If it's broken, why doesn't PCGS fix it?

braddick

You'de think if there is a problem a company would fix it. A few years back VONS (a supermarket chain in southern California) conducted a survey and discovered the number one complaint of its customers was waiting in long lines. Not an innovative problem, but one VONS cured by implementing a policy of opening up a new check-out line when there were three people in line at the others.

It was wildly successful and that solution coupled with other customer suggestions led to VONS becoming the number one supermarket chain.

-How long has PCGS been aware our number one complaint is long waits for completion of submissions? Why is PCGS not fixing that problem? I know it's been addressed, but where is the solution? Where's the relief?

I see NGC creeping up in market shares, generally at a loss to PCGS. I firmly believe if NGC stopped selling to QVC or The Home Shopping Network and offered a black shell slab as a option you would see even greater gains.

There are really only so many coins graded each month. If NGC (and, to a lesser extent, but one not to be ignored, ANACS) grades more that is fewer being sent to PCGS.

I'd hate to think that is the answer. Stress enough customers to cause them to flock to other Services thus decreasing submission times!

-Come on PCGS. Your loyal customers have spoken. Please, open up another "check-out" line!

fcloud

They just jacked up their prices again. Won't that make the lines shorter? You know the supply and demand curve stuff.

IrishMike

Demand curve depends on how price sensitively submitters are.

fcloud

It should take out some of the little guys.

BAJJERFAN

<< <i>Stress enough customers to cause them to flock to other Services thus decreasing submission times! >>



That means then that they will get mine done sooner. What do you think they should do? Get smoe folks from Job Service or ManPower?
Maybe they could get elitest and snobbish and only grade coins worth more than $5K. Methinks they are well aware of the problem but the kinds of folks that YOU want gradin your coins don't exactly grow on trees. In a way they are a victim of their own success.

braddick

<< <i>

<< <i>Stress enough customers to cause them to flock to other Services thus decreasing submission times! >>



That means then that they will get mine done sooner. What do you think they should do? Get smoe folks from Job Service or ManPower?
Maybe they could get elitest and snobbish and only grade coins worth more than $5K. Methinks they are well aware of the problem but the kinds of folks that YOU want gradin your coins don't exactly grow on trees. In a way they are a victim of their own success. >>

Difficult to believe there are only a half dozen or so world class graders out there.
I can think of a few right on these forums that, for the right incentives (read: cash) would grade for PCGS and in some cases are probably over qualified.

IrishMike

<< <i>

<< <i>Stress enough customers to cause them to flock to other Services thus decreasing submission times! >>



That means then that they will get mine done sooner. What do you think they should do? Get smoe folks from Job Service or ManPower?
Maybe they could get elitest and snobbish and only grade coins worth more than $5K. Methinks they are well aware of the problem but the kinds of folks that YOU want gradin your coins don't exactly grow on trees. In a way they are a victim of their own success. >>



While I don't disagree with what you said, why doesn't NGC have the same problems. According ot them they are grading as many if not more coins. Could it be the bulk submissions by dealers are really the culprit in causing the backup?

XpipedreamR

Maybe they could subcontract some work out to NGC to speed things up

elwood

If you've watched some of the collections being sold this past year. Most of the auction houses appear to be using NGC to do their grading. I don't know the reason?? Better grades?? I think it is unusual that none, that I have seen, have gone to PCGS.
At shows turn around time for the $100 walk throughs have become an issue. Sometimes taking 2-3 days. A large dealer at the beginning of a show will submit 1000+++ coins in one submission. I thought at one show a dealer had submitted over 3,000 coins. Now we have to pay $200 for same day service

mrearlygold

and offered a black shell slab as a option you would see even greater gains.




Ooooh with a multi colored hologram so it helps keep them from getting lost! Sounds neat.

Tom

braddick

<< <i>and offered a black shell slab as a option you would see even greater gains. Ooooh with a multi colored hologram so it helps keep them from getting lost! Sounds neat. Tom >>

For gold coins, such as the ones you collect, the black core would be attractive.

morgannut2

The answer to why it can't be fixed I'd guess lies with the very high cost of living in the Newport Beach area verses Florida. Because PCGS really needs more new graders at the entry level salery level, I suspect these new hires aren't compensated sufficently to attract adequate numbers and retention.

tmot99

In your scenario, Vons has many competitors.. PCGS only has one real competitor ( I know others are reputable but NGC is the main competition). Although not a monopoly, its close. Especially when people feel that they are tighter in their grading.

JrGMan2004

<< <i>It should take out some of the little guys. >>

Yeah, I've got 2 coins I was going to submit at the Regular Service level at FUN... now, I've gotta find someone to go in with me, to make a full submission...

earlwbollinger

Could it be the bulk submissions by dealers are really the culprit in causing the backup?

Well that has me curious, if a dealer turns in several hundred coins to be graded.
What does the dealer do with all the "rejects", you know the ones that didn't make the "top pop" grade?
I haven't noticed them hitting Ebay all that much.

nwcs

I've said for several years now that I think the problem is less with grading than it is with the process as a whole. The biggest gains probably won't be in adding a grader. It will likely occur by improving the processes around the grading part. I don't know their processes, but there are almost always a couple of things that can cause dramatic effects. In the company I work for, a little group (including myself) has dramatically affected the company's efficiency just by looking around and fixing what others think of as normal to show them there are better ways.

tradedollarnut

What, if any, would change in your request Braddick if you found out that PCGS loses money on every service except the highest submission prices and bulk grading? What if the way they are doing it is the only way they can afford to do the cheap tiers?

Would you expect them to implement costly changes for tiers that they don't make a dime on anyway? Just wondering.

clevegreg

If what you say TDN is true, and I don't doubt it, then I think PCGS has a fudiciary responsibility to its stock holders to move out of California, to a state where their fixed operating costs would be significantly reduced. Compare, for instance, the real estate, personnel, and tax costs in California to say Florida.

Greg

relayer

Perhaps during the next supermarket strike, the clerks can go over to PCGS and grade some coins

braddick

<< <i>What, if any, would change in your request Braddick if you found out that PCGS loses money on every service except the highest submission prices and bulk grading? What if the way they are doing it is the only way they can afford to do the cheap tiers?

Would you expect them to implement costly changes for tiers that they don't make a dime on anyway? Just wondering. >>

It's difficult to argue a negative.

If what you are suggesting is true than PCGS's problems go much deeper and are more profound than my simple question poses.

Bear

By charging 100 dollars each coin for economy service, PCGS will reduce

turn around time dramatically. Of course it will also reduce its volumn

tremendously. They can keep increasing the cost of grading untill the reduced

volumn will allow them to come to your house to grade and slab your coin.

It seems much time is spent on servicing the multi thousand coin submissions

by big dealers, leaving the submitters of a few coins at a disadvantage. Perhaps it is the

new bussiness vision ( increased prices + reduced service = success).Who are we to question

success.

IrishMike

I guess you get inside information at the poker table. Look if you have been following the financial results of CU for the past 3 years plus somethings did not work out well for them and have been divested. I am not that intimately familiar with their business but obviously you have to keep a certain percentage whether its 60% or some higher number satisfied to maintain customer loyalty and at the same time in this industry keep your name or brand out there and have it recognized as the leader. If one of these things is improving turn times then all the excuses in the world won't keep flying forever. Good business decisions don't happen by accident or by bad managers.

DHeath

Pat,

There are only two logical conclusions, either PCGS doesn't think it's broken, or they can't fix it.

BAJJERFAN

HRH has addressed this dliemma before. He says the pool of qualified graders is limited and of those available or qualified not everyone wants to up and move whether it be California or maybe even Florida. If qualified graders were available and lookin to work PCGS would hire them; dontcha spose?

tradedollarnut

If what you are suggesting is true than PCGS's problems go much deeper and are more profound than my simple question poses.

I don't think so. Think of it as a loss leader to get people who don't care when they get their coins back to try your services. Perhaps the first question to be answered is where do PCGS's submissions come from. Another good question might be how many $50 and $100 submissions are delayed by economy submissions.

I suppose it might depend on which business model you subscribe to. One business model says you can add a marginal sideline on and all the gross profit flows straight to the bottom line. Another model accrues cost to an item each time it 'touches' a part of the business. Many items shown to be profitable on a marginal basis suddenly become losers on this 'touch accrual' basis. Thus, it's possible to make a profit on a marginal basis on an item yet lose money overall because of how it impacts your organization. Last time someone approached me with a Marginal Model deal I ran away very fast!

I suspect that's where PCGS is right now. The loss may be manageable provided they ignore the screams and leave the turnaround time at 60-90 days, but too much to absorb if they try to do something about it. After all, there's only so much management time in a day and wouldn't you rather figure out how to do more $100 submissions than how to cut economy turn around times?

Bear

TDN, You have hit the companies dilemma on the head. There is a fine balance

between service, name recognition and profit. It is not evil or sinister, it is just

an unfortunate fact of bussiness in a very competative industry. Your sir, are most perceptive.

BAJJERFAN

I don't know how efficient the PCGS operation is but if NGC has only one person grading coins instead of 3 graders to a coin then its obvious they can grade 3 times as many. Also I seriously doubt that PCGS is doing cheapie economy submissions ahead of higher dollar submissions on high priority basis.

keets

a year ago i stood firm and at the defense of PCGS when all the howling was taking place. since then they've given lip service to the problem, improved things somewhat, added/changed some things and now the prices will be going up slightly. it's now time they either get serious and make a real improvement or admit that this is what we're gonna get. i'd have to assume that both PCGS and NGC are aware of what each other is doing, so by raising prices to increase revenue instead of speeding things up, PCGS seems to have already made the admission. the longer turnaround time doesn't matter that much to me but the problem's real enough for too many submitters to ignore.

--how has NGC managed to increase the number of coins they're grading while moving to a new location and keeping their fees the same??
--when was the last time NGC hiked prices??
--what are NGC's manpower requirements compared to PCGS in order to turnaround quicker??
--what is the cost of living difference where the two companies are located and does anyone have a ballpark figure about what operating expenses might be at both??
--while NGC seems to incur a certain amount of "wrath" for their involvement with entities that are a bit suspect, do those things allow them to hold the line on fees??

i think the time for answers other than "There are only so many world class graders" to be spoken. that excuse is getting old. but like i said, it doesn't matter that much to me, properly graded coins are most important and should always be the focus. to that end, PCGS still seems to be the standard setter, though that sentiment is weakening. i believe the problem will be addressed in short order to the satisfaction of us all as that gap narrows further. when the two, PCGS and NGC, are virtually indistinguishable in terms of how we accept their grades across the realm of U.S. coinage, the real competition will start.

al h.

wondercoin

Pat: Good thread.

The "cruel reality"?

1. PCGS/CU revenues are at all time highs.
2. PCGS/CU net profits all time highs.
3. PCGS/CU stock is up almost 1000% from it's lows 2 years ago.
Both PCGS and NGC charge by the Length of time it takes coins to be graded, encapsulated and sent back to the customer.
As a business, the walk thru service at shows and invitationals( At about $100 per coin or more) is at an all time, record high.
As a business and public Co., PCGS should continue to maximize the money they make.
4. Simple solution to anyone submitting to PCGS or NGC.
If you want the coins sooner, PAY for it, just as Many Dealers already do.
5. With PCGS grading over 150,000 coins a month, the potential growth is NOT in more 2 coin submissions at $20 or $30 each.
Just a fact of business life.

Wondercoin

VamCollector

This is why I am readying my next 50 coin order to go to NGC. PCGS has had my last order since the middle of October and I have NO idea when i might see it.

TUMUSS

COMPLACENCY OF THE RICH

Someone is NOT doing their job right...And these decisions lay in the hands of few.