is 3rd party grading becoming a dying business?

classiccoin

certainly anyone who reads this forum can read the writing on the wall.. new gimmicks such as first strike on bullion coins.. the apparent dying out of the crackout games played by dealers.. super grade moderns and bullion coins becoming the new wave of slabbing.. most every real coin worth a 3rd party holder as already been graded..

do you think the idea of 3rd party grading has pretty much run its course and all thats really left at this point is brand new mint issues being slabbed to flip on ebay at grossly inflated prices to speculators.. and all the plethora of coins submitted so many times they are finally overgraded and no collector wants them.. i feel the age of plastic is becoming a thing of the past because all it does at this point is protect the value of all the overgraded coins and make near worthless moderns into grade rarities for registry players..

ziggy29

I don't think it's a fad or a passing phase, but I do think as more and more coins are slabbed and eventually end up overgraded in plastic tombs, the grade listed on the slab will begin to matter less and less, or at least be discounted. I think more people are sick of the game, but are resigned to the fact that this is how the game is played now.

Regardless of the games played by TPGs, crackout artists and coin doctors, there will ALWAYS be a place for reputable certification services for authentication even if nothing else.

classiccoin

"but I do think as more and more coins are slabbed and eventually end up overgraded in plastic tombs, the grade listed on the slab will begin to matter less and less,"





very good.. that was the premise of my thread.. unless you collect or speculate in grossly overpriced supergrade bullion coins the game has run its course

Cladiator

<< <i>very good.. that was the premise of my thread.. unless you collect or speculate in grossly overpriced supergrade bullion coins the game has run its course >>

Enter the 100 point grading scale and it starts all over again.

coinguy1

<<the apparent dying out of the crackout games played by dealers>>

That's not apparent to me.

lordmarcovan

It's here to stay.

Is it perfect? No, far from it.

Does the whole system and idea of coin certification need tweaking? Yeah, probably.

But it's here to stay. Not even the fly-by-night, "create your own grading service" shysters on eBay and elsewhere will spoil it. They'll give it a black eye and a broken rib or two, but certification will survive.

RYK

CC,

Interesting perspective. I remember when John Maben tried to tell us here that all coins eventually getting into the highest possible holder was the sign of an efficient coin market. Efficient for him, maybe.

I think you make some valid points, but I do not see the TPGs running out of steam yet. They seem to be running out of usefulness to many collectors, though. Despite this, the individual dealers, the coin market, and TPGs form a triumvirate of sorts, and all feed off one another for mutual benefit.

coinmickey

Also, remember that the US Mint is starting to crank out an unreal amount of new coins per year. Just look at 2007 for new Statehood Quarters, Presidential Dollars, 1st Lady Gold, Commems, not to mention this new expanded set of bullion (W mintmark, Uncirc., Proof, Burnished, etc. and so on to the point of confusion). It's dizzying....

So I have to think that the TPG's are not going to go broke with so many submissions "in the pipe" as it were.

WoodenJefferson

I cannot speak for the TPG's because I am not on the inside looking out, but as a business model you can have an opinion.

To an extent I would agree their business is decreasing but not dying. There are new discoveries everyday with new and exciting rare and not so rare coin finds. Coins that have languished in safety deposite boxes until thier heirs have the right to open said boxes, or deceased owners who have no heirs. It's a long litigation for a bank/state to dispose of safety deposite box holdings.

There are others who are just now finding out that Uncle Phil's silver dollar collection is actually worth something more than just silver and that there are companies out there who will make it so.

All sorts of senarios occur everyday that assures the TPG's future business.

Mint announcements of new coinage is like money in the bank for TPG's

The Flavor of the Month is getting all the attention right now...peaking submissions from the 1999 roots of Statehood Quarters up through the First Strike on bullion gold and silver.

I'm sure a level of business was always hidden in there for TPG's, like any business you are going to have peaks and valleys...you hire staff and then you fire, hire staff again, down size, etc.

1921obsession

It's ready for a sea change, I'll tell you that much.

291fifth

The real answer to the question is in the profit and loss statements of the TPG's.

Which TPG do you think is the most profitable?

IGWT

Will we ever reach the point where there's nothing for TPGs to do with classic coins other than stand behind the guarantee of coins already certified?

I suppose it's possible that huge reservoir of coins not now worth the cost of certification will rise in value to the point that certification makes sense. Maybe it's also possible that fluctuation in grading standards between two (or more) grading services over time will continue to drive submissions as crossovers to maximize sales prices. I presume that there's also a chance that a constant "error rate" will ensure that a percentage of coins make multiple trips to the grading room.

Gemineye

<< <i>is 3rd party grading becoming a dying business? >>


I don't think so.They might make a mistake now and then and be stubbron not to admit their mistake..but in the end they will.The strong will survive.The shady ones will wither away.The major TPG provide a decent service that should not be overlooked inspite of some differences or errors in judgments.

nwcs

I don't think it's a dying business but I do think that it's a mature business model.

pharmer

For the first time since I joined this forum, I read a page of the registry forum threads, and a few posts in most of them.

Talk about KoolAid drinkers.

Dying? Are you familiar with the registry forum? I got the impression they love their slabs more than life itself.

sonoranmonsoon

Remember the Peter Principle. Every coin will eventually be promoted to its level of incompetence. (or in this case, its overgraded slab)

410a

Face it, "Its a communist plot"

JRocco

Dying...no
But I do think that more and more of the business model involves First Strike type promotions with modern coinage. That is where the money is and money is the reason they are in business---the TPG's are not your friend or your buddy---they are a business. If selling cigs is big money--big companies sell cigs, if selling First Strike and BS nickels is big money TPG's will go for it.

kranky

The Mint's ever-increasing output of coinage manufactured solely for collectors will keep the TPGs busy for a while. Coins which come from the Mint in near-perfect condition still are being graded, just to find the 5% of them which are 70s. And people buy the slabbed 69's at a premium to the same coins in Mint packaging (which have a 90% chance of already being 69's). Add the First Strike, 20th Anniversary and other special labels. And add the premiums that people pay for 3 coin sets with consecutive slab serial numbers. Add certain issues where you can't even look at the coins before submitting them because the box has to be sealed. Add the opportunity for easily creating more and more new registry set categories that people will compete in.

All of those bode well for massive submissions of Mint output year after year.

But even when the Mint has screwed things up too much like what occurred with the classic commems in the mid 1930's, and people quit buying everything they crank out, that won't kill the TPGs. Even if submissions were to decline, their business can easily scale to a smaller size and still be profitable.

keets

is 3rd party grading becoming a dying business?

perhaps you should consider that business may be starting to die for some third party grading companies in the future but it's doubtful that the concept will end. as collectors become more savvy and the top grading companies follow suit, the field should narrow and the remainder should get better at what they do.

hey, isn't that what's happening now??

JRocco

<< <i> Even if submissions were to decline, their business can easily scale to a smaller size and still be profitable. >>



I agreed with all you said kranky up till this last line......that is unless the corporate officers give up their corporate profits and start grading the coins themselves for a discounted salary...

coinkat

No... not even close. There are many countries with a far richer numismatic tradition that TPG, IF DONE CORRECTLY, can have a significant impact. Because this is the US forum, I will comment on US coins. There are opportunities that exist if TPG companies want to lead and not follow.

jbsteven

<< <i><<the apparent dying out of the crackout games played by dealers>>

That's not apparent to me. >>



ditto

TwoSides2aCoin

A very wise fella recently reminded me that it was not the guy who first struck gold that became the first millionaire during the gold rush, rather..... the guy selling shovels.

allmancoins

Grading is not a dying business.

It is typical of most if the businesses in the US today.
For example, if the grading company is a public company, they must continue to show increased profit every quarter that passes. Every business eventually hits that point in time where you cannot continue to grow 10% or better in a quarter. If you slip a quarter the stock value will drop and the execs will lose money as well as the shareholders.

Companies try different gimmicks to increase sales, its a short term fix. After the gimmicks have been exhausted, they outsource jobs to save money by paying lower wages.

The solution

The shareholders should vote to outsource all of the senior executive management and the little guys "us" can still work in the USA at a decent wage.......

RedTiger

Dying? No. Mature? Yes.

Submissions are down, especially if only counting non-modern, non-bullion submissions. However, the word "dying" is much too strong. There is plenty of money, and profit left in the business. However, just as there was a time when the U. S. auto industry had its growth phase, it is long past that. That said, there is plenty of money still to be made. There are any number of industries that are mature, but still yield good profits to well managed companies.

Dying would be something like typewriters.

coppercoins

<< <i>Also, remember that the US Mint is starting to crank out an unreal amount of new coins per year. Just look at 2007 for new Statehood Quarters, Presidential Dollars, 1st Lady Gold, Commems, not to mention this new expanded set of bullion (W mintmark, Uncirc., Proof, Burnished, etc. and so on to the point of confusion). It's dizzying....

So I have to think that the TPG's are not going to go broke with so many submissions "in the pipe" as it were. >>



Same thing essentially happened in the sports card industry back in the day and basically completely busted the market. After every company under the sun was making refractor reflector sunbeam piece of bat cards that scratched your back while singing Dixie for $20 per pack because people were bored with plain old cards and bubble gum, they crashed the market with the gimmicks.

I can see the Mint doing their share in making people wanna barf every time they announce a new gimmick. They're gonna end up hanging themselves with their own product, red tape, and highway thievery.

Myqqy

Considering the enthusiasm I see around here for slabbing modern bullion and trying to get 69 and 70 grades, I think that tpg's have a revenue foundation that is still rather solid...

53BKid

In contrast to the 60s and 70s, modern coin collecting is so much more interesting. As a result, signficant waves of new collectors are being drawn into the hobby. We may not see as much at our tables, but boy eBay sure has exploded. There are collectors out there that slabbed coins are all they know. My guess is some people really won't ever take the time to learn what makes a coin even say, AU and MS. But as their collecting interest moves from the moderns, say state quarters or upcoming presidents, into classic coin collecting, a great proportion will continue to just buy slabbs.

Its here to stay IMO.

Happy Collecting!

morgansforever

I slab the modern stuff myself, I don't need a TPG to tell me it's a 69 or 70. One tick mark drops it from the 70 pedestal, to a 69.