Smart or Stupid? Why Dealers Grade Base Cards

Chris Sewall, Baseball Card Collector Investor Dealer did a great video on Saturday about the terrible value proposition of grading ultra-modern base cards:

While I agree with Chris and his analysis and assessment, I had some thoughts about why people do this and how it might kind of make sense.

The race to list a Gem Mint 10 on eBay is a big part of some business strategies. Here’s the PSA 10 chart for Elly De La Cruz’s base Topps Chrome rookie card, which one was that Chris highlighted in his video:

Note that while it has settled in at a $35-50 slab, it started out at $127, and was more than $60 for the first month.

In this scenario, you’re opening product and end up with a bunch of base cards for desirable rookies.

If you’re using a group submitter and are only paying $15 per card, you can submit 4, and if only 1 of them gems, you’ve broken even. And that’s assuming you don’t sell the others at all. Selling them at cost ($15) gives you even more profit.

Here’s an imaginary but realistic example of a portion of a submission made immediately after product release:

I’m assuming a roughly 50% gem rate. Elly’s card is at about 31%, but I’m assuming that a lot of people graded it just for the sake of grading it. Someone who grades frequently is going to be more discerning, and the overall 2024 Topps Chrome gem rate is about 56%.

I’m also assuming the early PSA 9 sales prices of $30 for each Elly, instead of the current value of $10 each.

Getting your cards graded and returned quickly results in tripling your money. Even if you’re paying $20 per card, there’s significant profit.

Of course, there are fees and insurance involved, but you’re still turning a large profit.

And you’re at the mercy of your group submitter, in terms of sending out an order and getting your cards back quickly. Or you submit yourself at $20 per card and have PSA sell them on eBay for you as soon as they’re graded.

Now look at the same return for a submission done today:

There’s still profit to be made, but the fees and insurance definitely eat into it and may make it a fool’s errand. And then consider how long it might take you to sell them at this point, as the market is saturated. Making that profit is a lot more work now.

Not to mention the responsibility to not flood the market with junk slabs, but most don’t consider that.

The best play for a collector, as Chris says, is to wait for the card to settle in and buy it already graded.

We also need to understand that grading ultra-modern cards is yet another form of gambling in the hobby. The “gem rush” is real.

Have some thoughts? Share them!

On My Birthday

Sunday was my 46th birthday. I snowblowed about a foot of snow, took a short nap, and had this amazing cake from my wife:

Considering a big birthday present for myself, but I need to file my taxes first and make sure I’m not spending money I need for a tax bill. I also need to book my trip for the National.

Speaking of Birthdays

I missed the first birthday of this newsletter, which happened on January 24th. I don’t like going back and watching or reading my old stuff, but you can read that first one here.

Whether you’ve been here for 1 or all 82, thank you for being here!

In Defense of the NBA

I hear a lot of complaints about the modern NBA, mostly from people who don’t watch it and are just repeating things they’ve heard from old-heads.

Here’s a great video that destroys those arguments, using facts and video:

Still not a LeBron fan, though.

🗣️ YouTube Comment Of The Week

From my Saturday video about a news story that probably shouldn’t have been a news story (more on that video in the weekly roundup):

Good comment.

🎬 Upcoming Videos

• Attic Find Friday?

• #44-40 of my ACE 100 list

• A subscriber’s killer music card collection — I keep putting this one off because it’s big and intimidating

• Amazing ticket collection

• Subscriber collection rooms

📩 Upcoming Newsletters

• The greatest bobblehead collection I’ve ever seen

• Missing Caitlin Clark card in Panini checklist?

• 22-year TTM wait

In case you missed it, last week I wrote about Mose Schrute pulling a numbered Tom Brady rookie card on Joe Posnanski’s new YouTube channel.

🎬 Channel Highlights From the Past Week

I mentioned my Saturday video above. It was a video that got more hate than any video I’ve done in a long time. In retrospect, I didn’t do a good job of getting my point across. I should have focused less on criticizing the news channel and auctioneer, and more time on … I dunno, not being cranky. It’s not who I want to be as a content creator.

Another low-production week, with only 3 videos. Interestingly, 3 of my top 4 videos in terms of views in February are actually from 2024.

🎁 My Pickup Of The Week

Oh, mama:

When I receive it in the mail, I’ll talk about price and why I bought it.

👻 Brief Horror Movie Review of the Week

No movie this week, but I did watch the first 4 episodes of the Scream tv series. It’s pretty good, but not worth writing much about yet. I’ll finish season 1 and then decide if I’m going to watch subsequent seasons.

As usual, it’s a bunch of high school kids being played by actors in their mid-20s.

Health Update

Actually, let’s not do this during my birthday week. I’ll bring this back in a couple weeks.

🔗 Links:

Mandan Middle School starts card club

An Impossible Card Resurfaces 35 Years Later

Tom Brady won't be in Hall of Fame until 2028 — but he's already using inscription

On this date in sports history: Pete Maravich scored 66 points in a 101-94 loss to Tulane, on February 10th, 1969.