In lockstep with the rise of the collectibles industry, card grading services are having a moment. According to data on GemRate.com, average monthly grading submissions to the big four (PSA, CGC, SGC, and Beckett) have climbed from ~700,000 in 2021 to ~900,000 in 2022 to 1.1m in 2023 and are on pace to crack 1.3m this year—a nearly 200% increase in three years.
In this week’s newsletter, we’ll look at what’s driving the increase in submissions, and give you tips on when you should grade your cards.
So where are all these submissions coming from?
As interest in the hobby grows, so does that amount of attention from people seeking fame and fortune (mostly fortune), and grading an already-valuable or sought-after card can be a great way to double (or in some cases, triple) its value. Nowhere is this more apparent than with perennial hype chases Victor Wembanyama (responsible for 170,909 submissions since being drafted in 2023) and C.J. Stroud (127,313 submissions in the past year as well). On the surface, for long-term value, these players make sense—both Wemby and Stroud won Rookie of the Year in their respective leagues, and both showed flashes of being generational talents and future HOF inductions are on the horizon. But with tens of thousands of graded base cards in circulation, it’s highly unlikely that you’ll get the same return, as, say, a 1986 Fleer Michael Jordan rookie card, with only 330 gem mints in existence.
So what’s contributing to the other 13 million and change of cards getting graded annually? As more people flock to the sports card ‘gold rush’, everyone is looking to maximize the return on their investment as quickly and/or easily as possible—very few people have the patience to wait 20 years for today’s chase to put up legendary career numbers and retire, so grading is generally viewed as a shortcut to juicing the value of the card in the short term. Which is all good in theory, but in practice:
Your card will probably not grade as highly as you think it will. Of the 234k 2023 basketball cards that have been submitted for PSA grading, 61% have gemmed, earning a perfect score of 10. That means, unless you know what you’re doing, you have a 4 in 10 chance of scoring below a perfect score—sometimes substantially. An ungraded (or ‘raw’) card with no obvious flaws sells for roughly the same as a graded PSA 8—meaning that if your card is graded an 8 or below, you’ve taken a loss due to the cost of grading and shipping.
You don’t need to grade that card because it is already valuable. Generally speaking, anything numbered /10 or less doesn’t really need to be graded because it is already rare enough, and buyers are unlikely to pay a premium just because an already rare care is graded. Save yourself the hassle if you hit a superfractor and just sell or store it in a one-touch.
That card will not hold value as well as you think it will. A rookie patch auto? Maybe. A high-numbered vet parallel? Unlikely. Is there already a booming market for the card you’re trying to sell, and is the market telling you ‘yes we pay a lot more money for gem mint cards’? Not sure? Check 130point. But the sheer amount of veteran cards for merely decent players I see slabbed at card shows and available on eBay tells me people aren’t doing their research before grading—do we really think that 14 million cards that hit the market this year are expected to sell above the grading price + card value, just because you had it graded? (I will admit I did buy a slabbed pink Mosaic DK Metcalf /25 because it caught my eye and I have incredibly poor impulse control).
Okay—so when SHOULD you slab your cards? There are a few scenarios where it automatically makes sense:
The card is already vintage and in good enough shape that you think it will grade out better than other copies of that card and there is still a market for that player. Think: your Mario Lemieux rookies, your Scottie Pippen rookies, (Gretzky and Jordan were too obvious) cards that you stumble upon in a yard sale where it’s clear the owner doesn’t understand the treasure trove they’re sitting on. In this case, it’s an automatic grade.
The card is of a player who is hot right now and will still be selling well in 2-3 months. Your Wembys, your Strouds, your Paul Skenes (probably)—if you’re looking to flip the card immediately and you can trust that there will still be buyers willing to pay the graded card premium in three months (the amount of time it takes for a card to be graded + shipping time on PSA’s cheapest offering), then grading a card can be a quick lift to the asking price—but beware, you’re not only racing the length of time the player is relevant, you’re also racing the card producers that are churning out sets and flooding the market with new cards of those players, and the other sellers who are grading their cards and bringing them to market.
You’re planning on a long-term hold of players who will have a long-term market. Again, this could be Wembys and Strouds, but think of all the top tier players from 20 years ago and where the buyer’s market is now. A base Topps Allen Iverson PSA 10 rookie card sells for somewhere in the $70 range. Will the players you’re buying be this generation’s MJ and Tom Brady, or AI and Drew Brees?
You just want to. Want some consistency in your PC display? You like the aesthetic of slabs? You want to give your cards an extra level of protection one-touches or toploaders can’t offer? More power to you. This isn’t an argument against slabbing when it’s a personal preference, it’s prompting people to do a little legwork before blindly contributing to PSA’s CEO buying another yacht.
Thanks for joining us for another edition of Breaks and Takes. If you like what we’re doing, share this post with someone who’d appreciate it (or who you secretly want to tell ‘stop grading everything’).