So, 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
The 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.
*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.
*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 #4, for 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?
*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.