A new Grading Service on the horizon??

keets

While I was typing my reply to a thread concerning NumisTrust slabs, it ocurred to me that the conditions are probaly as ripe as ever for another competent Grading Service to emerge. I know on first thought that seems ludicrous to some, but consider all that takes place in our little microcosm of the hobby and give pause for a moment.........................................................................there, that should be long enough. Now that you've stopped laughing, lets get reasonable!!

The state of affairs has realistically reduced a logical choice to three companies in no particular order-----ANACS, NGC and PCGS. There are other choices to be sure, but they are taken less serious almost by the day and their presence at major shows has shrunken to one of an empty table. At the point of sale, the slabs of the "also rans" consistently link themselves to the other three, most notably PCGS due to the online price guide. This doesn't seem to help the sale price, though.

All this brings me to my thread topic. While I don't go out of my way to purchase or even look at slabs from NumisTrust, I find the holder aestetically pleasing and the coins therein a bit less mis-graded than the other companies they are rightfully grouped with. My belief is that they rushed too quickly into the marketplace, opted for quantity over quality for some collector/dealer visibility. I also believe that ICG suffered much the same fate though at a slower pace. ICG seemed fine at it's inception, nice holder, top management and reasonably strict grading standards which waned after a period. I would expect that somewhere out there is a person with a business oriented mind to do it right.

I can't imagine a small group of reasonably proficient Numismatists undertaking to start a company on a small scale and at a slow pace failing. History from the past 5-10 years has laid out all the traps and pitfalls to avoid, namely, inconsistent market grading and a rush to collector/dealer acceptance. There seems more than enough dissatisfied customers from the other companies to give an upstart a point of entry. A competitive product, a consistent grading standard----hey, how about the ANA's!!!----and sound management would rule the day. No hurry to battle the big three and no worry of competition from the also-rans would seem to spell success.

Any comment, pro or con?? I figure it's only a matter of time before we see something like this, the only question is how it's approached and by whom.

Al H.

Tsimmerdown

Why not? Like all businesses in a competitive environment, a new service could pop up any time. For this business to thrive beyond the introductory period, they must find some competitive advantage which differentiates themselves from their competition. You could pick any myriad of factors to try and develop this edge, be it price, submission turn around time, strict grading standards, etc.

Since from your post it seems that the low cost services are fading away, trying to compete on price doesn't seem to be the best route. It seems that the most successful services are those who uphold strict standards, and are therefore more desireable. So obviously that's an ESSENTIAL in order to succeed. You would at least have to be on par with PCGS to gain the level of respect and acceptance within the collecting world.

So what else? Submission time seems to be a good one to compete on. There are so many posts complaining about the submission times with PCGS. This is a threat for the company, and an opportunity for a competitor. If I could offer a service with grading standards that were as strict as PCGS (and perceived by collectors as such) and I could reduce submission times, that could give PCGS a real run for their money.

OK, these things don't happen overnight. But a company who wants to last, needs to be aware of these threats, and likewise a company looking to enter the marketplace has to do this sort of analysis.

There's so much more to the equation, but I don't have time to write the entire essay. That's just one facet.

Pushkin

nwcs

I've often thought about the same thing. But there are significant barriers to entry for a new one: equipment, space, advertising, other overhead, and graders. You'd have to cannabalize from the other companies to obtain the graders you need. And a big startup cost. Also, you'd have to be patient to turn a profit. Nowadays companies aren't as willing to invest in loss to build a sounder business and profit later.

But you'll also have the same problems the big guys have. Consistency and cross overs. There isn't a really good way to deal with the grading consistent problem until there is a true repeatable process for grading. Cross overs will hurt because until there is a reputation, people may always be transferring slabs from and not to the holder. Also, the other problem is that with a new service, people will assume right away that it is another NTC or ACG. And it takes a long while for that perception to go away.

In the end, the question is what could a new grading service provide that the others do not? If it can only be a "me, too, but maybe better -- at least different" it has less of a chance than a "I do this and no one else can" model.

Neil

zenny

I think the problem is, and always will be, a grade is an opinion and not a fact. The best numismatists often disagree, sometimes by more than a single point or designation.

I can't imagine that there will come a time when all coins will be in holders with numbers that every one will agree upon. Just can't happen.

What does happen is that the marketplace, in effect, grades the grading services, by consistently placing relative values on the slabs within which coins have been placed. Those which are more consistent/conservative generally attract better prices.

Coins which are so conservatively graded that they prove, at least once, to look like the next higher grade, will then attract even better prices.

Eventually as well, coins that reside in those lower tier slabs which can upgrade to better service slabs, do.

Although Adrian has been doing a good job of proving that the more graders the better, i just don't see that becoming economically viable.

z

kranky

There is a group who would never submit to anyone but PCGS because they believe PCGS is number one. There is a group who only looks at the coin and not the holder, and is just as comfortable buying raw. Both of those groups are comparatively small, and a new service wouldn't need to worry about either one.

The biggest barrier to entry is market acceptance. So here's my brilliant idea for a new service to adopt: guarantee that the coins will cross at the same grade to one of the big three. Not all, but at least one. If the grading is comparable to the big three, and it's consistent, there is a big market who would be comfortable with the product.

XpipedreamR

How about CUMBGS (Collectors Universe Message Boards Grading Service)?

Coins submitted would be posted here, and a grade would be determined as an average of all the responses.

We can get all the details worked out later.



I'm sure PCGS wouldn't have a problem with this, right?

nwcs

There is one kind of service which would be different and good. A throwback, sort of, to the 1970s. A grading service which isn't a certification service. That is, use a new holder type that allows all sides of the coin to show but is also openable so the coin can be removed and inserted as desires. The coin would be graded and the holder would show the grade but the coin wouldn't be certified because the holder isn't sealed.

The holder would indicate in some way that the coin may not be the same as when it was submitted. Something like this may appeal to the people who do not like slabs but like authentication or maybe help with grading. Would also appeal to people who like slabs and aren't interested in pure re-sell. Isn't as good for people who want to flip coins for profit or for sight unseen.

mgoodm3

Crossovers are something that a new grading company could gain a reputation with either good or bad. If your new CUMBGS slabs consistently cross over to PCGS or NGC at similar grade, the serious collectors would note that and would start to trust the upstart slabber.

paigowjohnny

It's about time for Paigow's Independent Grading Service (PIGS).
Pushkin sums it up pretty well. Somebody wanting to start or improve the name of an existing service is gonna have to throw a lot of $$$ at hiring a brand name or two to establish some credibility, advertising out the wazoo, top quality packaging/slabbing, excellent customer service staff...and at a reasonable price.
ANACS still seems to be a good service...but I think PCI, SEGS, ICG, and the others have so tarnished their reputations that it would take a MASSIVE amount of capital thrown at improvements and marketing to become even reasonably accepted in the marketplace.

291fifth

The biggest challenge would be to overcome the big dealer's insistence on PCGS or NGC. This is a basic part of their pitch to their investment clients. ANACS faces this problem every day. Any new service would have to be very well thought out from the start and have written grading standards that would not change over time. The SEGS slab would be my choice for a holder but at least for now it is not available for use by anyone but SEGS.

As I have said before, ome of the challenges would be to overcome the dealer/collector pressure for "their" grade and not the correct grade. I believe this is the factor that really did in some of the grading services.

LucyBop

I have to say, the real GEMS are found in Pushkin holders!!!!

Barry

It would be interesting if the guys who scored at the top of the PCGS grading contest went on to form their own service. That would give them instant credibility. However, as these guys are dealers, they must not sell any of their own slabs. It is a conflict of interest, despite what goes on now, and hints at impropriety.

I believe the market is ripe for another service, given the current delays, inconsistent grading, etc., which still makes me wonder why ANACS doesn't command the respect they should get.

MICHAELDIXON

I believe the market is ripe for another service,
.
There is a new grading service on the horizon for Morgan dollars only that should be coming online within the next 6 months. I can't give any additional information, as I've been sworn to secrecy.

DHeath

Al,

There might be a way to do it without holdering a coin. How about a written opinion of any coin in any TPG holder, along with a consensus of grade and a photo, consensus grade, and a textual explanation of why the panel graded the coin the way they did.

nwcs

<< <i>I believe the market is ripe for another service,
.
There is a new grading service on the horizon for Morgan dollars only that should be coming online within the next 6 months. I can't give any additional information, as I've been sworn to secrecy. >>

Better than the Silver Dollar Grading Service, I hope!

keets

perhaps part of the answer would be "niche grading" similar to what MichaelDixon alluded to. already the guys involved with EAC have zeroed in on a specific area and probably have more expertise than PCGS et al. it's a daunting task trying to grade the entire realm of U.S. coinage. not that i think that's the way to go, but it might be a way to start.

with regard to responses hinting towards certificates of one form or another, we're probably past that for good in the hobby. sonically sealed capsules seem to be the best that can be offered at present, what needs to be improved upon is the human element. consistent grading and customer service loom as the biggest challenges, with the former being primary.

al h.

nwcs

Or maybe a group can come together and devise a repeatable process for grading that will take on the ANA grading standard. If it could be done, it would be a tremendous boon. It doesn't have to look anything like the existing one, either. Why be limited that way? Some enterprising person/group could devise one and get it published. See if it would be accepted. If it shows to be easy to do, repeatable, and easy to learn it would have a dramatic impact within 15 years of it being released.

Pushkin

wondercoin

THIS ONE WAS SUGGESTED TO ME TODAY BY A BOARD MEMBER IN AN EMAIL. SCARY NAME THOUGH IF ABBREVIATED. I think this board member may have some "issues".

"Society of Collectors Universe Message Board Addicts Grading Service"



Wondercoin

Pushkin

GOLDSAINT

As an old corporate planner, here is what I would do, not start yet another slab company.
In Bullets:
Form a corp.
Do a small Internet public offering say 2 mil.at ten dollars.
Acquire three of the existing slab co. for stock
Change the name of all 3 to a new name
Hire a roving grade auditor to over see all slabing
Give a refund like PCGS on your own over grades.
Guarantee 72-hour turn-a round’s for economy.
Use the 2 mil to buy all the best coins you could at wholesale and
have them put in your slabs to be sold at auction.
Give early discounts to large auction houses; slab their coins at your cost for six months
Have an auction for the 2-mil wholesale coins and invite consignments and have a 7% buyers premium.
Turn the 2 mil and the consignment fees into 3 mil. And do it again this time with extreme rarities and put it on T.V. in a 3-day extravaganza on the learning channel with 20 mil. worth of consignments.

WANNABEDEALER

To get a refund on a PCGS mistake takes outraged dealers and collectors and an act of God.

coinkat

Interesting concept...

vam44

Is there anything out there,past the edge of the earth,I mean,like,other than PCGS?

Stuart

I've read that one of the key success factors with PCGS was the establishment of the dealer network at the outset of the company.

I believe that in orfer for any new third party grading service to be successful, they would have to recruit and establish a national major dealer network to submit coins and to sell coins from this new grading service.

jim

Personally, I feel we should be rid of the grading services and go back to the days when grading was based on one's ability and knowledge. Buying and haggling over grades and pricing was an art of the hobby and was a test to one's ability in itself. The fact is the grading companies are setting the market based on the slabs, in most cases your buying the slab not the coin. Although I do admit I do like the slabbing process for preservation of the coins Besides, the grading companies have made this hobby to expensive for a lot of people and have created two levels of collecting. Maybe I'm wrong but, that's just me....

WANNABEDEALER

Is there anything out there,past the edge of the earth,I mean,like,other than PCGS?
Sure is, out there near Neptune and Pluto, URANUS

dorkkarl

<< <i>conditions are probaly as ripe as ever for another competent Grading Service to emerge. I know on first thought that seems ludicrous >>

nope, i totally agree, in fact, i can virtually guarantee that a new service will emerge

i don't base my assertion on your same reasoning necessarily, but i'm very sure you are correct.

K S

edsondl

Does anyone see foreign collectors becoming more involved in coin collecting and slabbed coins. The big three US TPGs couldn't possibly keep up with a lerge international demand. Also, do you think that PCGS should open a second satellite operation somewhere on the east coast? While this would require hiring more graders, the abitlity to optimize a new facility, while leaving room to grow would alleviate some of their current problems limiting growth, decrease shipment time from the east coast, decrease travel time to some shows and may entice new graders who do not want to live in California.

Could a company specializing in coin photography once again make an interesting TPG upstart?

keets

hey Karl

we've got to stop agreeing like this, at least in concept!!

al h.

dorkkarl

<< <i>hey Karl we've got to stop agreeing like this, at least in concept!! >>

oh yeah??? i TOTALLY disagree w/ that statement! your completely wrong!!!

K S

coltgus

I would like to see a new grading service which grades significantly tougher than the current services. I believe there has been quite a bit of grade inflation, especially in higher grade coins which I am familiar with. I mean you can find MS67 coins with a mark or two which is what I would expect on MS65. It would be risky because who would send in their coins to get low grades ( rhetorical question ) but I actually think it would work because the current services would lose credibility. I've noticed that in high dollar coins where the next grade up is huge the current services grade pretty hard.