log jam in the log in unit...
olb31
Posts: 3,368 ✭✭✭✭✭
I've written about this before, but I will reiterate it again. As a CPA, I do taxes. I can do 1000 returns for $100 each and make $100,000 or I could do 500 returns at $200 each and make $100,000 or I could do 250 returns for $400 each and make $100,000, and so on. The more returns you do the more people involved. A lot of the same process are used to do the 1000 returns or the 250. I can tell you that almost every CPA would rather do 250 returns for $400. They may be a little trickier than the $100 returns, but far less hastle than dealing with 4 times the number of people.
Now move forward to PSA. They lowered the amount of bulk you can send in to 20 items. Much easier for anyone and everyone to send in 20. But look what it does to the log in department. Totally crushes it. And PSA only gets $250 per order. So they have limited the total cash hall per order while way over burdening the log in department.
While many of you may not like the fact you have to send in more, the reality is that's what would work better profitably and timely for PSA. PSA can grade 100 orders per day of 20 cards or they can do 10 orders per day of 200. Same gross revenue, much lower volume client wise, and package wise. 90 less people asking questions, 90 less boxes. in fact, the bulk order should probably go something like this:
100 cards $12 each
250 cards $11 each
500 Cards $10 each
or something like that. Now each order is bringing in a minimum of $1,200 vs $250.
One again solely my opinion, but with tax time approaching the last thing I want to do is a lot of $100 returns and fewer $400 returns.
Comments
Well said ( or Well written )
I was very surprised when they lowered the requirement from 100 to 20. But since bulk had never been close to $15 in prior years, they may have been afraid to change the demands on submitters too much.
I agree that the structure should change.
One thing I'm curious about is whether there will be any drop off in submissions from upcoming products. Topps is bringing back borders--that could disqualify a lot of cards (especially if the centering is as bad as it was for 2020 bowman chrome.) The draft class in basketball is also supposed to be weaker. There are still a lot of cards available from 2019, but many of the zion's and morant's are already cherry picked. Prizm football, from what I've seen, has lousy QC.
Excellent post and very well written. I believe PSA will continue to adjust the price structure and I can see another change soon to hold down submissions. Increasing the ultra modern bulk to 100 and at $20.00-25.00 per card may just happen for a short term basis until the back log is entered in the system and graded. We are looking at 8-10 months from arrival at PSA to graded cards shipped back to the customer and this timeline is increasing.
I like the change to 20/$199 - it helps me manage cash flow. I wouldn't hate it if they moved the minimum qty back up either, but I wouldn't prefer it.
Why would they do anything to discourage submissions? People are waiting 6+ months and STILL sending in more. The market has spoken: "We will tolerate the wait."
No doubt there are many people that like it. But I'm not looking at it from your end. I'm looking at it from the business end. I'm sure my clients would love me to charge them $50 - $100 for a tax return. I would probably pick up hundreds of clients. But that business model causes many issues. 1) more people to deal with means more communication and more deadlines, 2) these prices make me work harder and make less money, I would assume you would prefer to work less and make as much or more, I would 3) No one wants to hear that I have had their tax return for 15 weeks and haven't even looked at it yet.
The one thing PSA has that I don't is lack of competition. My clients would leave me instead of waiting 6 or 8 months for me to prepare a tax return. Lots of people do tax returns. PSA can kind of set their own pace price etc. Think of this also, the employees. they probably have to employ quite a few people just to log in the cards, protect the inventory, etc. Bigger orders cuts down on both. And the more hands in the pot doesn't always translate to more safety or efficiency.