pressed, send them in, re-sell them, try to beat the Stockmarket index speculator is going to have a tougher time making a profit at this price point. If you clear 30% a year on your re-sales, you just lost say 12% of the profit with this price increase and that doesn’t include any potential future increases in things like postage and supplies.

*Auction Houses of Estate Auctions.  The kinds of auctions where you can pick up 30 or 40 comics in a lot from an estate auction are going to see reduced ending prices on their auctions.  See below.

How Can You Be “Sneaky” And Win?

cgc-announcement-2-e1619131579961-279x300 Sneaky Moves: CGC Price Increases*Cut Costs.  An easy way to move into the “winners” column is to cut your costs by 10-15%.  There are several ways to do this.  First, reduce shipping.  Send three or four submissions to CGC in one mailing instead of one or two.  If you plan to sell what you are sending out to be graded, have them sent directly to auction houses instead of to your home; further reducing shipping costs. Second, reduce your planned price points on comic purchases.  If your hard stop on a bid for a comic is $5.00.  Cut it to $4.00.  Third, be patient.  You are not going to win at that $4.00 price point…at first!

*Adjust Your Scrutiny.  Every time, I fall for this. I think I have an 8 and it comes back a 7.  I fall in love with a comic and I convince myself it is at a higher grade than it is.  Really study the grading scale, use a 30X magnifying lens, and be true to the grading scale and not your heart.

*Create/Adjust Your Action Plan. If you have not already developed a plan or model for your purchasing, collecting, and selling, consider doing it now.  This will help you make a significant purchase with more prudence.  With this type of price increase, prudence needs to enter your vocabulary.

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8 comments

Mark April 23, 2021 - 1:50 pm

“…….be true to the grading scale and not your heart.” Great point, and it is exactly my problem. I need to get better at this, so am working on it. Nice article.

Reply
Peter Daddone April 30, 2021 - 1:28 pm

Thanks for reading! Take care!
Peter

Reply
algads April 23, 2021 - 1:55 pm

Please back up your statement that “inflation is bad for collectibles.” In fact, many believe the complete opposite to be true and many financial advisors will recommend using collectibles as a hedge against inflation.

As for the CGC increases, they are not so bad, especially in light with increases like PSA (from $5 per card when they were having specials for members to $20 per card). I had been contemplating moving from the middle tier to the upper and now that the upper is the only one with a discount, I have no choice.

Of course, I still have about 50 books that have been sitting with CGC for 5 months now so if this results in getting back into the 2-3 month wait range, I will be ok with the extra cost. Not sure that is the same for the occasional slabber.

Reply
Peter Daddone April 30, 2021 - 1:28 pm

Great point at the end there. I think the increase will effect the occasional slabber. Just to clarify, I am referring of hyper-inflation being bad for collectibles. What I mean is, if prices increase so much, so quickly, that it noticeably impacts a static paycheck where a salary has not increased, people have less money to spend on investments and luxuries. You get $1,000 a week, spend $500 on living needs, you have $500 to spend on investments or luxuries. If the paycheck stays the same, but the living needs costs suddenly jump to $750, then that will impact not only the amount of money to spend on extras, but the mindset. Alarm bells start going off in your brain about the need to save money…fast! Thanks for reading and take care!

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Aaron April 23, 2021 - 6:17 pm

Foreign submitters are also punished heavily as shipping costs, which were already far too high are even higher and no insurance. When the dust settles from the pandemic the market that exists now will stall and the businesses that are hiking prices will be left in the cold.

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Peter Daddone May 5, 2021 - 10:14 am

Great point Aaron! Hopefully, collectibles will still be on the move!

Reply
Baltimore Lauren April 26, 2021 - 11:46 am

What’s even sneakier is the dealers discount went frkm 20% to 15%. CBCS might benefit from this.

Reply
Peter Daddone May 5, 2021 - 10:13 am

CBCS should definitely benefit. They are certainly taking advantage of the CGC price increase. They just sent out emails to former customers offering a 5% discount on grading fees!

Reply

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