What can we learn from GemRate's annual recap?

GemRate posted a recap of what was graded in 2023, and how those grades turned out. Let's dive in.

I love GemRate. The data they publish about what is getting graded by each major service is always super interesting to see, and their universal search is one of my first stops when considering whether or not to grade a particular card.

Yesterday, the posted a series of tweets as a “2023 Grading Year in Review”, and there’s some interesting stuff in there for sure.

Grading growth

Grading continues to be a major part of the hobby, and that’s not going to change anytime soon. Each of the four grading services GemRate reports on (PSA, CGC, SGC and Beckett) saw year over year growth, with SGC (up 29%) and PSA (up 21%) leading the way.

The fact that Beckett only increased 3% compared to the big growth for PSA and SGC is…not a great sign for them. Hopefully they can turn it around because they do have some good things going for them (I love that they provide sub grades for each of the four grading criteria).

Most of the growth comes from non-sport cards, which is probably not surprising if you’ve been watching the TCG stuff at all. In fact, SGC is the only service that saw growth in graded sports cards.

Down 24% and 56%, respectively, Beckett and CGC are basically dropping out of the race of contenders for sports grading (CGC saw a 58% increase in TCG & Non-sport so they’re carving out a solid space there).

It’s interesting to see SGC capturing more space. They’ve got a solid reputation, and decent slabs (a lot of collector’s like the slabs, but personally I feel like the label looks cheap…like someone designed it in Microsoft Word or something). The actual value of SGC cards still hasn’t caught up to PSA, but maybe that will come if they can continue to carve out more market space.

Overall, this leads to probably what you would expect. PSA dominates market share, with SGC a distant second.

Gem rates

It’s the second part of that image, the gem rate, that has sparked some interesting discussion that I’ve seen. At a glance, the fact that 43% of PSA cards gem (second only to Beckett, which has a reputation for easy grading) seems to suggest that PSA is more lenient with those gem grades.

I think there’s more to it than that though.

SGC tends to be really popular with vintage collector’s. It’s the first space they carved out in the market. If you look at the items graded by era, you can see this play out. PSA’s lowest graded era’s are basically anything from the 1970’s or earlier, whereas SGC does very well with those (the 1950’s and earlier are it’s second most common graded era, and the 1960’s are it’s third).

Obviously, we would expect the gem rate for those early era cards to be incredibly low, and that’s exactly what we see.

Already, that explains some of the gap in the number of PSA gems to SGC gems. With vintage cards being a larger percentage of what SGC grades, the overall gem rate would decrease.

Even by era, we can see PSA leading the way in the gem rate for each individual era. I think there may be an explanation for that as well.

Right now, the value of PSA cards is higher than the value of the same grade in any other grading provider. You just fetch more money with that PSA slab. That leads to a lot of people sending their best stuff into PSA.

I know a popular approach for people who grade particularly hot and timely cards, for example, is to pull out their best to send to PSA to get those high grades, and then send the rest in bulk to SGC because SGC has a much faster turnaround. This lets them get first to market with the SGC cards and get some profit, while waiting for the PSA’s to come back to give them their biggest bang for their grading buck. This would also explain some of that gap.

Beckett and CGC sports cards are worth even less than SGC, so if you want to maximize your money, you’re certainly not sending your best cards to either of them at the moment, so they’re lower gem rates make a ton of sense to me.

I mean, look, it’s entirely possible PSA is more lenient with their grades. But because each grading service grades independently, we have to be careful to not draw those types of conclusions based on data alone.

Conclusion

It’s really great to see this data from GemRate—they’re such a valuable resource for this community.

Clearly grading isn’t going anywhere, and while we’re seeing some SGC growth, PSA continues to be the dominant player both in terms of market share, and in terms of overall value of graded cards.