Why do you have to pay a grading company more money if the book is worth more money? 2 2

[Lazyboy]

On 2/20/2024 at 10:28 AM, csaag said:

On 2/20/2024 at 10:13 AM, Grendel72 said:

Insurance liability.  

yeah but if you get upcharged, your insurance stays at what you declared value when you submitted. I believe I've seen that from CGC comments

Their insurance. Their liability. They don't care about yours.

[DougC]

I am fine with the up charge for high value submissions but I am cautious of CGC taking on the role of appraiser, grader, and bill collector without also extending that value to the customer.

If over the course of grading and finalizing, CGC decides your high value submission should get bumped up to unlimited value they need to be forced to provide proof of that appraisal when returning the submission in addition to raising the initial declared value in case someone at CGC steals the book (or they lose it).

[The Lions Den]

On 2/21/2024 at 4:22 AM, DougC said:

I am fine with the up charge for high value submissions but I am cautious of CGC taking on the role of appraiser, grader, and bill collector without also extending that value to the customer.

If over the course of grading and finalizing, CGC decides your high value submission should get bumped up to unlimited value they need to be forced to provide proof of that appraisal when returning the submission in addition to raising the initial declared value in case someone at CGC steals the book (or they lose it).

The wise man breaks wind and is gone...  

[Dr. Balls]

As far as the insurance goes, CGC likely has a blanket policy to cover all books to a certain value at their facilities. The book that is worth $100 and the book that is worth $10,000 both have the same coverage, and - mathematically - the premium is spread out over however many books are on site at any given moment. 10,000 books with insurance coverage of $10M with a premium (guessing) of $10,000/year means that each book - regardless of value - costs $1 to insure.

Paying the fee for a book that *they* say is now worth X because it's in a slab is a predatory up-selling tactic that customers have to pay to play the CGC game.

[Nick Furious]

To find the answer, ask the question in reverse.  Why does a grading company have lower priced tiers for less valuable books?  

[revat]

On 2/22/2024 at 9:44 AM, Dr. Balls said:

As far as the insurance goes, CGC likely has a blanket policy to cover all books to a certain value at their facilities. The book that is worth $100 and the book that is worth $10,000 both have the same coverage, and - mathematically - the premium is spread out over however many books are on site at any given moment. 10,000 books with insurance coverage of $10M with a premium (guessing) of $10,000/year means that each book - regardless of value - costs $1 to insure.

Paying the fee for a book that *they* say is now worth X because it's in a slab is a predatory up-selling tactic that customers have to pay to play the CGC game.

And you don't think its at least possible that they assign a higher proportion of their cost of insurance to the books in their care that actually cost more?  I think most accountants would do that.  Or that the insurance might even be paid per item similar to workers compensation.  I'm not saying they're not trying to profit on the premium of more expensive books or take advantage of a de facto monopoly, but to say that none of it has to do with insurance is .... not a credible argument to me.

[Dr. Balls]

On 2/22/2024 at 2:59 PM, revat said:

And you don't think its at least possible that they assign a higher proportion of their cost of insurance to the books in their care that actually cost more?

A comic book is not a risk factor like a 19-year old driver or a house in a flood plain. Across the board, those 22-32 pages of paper cost the same to insure because the coverage covers the entire facility of books, certain books are not on a sliding scale of cost of coverage - where an Action 1 costs more to insure than an Action 1 Reprint.

If an employee ripped a X-Force #1 in half, and then ripped an AF15 in half, the insurance covers both books for the same premium. They can say that the fees are associated with the insurance, but they're not.

 

Edited February 23 by Dr. Balls

[Nick Furious]

On 2/22/2024 at 6:51 PM, Dr. Balls said:

A comic book is not a risk factor like a 19-year old driver or a house in a flood plain. Across the board, those 22-32 pages of paper cost the same to insure because the coverage covers the entire facility of books, certain books are not on a sliding scale of cost of coverage - where an Action 1 costs more to insure than an Action 1 Reprint.

If an employee ripped a X-Force #1 in half, and then ripped an AF15 in half, the insurance covers both books for the same premium. They can say that the fees are associated with the insurance, but they're not.

 

You are correct, the pricing is not a function of variable costs.  It's a function of how much value their service will add to the product, and what the market will bear because of that.  That's why I say to ask the question in reverse to get the answer.  They would love to charge $500 per book if they could.  But for most books the service will not add enough value to justify it and obviously the market would not bear it.  So instead of saying that they charge more for more valuable books, we might say that they charge less for less valuable books.  

Edited February 23 by Nick Furious

[Ryan.]

On 2/22/2024 at 4:59 PM, revat said:

And you don't think its at least possible that they assign a higher proportion of their cost of insurance to the books in their care that actually cost more?  I think most accountants would do that.  Or that the insurance might even be paid per item similar to workers compensation.  I'm not saying they're not trying to profit on the premium of more expensive books or take advantage of a de facto monopoly, but to say that none of it has to do with insurance is .... not a credible argument to me.

I assume they pay their insurance premiums annually, not daily.

[namisgr]

On 2/20/2024 at 11:43 AM, revat said:

I’m sure some of it if not most is insurance and liability, but there are probably other aspects that can only be explained by decision makers within the company.

I don't think it's a stretch to consider that the more value slabbing and grading adds to the selling price of a comic, the more CGC can charge for the slabbing and grading service.  The marketplace has established that the value of their service is much, much greater for the submitter of an Amazing Fantasy #15 (tens of thousands of dollars)  than it is for the submitter of an Amazing Spiderman #126 (tens of dollars).

LowGradeBronze and NickFurious have made this point already, and I agree with it.  In comparison, I suspect that their higher insurance burden for more valuable books is just a relatively small contributor to deriving their tiered fees.

Edited February 23 by namisgr

[Gaard]

This book is worth about $100. It costs $25 to grade.

 

 

 

This book is worth about $100. It costs $40 to grade.

[shadroch]

Why the price difference?

[Gaard]

Exactly

 

[GawkHawk]

I'm thinking that the fees are reversed as shown - $25 for FF 154 and $40 for FF 153 - due to the Modern cutoff date...?

[Gaard]

On 2/26/2024 at 10:43 AM, GawkHawk said:

I'm thinking that the fees are reversed as shown - $25 for FF 154 and $40 for FF 153 - due to the Modern cutoff date...?

my bad...you are correct

[Qalyar]

Regardless of the merits of this sort of fee structure, it's hardly something that CGC invented, nor is it unique to the comic book encapsulation industry. All of the major, reputable grading services for both stamp and coin collecting have some sort of broadly similar practice, where items with higher market value cost more to authenticate. I'm pretty sure that's true for sports cards also.

Frankly, it could be worse than the way CGC does it. Most of the major philatelic authentication services literally base their pricing off a set ratio of Scott catalogue value. I can't imagine the trainwreck that would commence if CGC pricing was directly pegged to Overstreet values. (Now, some of that's because Overstreet really phones it in, but... still.)