Some thoughts on PSA's pricing changes
PSA is changing some of their prices for grading. Here's what changes it what it means.
PSA is changing the prices of some grading service levels, effective tomorrow (January 17). I wanted to jot down a few thoughts on what the changes are and what, if any, impact there is on folks looking to do the whole raw to grade thing.
So first up, here’s what’s changing (I’m not going to talk about the ticket grading changes because I don’t do anything with that and know nothing about it).
TCG Bulk (a collector’s club benefit) is increasing by $2 a card, from $14.99 to $16.99.
Value Bulk (a collector’s club benefit) is increasing by $1 a card, from $18.99 to $19.99 a card.
Express is increasing by $20 a card, from $129 to $149.
Super Express is increasing by $50 a card, from $249 to $299.
Walk-Through is increasing by $100 a card, from $499 to $599.
What this means for the value of Collector’s Club?
Two of the changes involve the two cheapest grading levels, exclusive to the paid Collector’s Club. While this does mean that, excluding monthly specials, the benefit of having a membership is reduced since the gap between Value and Value Bulk is a little tighter, the impact is fairly minimal.
A Collector’s Club membership costs for $149 a year. Before, at the $18.99 price, you were saving $6 a card by having a membership and sending in Value Bulk. That meant that purely on grading fees (and again, ignoring specials) if you graded just 25 cards all year, the membership paid for itself (25 * $6 difference = $150).
Now you save $5 a card, putting your break even point at 30 cards (30 * $5 difference = $150). That’s still not that bad, and if you grade enough to be considering a membership, you’re likely going to hit that number very easily.
It’s not too bad for TCG graders either. Before you saved $10 per card by having a membership, meaning you only needed to grade 15 cards to break even. Now you’re saving 8, so your break even point jumps to 19 cards. Again, that’s a pretty small number.
So value wise, I don’t think this changes too much. We get a little less value, but not enough to completely change the game. Basically, if you grade any significant amount of cards, the Collector’s Club continues to be a really great value and a no-brainer.
Predicting the impact on grading submissions
Overall, I don’t expect PSA will see too significant of a reduction in submissions for the price changes. If any dip, it will be minor. Grading continues to increase YoY and I don’t think these price changes do anything to stop that.
Putting on my product manager hat for a moment, I do think there may be some changes at each level though that PSA is probably expecting.
Value Bulk/TCG
I’d expect a very minor reduction here. Like, marginal. The price change just isn’t significant enough to make a dramatic change.
Value, Value Plus and Regular
I’d expect no difference here. The prices didn’t change, and if you weren’t paying up for Value Plus before, a $1 increase at the Value Bulk level isn’t going to make you pay up now.
Express Level & Super Express Level
I actually think submissions at Express level may go up slightly, despite the price increase. The reason for that is that folks who previously may have paid for a Super Express submission to cut their turnaround time from 10 to 5 days, may balk at the more significant increase in price at the Super Express Level and decide they’re happy to wait a few more days for a cheaper submission.
The optics
I’m sure there’s going to be some upset folks. There are anytime prices increase, particularly when there’s no real clear benefit to users associated with that increase.
The optics are even a little worse than usual because this is fresh off of PSA announcing that they are dramatically backlogged. At a point where people are already really frustrated with the service, adding a price change is not great timing.
Now, I suspect that maybe there could be a marginal benefit to users. Maybe a few folks get disgruntled enough by some of the pricing changes that they send in a few less orders. I don’t know. As we just went through, I’m not sure the price changes (at least at the lower levels) are significant enough to cause a major reduction in orders.
More likely, it just increases PSA’s profit margins a little bit more so that they can afford to hire more and start speeding up their turnaround times again. (Does anyone know what their margins are? It feels like it has to be significant already.)
Maybe. That’s all speculation. Again, the optics of “raising the price at a time where service quality is already down, without adding any benefit to the users” is not a great look for sure.
A missed opportunity
Anytime you make a change in pricing, I think you need to recognize that people will immediately want to know what’s in it for them. Pricing changes without some indication of benefit rarely go well.
I think this was a missed opportunity by PSA to provide something that users would actually be excited about. Here’s a few ideas that come to mind.
Grader notes at lower grading levels
One would be to introduce grader notes at more levels (currently it’s only Express or above). Grader notes may be the single most requested PSA feature (well, that or faster turnaround times) and would help a ton with the perception that PSA’s grading standards vary from grader to grader (as much as they may try to stick with consistent standards, it is absolutely subjective).
PSA has said they want to be careful because grader notes adds time, but I don’t really buy that. I’ve been tracking my own pre-grade notes in whuppit since I started grading. It takes me maybe 2 seconds to type out a quick note about why I think a card is going to get the grade I’m predicting. The time impact is very minimal, so I don’t buy this excuse at all.
Introduce a new level between Value Plus and Regular
Right now, the Value Plus level is $39.99 and has a value limit of $500 a card. The next level up is the Regular limit, which is $74.99 a card and has a value limit of $1,500.
That puts people who want to grade cards whose values fall just above that $500 value in a tough spot where they’re paying nearly double the grading fees.
Now there’s already a little bit of of wiggle room here. You can choose to send at the Value Plus level and then wait to see if they up-charge, which (at least in my experience) they often don’t. But I’m sure PSA would love to encourage folks to pay up a little bit rather than have all that extra cash slip through the cracks. To me, a $50 level right in between those two would make a world of sense for everyone involved.
Make the “Turbo" special a regular level for Collector’s Club Members
One special that is going on this month (and very similar specials have happened before) is the “Turbo Special”. For cards valued at $500 or less, you pay $24.99 a card (the same price as the standard $24.99 Value level available to non-members), but you get a 20 day turnaround.
Turnaround times are wildly important, and also one of the biggest complaints people have with PSA. Timing is very important, and having inconsistent turnaround times can really mess with people’s business. I know me and quite a few other folks are all taking advantage of the Turbo special because cutting our turnaround time in half is well worth paying a few extra bucks for.
We could use the Value Plus level (20 day turnaround, $500 max value), but at $40 a card, the price jump is way too significant—the difference between that and the new $19.99 pricing is about 4% less margin for a $500 card, 8% less margin for a $250 card and 20% less margin for a $100 card.
Turbo Special makes that gap a lot less painful, and also makes folks a lot more comfortable sending in cards knowing they’ll get them back in time for key events and, in the case of ultra-modern stuff, back before the market on that card has a chance to completely change.
Introducing a “Turbo” level for Collector’s Club members would not only provide a bit more value for members to counter the optics of increased pricing, but it would likely provide a lot more revenue for PSA as I suspect more members would be happily willing to pay up a little for the faster turnaround for a lot of their submissions.
Summing it up
All in all, while I’ve seen some angry reactions, the changes aren’t that big of a deal. I think you need to do a little math on some of the higher levels, and it does reduce margins a little on lower-end slabs, but mostly the price changes are minimal.
I think the biggest thing here is that there was just a missed opportunity for PSA to pair this with a change that would have benefit both users and the company at the same time, buying some goodwill.
I mean look—we all know PSA is not really at risk at the moment. Grading continues to grow, PSA continues to dominate, BGS is looking like they’re on the ropes, and no other slab carries the same value premium.
But competition sneaks in through the margins, and PSA is absolutely leaving some cracks—lack of grading transparency, gaps in submission values, slow turnaround times, etc—that give the competition a way to get their foot in the door. If I were them, I would be looking for opportunities to close those gaps while improving company perception and value at the same time.