New Grading Company Business Plan

[joe_collector]

Here are my ideas that would create the perfect grading company:

 

1) Undercut CGC's pricing.

 

'nuff said.

 

2) Release firm grading standards.

 

I'd love to know that nothing above an X grade could have foxing, or that X and above cannot have date stamps/writing, or what sort of defects are allowable at certain grades. Right now, the big dealers have the advantage and it's mostly a closed party.

 

3) More label info.

 

The sportscard companies have done this, by offering a numerical Grade, but also breaking out the Edge, Centering, Corner, etc. X/10 ratings to give a real idea on where the flaws exists.

 

My recommendations: Corner, Edge, Spine and Centering.

 

Let's say you're a "Corner Man", you could tailor your bidding towards 9.X comics with high Corner ratings, and Spine Addicts could do the same. Information is power and I want more of it.

 

4) Disclosure of man-made markings (or woman-made (g)).

 

Date stamps, writing, scribbling, pencilled numbers, etc. would be on the label, no questions, no dealer griping, no bending over to Heritage and Co. Just do it and collectors will make it worth your while.

 

5) Spiffier labels.

 

Go see the Beckett cards for an example. Metallic Gold labels for the true high-grade beauties would really jack up the eye appeal. Don't try and copy CGC, surpass them by a country mile.

 

6) Create a logical price list.

 

Follow the successful card companies and just list set prices. No FMV, no bizarro valuations for a 9.9, just charge $X for books with $Y NM value (no matter the grade) and use fewer tiers.

 

That way submitters just nab the latest Overstreet (or Update or Wizard, or whatever - card graders allow 3-4 different Guides as valuation meters) and let the customer concentrate on submitting the books rather than working towards a MBA.

 

Any other ideas?

 

[Shield]

How about this?

 

For restored books, release full disclosure.

 

Example: Action #1, restored VG-.

 

Restoration includes: Piece re-attached to lower left front cover, color touch on "A" of Action, interior folios re-attached with archival tape, top staple replaced, pressed, etc.

 

Now, this is way too detailed for the label, right? But, this is 2003. No reason a potential buyer shouldn't be able to login to their website and retreive said full information. Also, wouldn't you pay a small fee to have access to that information ($20 lifetime) if you were a collector of high dollar restored books?

 

Just my .02...

[joe_collector]

On that note, I also think restored books should come with two grade, the Apparent Grade with restoration, and the Estimated True Grade of the book pre-restoration.

 

This can be done, and was actually the method that top-level (ie. honest) dealers used before CGC. They'd take a VG and restore it to VF and call it such.

 

Yeah, and this "only for members" Boys Club for looking up CGC numbers has to go, and it should be opened up to the general public via a small registration fee.

[COI]

All these things would be great, particularly this, which is what CGC should have been doing from the start:

 

I'd love to know that nothing above an X grade could have foxing, or that X and above cannot have date stamps/writing, or what sort of defects are allowable at certain grades. Right now, the big dealers have the advantage and it's mostly a closed party.

 

And this:

 

The sportscard companies have done this, by offering a numerical Grade, but also breaking out the Edge, Centering, Corner, etc. X/10 ratings to give a real idea on where the flaws exists.

 

But these are ideals which may not come to pass, even if real competition comes up. I can't see them offering in depth info on the label, while still being able to maintain a quick turn around and keep prices down. If CGC is barely in the green as it is(I was told it was losing money for the first year) I don't really see how a late comer to the market will be able to heep profits high, offer more in-depth service, and keep costs down all at the same time.

 

I think the best chance a company may have is to come in focusing on Moderns only, and not dealing with gold and silver which is infinitely more complicated to grade. As it is, I think CGC will corner the market on grading Gold and Siver, mostly due to the existing confidence in the existing restoration check etc...

 

But if a company came in for grading moderns only, and managed to keep costs down and turnaround high, I think they could do well. I know I for one would be sending in Modern books by the truckload, with better turnarounds and lower prices.

 

[joe_collector]

>>But if a company came in for grading moderns only, and managed to keep costs down and turnaround high, I think they could do well. I know I for one would be sending in Modern books by the truckload, with better turnarounds and lower prices.

 

That's what I'm thinking as well, and I think with CGC's current $19 Modern grading fee, someone could come in and under-cut that and become the Collector's Choice for Modern comics.

 

That is what happens in sportscard to some degree, with some companies having power in various eras.

 

As for the "extra detail", I don't see it being such a big deal, assuming the grading software is setup like this from the beginning. It's also important to remember than in order to take it to CGC, a competitor must "offer more" than current solutions.

 

Personally, I'd be ecstatic to have Corners, Centering, Edges and Spine numerical grades on a competitor's label, and be able to pick the best copy based on your own requirements.

 

And a BIG P.S.

 

Much has been made of CGC losing money out of the gate, but I don't know of any business that makes money immediately. Most large firms have 10-20 YEAR pay-off plans, where they become profitable for current costs, but initial capital expenses, investments, etc. are paid off long-term.

 

Do the math, and you'll see that CGC's revenues are huge for such a small company with a miniscule number of employees. So basically, I think they're cooking the books and taking a hit on capital expenses, relocation and probably taking on some Heritage and Greg Manning debt load.

 

I guarantee that CGC is profitable in the true sense, as in more receivables in than operating expenses out.

[Mister_Comics]

When I talked to one of thier graders I got the impression they were going to do a lot of the stuff people were asking for all along. It may be the only way for them to survive in the business. I wouldn't doubt they monitor this forum for ideas.

[COI]

I wouldn't doubt they monitor this forum for ideas.

 

Personally, I'm thinking the sole reason this forum was started was for that purpose, which is a good thing and smart as well. Now if they'd only act on it!

 

[dam60]

A couple of thoughts:

 

Ease of Competitors

For new competition I am sure there would be extremely low cost of entry. Thinking of CGC and their position as the first grading company they faced abnormal costs regarding:

 

1 - Advertizing (convincing collectors to use their service and gain mainstream acceptance. Great example - look at the latest CBG - full page add with a "NM" raw Hulk 181 and the 9.8). Now grading is much more accepted

 

2 - Extensive capital for research and development of the proprietary CGC cases. The NewCo could just create a solid dupe while avoiding infringing on copyrights.

 

CGC Pricing is Not Aligned with Future Revenue Increases

If CGC was designed to be a service primarily for the GA and mid-high grade SA and the ultra HG Bronze / Modern, how did they really expect to be solvent in even 5 years time? The supply of books is finite and the real growth in their business would have to be based on people getting modern books slabbed. However, for $19 grading fees plus shipping both ways it's absolutely ridiculous to slab all but the most pristine and the most valuable of modern books. A lower price would be beneficial for growth.

 

Lack of Dislcosure Will Hurt You

There really is no reason why a comic cannot be graded with notes detailing the faults that are made public via the internet or even the label. This could include everything from a field for spine, corners, centering, etc. For restoration, a grade for the book raw and then the apparent grade would also narrow some of the gaps for the prices paid for restored books vs the unrestored coutnerparts.

 

Signature Series Doesn't Work

CGC's signature series is a good idea, but is way too inclusive. Something like including a DF COA and leavinga blue label would go a long way . . .

 

Lack of Focus

AK - I like your point about a co that did just moderns quickly AND costly. By grading all types of books, CGC is vulnerable to a niche player.

 

Anyway, these are a few things off the top of my head.

 

DAM

 

 

[comicwiz]

1) Undercut CGC's pricing.

 

Although this is ideally the best way to gain short-term market penetration, eventually operating costs will make it difficult for a NEW grading company to sustain its product/service at a low cost. Attainment is one thing, but after a year has passed, and debt servicing becomes a far greater problem, maintaining lower prices may be an insurmountable hurdle for any new grading company.

 

2) Release firm grading standards.

 

Never going to happen. Next.

 

3) More label info.

 

I believe that the most difficult decision CGC had to make in the last year was to exclude comments from their labels. Realzing that they now had to take a product that had gained universal acceptance, and change something about it, they must have grimaced at the thought of all the controversy it would raise. Luckily, it didn't create nearly the stink I had imagined (or maybe it still is a topic of great debate). It is my belief that the research component to grading comics became far too labourious, time intensive, and eventually got branded a high-cost activity. Its far easier to grade a card; back and front, and then spend the rest of the time playing tetris until the printer outputs the label. Comics raise a far greater complexity between grading, reporting key information, and then commenting on critical flaws or defects. I'm not saying that I like the fact that comments have been ridded from their offering (I sure would like to know that staples have moderate rusting), but the reality is that information capture and generation require time. The data entry component is also something to consider, but I'll touch on that later in my suggestions.

 

4) Disclosure of man-made markings (or woman-made (g)).

 

Sure, I can go for that; but generally date stamps and man-made markings on front/rear covers are observable; and CGC already notes any man-made markings in the interior, so this wouldn't be a make-it-or-break-it component of a new grading company's overall strategy for competition.

 

5) Spiffier labels.

 

There is definitely room for authentication and tamper evident hologram improvements for the current CGC product. In a past thread, I had commented on how a slab dropped just a few inches, and the inner-well had nearly popped right out of the holder. When I looked closely, the hologram didn't look at all effected. I was expecting the hologram would be ripped, torn, or blemished to reveal a broken seal... but no dice.

 

6) Create a logical price list.

 

That's always a plus for any company providing a product or service.

 

Further suggestions: if research is considered a high-cost activity (ie. a grader is engaged in high-payoff activity when he's graded 100 books in 4 hours; a grader is not involved in high-payoff activity if it takes him/her 2 hours to do research on 10 obscure/rare/htf comics), then the problem compounds if the grader is required to enter their info/research on a computer database. If the data entry process is one of the hurdles to this problem (yes, there are still plenty of people out there who use a single finger keystroke), then I propose a dictation software which allows the graders to quickly reference information about the book, and continue with their grading practice. This way, there is no disconnect between the grader handling a book for grading, and the grader needing to key-punch that information into a computer. Dictation tools have advanced greatly (check out Windows XP Tablet Edition), and can interpret speech in an exacting manner. This might allow a grading company to offer comments while grading comics without necessarily pulling graders away from the role for which they are hired. This may also lend to the possibility of allowing easily referenced graders notes, indexed by the bar code on the label.

 

 

[Smokinghawk]

Personal preference: Stop calling pressed or cleaned books "Restored." Removing soil is not an artificial modification to a book's appearance. I have a lead on a nice ASM #1 in 9.2 that can't sell because it's Purple.

 

 

[aardvark88]

I agree that a simple clean & press should be blue label. U are right that a purple ASM 1 cgc 9.2 would mean 75-80% off compared to the initial market value of the hi-grade comic when he 1st bought it (say 10 yrs ago).

[comicwiz]

Personal preference: Stop calling pressed or cleaned books "Restored." Removing soil is not an artificial modification to a book's appearance. I have a lead on a nice ASM #1 in 9.2 that can't sell because it's Purple.

 

I don't believe CGC has ever considered pressed books as part of their restored criteria. Whether intentional or accidental (I don't know too many people that would go out of their way to soil a comic) soiled comics means that some foreign substance (dirt) has attached itself to the paper. That isn't restoration. However, if removing that soil requires some chemical agent (more often than not), then I would have to consider that procedure a form of restoration. Removing soil may also be performed without chemical agents, but the results would likely be catastrophic. It is also MO that taking out the corner of a front cover because it bears soil marks would be a pretty dumb move. I have a few early Caps that exhibit some very slight soiling in areas that would otherwise be unnoticeable if they didn't use the bright red backgrounds so damn much The thought of removing those soiled areas has never crossed my mind, and I believe that it gives the book some character.

[comicwiz]

I agree that a simple clean & press should be blue label.

 

Hey odin88

 

Like my eariler reply to Smokinghawk, I think that the term "clean" is open to such a wide interpetation, that if you were to say cleaning ought to be eligable for a blue label, you are likely to raise a few eyebrows. Can you be more specific as to what type of cleaning you would consider deserving of a blue label?

[chrisco37]

Stop calling pressed or cleaned books "Restored."

 

Uh-oh! Where's ablue when we need him???

 

Chris

[aardvark88]

I consider dry or aqueous wash cleaning & pressing conservation, not resto as long as NO color touch & no Japan paper used to reinforce tears. This has caused debate b4 on these forums as many are paranoid about the slightest procedure performed to enhance raw comics to their original off the rack state.

Because Cgc deemed clean & press purple, they have changed the way most collectors feel about this procedure as purple label is the kiss of death on eBay.

[CosmicBob]

I wish they would be more specific on the label when they say "Cleaned". Like what was it cleaned with? I think that would help with people buying purple label books.