Transcript of Why Did EVERY Grading Company Shut Down Value Tiers?! Beckett and MBA

You have grading questions. So do we. That's why we went to the source. We had Colin Hudson. He's the GM at Beckett. We got all the answers from Colin. What's happening at Beckett? And Nick Dolezal, he is the director of grading at MBA, Mike Baker Authenticated. Give you different answers to some of the same questions we all have. Why does it take so long? Are value tiers going to go up in cost? Yeah, we all have those questions. We got all those answers right here. right now. I'm Ryan Alford

and I'm Bella Schaefer,

and this is Collector Nation.

The state of grading told like nobody else in the hobby. Surface issues,

One of the biggest questions in grading right now is, why can't I get it, and why can't I get it now? Well, you can, it just costs a lot. But why are those value tiers shut down, and why are they shut down at 3 of the biggest graders? I asked Colin that, the GM at Beckett, specifically why Beckett value tiers were shut down and why it all happened at the same time between PSA, him, SGC, and others. Again, this isn't about collusion. There's some insights here that aren't out there, and you won't see these anywhere else. It was fascinating talking to him, and then Nick asking him what is going on in NBA with getting stickers and other things with their grading services and what he's seeing throughout it. Similar answers to the same questions but spoken in different ways depending on the company that's behind it. Right here. Colin, what's up, man? Good to see you again. What's happening?

Yeah, we're doing well. I mean, it's been a heck of a year. I've now been in the seat now as GM of Beckett for, let's call it, 10 months. And what a ride, right? I mean, starting the year, just really seeing how much we could invest in the company, build up our operations here, and it's still not enough to keep up with demand. We fought tooth and nail to kind of hold on as long as we could to keep those base submissions open. I maintained that that $18 base price for that Black Label Chase is the best value in all of card grading. So it really pains me to not have that offering on 24/7, but it just got to the point where we're just packed to the gills here with all of our submissions. I, I do think we're getting to the point where those base turnaround times are consistently slipping to the point where it made sense that we just need to pause here for a bit. Um, and then even on the high end with our priority orders where, uh, we weren't consistently hitting those 5-day turnaround times, and so We're really just trying to focus on let's nail the existing open express order service level.

Let's get to 100% hitting those turnaround times. When we're at the comfortable place with the backlog, let's turn on the base and, um, really just kind of have as simple of an offering as possible. Fast and slow, or sorry, cheap and slow, more expensive and fast, right? And let's get those right before we start adding any additional service levels. But, um, Yeah, long-winded way of saying that things are good. There's been a lot going on, as you can imagine, but also very excited for what's ahead of Beckett.

Is it just coincidental that all the value tiers owned by one company go down roughly around the same time? Is it just because the demand universally is so large?

No, I mean, just think about the order of operations here. So the secondary prices in the market have been really hot. Think about what, with any asset class where there's kind of a natural attraction of, hey, this looks like a really interesting space where maybe I wanna invest in, or I forgot, uh, how much I love collecting cards as a kid. Like there's all these reasons why people are getting into the hobby period. So a lot of underlying dynamics driving demand. Well, driving demand when every single grading company can only increase their capacity in certain steps as they add headcount and expand operations. So demand's outpacing supply across the board. Well, when the first domino falls and the first grading company pauses certain service levels, well, now there's even less supply, so then you go elsewhere. And so what we saw was just a flood of demand after PSA paused some of its lower, uh, lower cost service levels. And we held off as long as we could, but at some point we just got to where we saw we're now consistently shipping out, um, orders weeks behind the target due date. And as much as I would love to have that $18, uh, base offering, best value in the hobby, um, up for as long as possible, it just doesn't create a good customer experience when we're saying, okay, well, we'll take your money and your submission, but we're going to miss on our target.

And I don't want to just continue pushing out the due date. And when we take in an order and say, oh yeah, 75 business days, but then by the time we actually get to it, it's already been pushed out 2, 3 times. So that's where we came to the conclusion of let's just pause the service level for now, get to a point where our backlogs work down enough to where we're comfortable that we are consistently hitting those turnaround times, and then greenlight from there. And, you know, there might be another flood where we're, kind of constantly having to reassess, you know, open, close, open, close, et cetera. And we did that, I think it was September 15th when we did reopen base for what ended up being a little over a week. And the demand was unprecedented. And on the one hand, it was really exciting to see because it was during the time when we had our temporary submission flow set up. So that to me says that there's still just so many people that love the Beckett brand, want to submit with us. It just kills me not to be able to be there for every single one of those customers.

whether you're at base or expressing priority, right? Yeah, there's certainly no coordination. I mean, you can imagine how exciting it is for my marketing team to say, okay, let's lick our chops. We have one grading company over here that's no longer accepting submissions. How do we open the floodgates and accept as many of these orders as possible? So we're doing everything we can. We want to have every single customer that wants to submit with Beckett be able to do so. But the number one thing we think about is Let's not create a terrible customer experience. And in my opinion, to miss consistently on turnaround times and to push out those turnaround times is a bad experience.

I really do think that NBA is in a sweet spot right now as far as, you know, how much we can handle. We'd like to take on more, but we don't want to bite off more than we can chew as far as turnaround times with raw card submissions and Diamond Certified as well. Anything that people submit to us at shows, of course, we're turning around at a steady pace. Whether it be the diamond sticker, you're getting that back usually right there at the show. We're not having to take a lot of that home. But as far as rock cards are concerned, we're consistently and steadily hiring and staffing up across our operations, but specifically targeting graders so that we can actually maintain, uh, quality here at NBA. I can't believe we're still like saying that, you know. I remember back when COVID hit that, that, that was like a first for everyone. Oh, you know, my card's taking 8 months, and here we are 6 years later.

So one of the biggest questions right now with Beckett's been, why is the website down? Why is it still down? Obviously, clearly signs that they were having issues with some of the tech, but I specifically asked Colin what was going on, when it would be back up, and what caused it to go down in the first place. There's a lot of rumors, there's a lot of Made-up stories. Well, there's nothing made up because Colin told us exactly what went down right now.

Yeah, for sure. I mean, this has been incredibly painful for everyone, everyone at Beckett, all of our customers, obviously. And, um, you know, we had been in the process of modernizing a lot of our websites, tech infrastructure, our apps. Even when we relaunched the brand earlier this year, we had been kicking off that work to fully overhaul, to create an entirely new app, fully overhaul the website, et cetera. And it was through that process where we had these security incidents and basically acknowledged that a lot of the existing infrastructure just wouldn't be suitable for where we're going in terms of the scale, future services that we're looking to build onto the existing platform, et cetera. And so we had to make that really painful decision that the best thing that we can do is take all the services offline, essentially rebuild them in parallel to the point where we're comfortable releasing the services as they're ready. So that's where we are now. I'm really excited to see that even in the interim period when we had kind of our temporary submission flow up, there were tons of customers that were continuing to submit with us and just accepted the fact that, you know, hey, this is a temporary setback from a tech perspective.

We'll get through it. We still love the Beckett brand. We still want to get cards graded with Beckett. So we had that kind of ongoing submission flow. And I'm just hopeful and excited about the fact that, you know, months down the road when we can look back on this time and Ideally, um, be happy with the fact that, you know, we, we got through it and we're coming out on the other side stronger than ever. Um, that being said, there are still some services that we do need to, to get back up and running. Online price guide, our autograph authentication submission flow, the Beckett Marketplace, which is basically a B2B Shopify for car dealers that manage their inventory. That one's incredibly painful. And even though it doesn't have the same breadth and reach of BGS card grading, for example. Having Shopify down when you have an online storefront, that's incredibly painful, obviously, right? And so we're just doing everything that we can to safely restore all those services as quickly as possible.

So we're here late October, towards the end. Do we have even a guesstimate on timing?

I'm always loath to put any tech estimates out there because I've been bitten before with that. But all that to say, I mean, as I just kind of replay all the remaining services that we have, I would love to see that by Thanksgiving. Now, if my tech team is listening to this, they might be kicking me under the table for all I know. But I know that there's still a lot of work to be done. But I am optimistic that it's going to be done within weeks. Within weeks. We're not talking months.

So one thing to share, you know, while we keep the, the base and Sage submissions paused, um, online, we, we are going to have a few shows where we will take selective, uh, submissions in person. You know, we really think about the importance of continuing that in-person, uh, nature of the hobby. You know, it is so much fun going to shows and negotiating with vendors and kind of having something physical in person, uh, in a world of AI and everything being online, right? And so we, we want to reward the customer that's making that effort to go out and have a fun in-person experience. So for some of the shows for the remainder of the year, we are going to take select, um, numbers of base submissions, uh, on a per-person basis. So I'd say just continue following Beckett on all the socials to see if we're coming to a show near you. Um, and if not, be on the lookout for our 2027 show calendar because we're starting to firm that up and we want to add a lot more destinations to the calendar and really just think about what role does Beckett play in the in-person experience and being everywhere that collectors are.

The state of grading can be summed up by we don't have enough Graders. That's true. But some of the insights around why— how are graders trained? How are they brought more into the hobby? What are they paid? What's it take to get the grading up to the amount that we need for all of the submissions? It's not an easy answer. But Colin and Nick both gave different answers to this question, but they both talked about ultimately the supply of graders needing to go up. And what each company's doing to tackle that.

You know, what I'm excited about is really just the path towards unlocking more capacity in the US and our European operations. We've been hiring a ton of people across the operation, really trying to kind of instill more operational discipline to make sure that as we scale, we're getting even tighter with each step of the operation. So it's a lot of the, you know, frankly, some of the boring blocking and tackling, more corporate-y stuff of just, adding processes, getting more comfortable with the continued growth in the trajectory that we're on?

Well, you know, I know a lot of great people who could be MBA graders, and it's really like you're grasping for straws trying to convince people to relocate to Oregon and take this big risk on a young company. You know, we're not that young. You know, MBA has been around for quite a while, but we just blew up at the beginning of this year and I think people definitely are convinced, like you said, we have the validity. And I think, you know, my story married to Mike's story really backs up everything. You know, it's like full circle as far as the history of grading. You know, he started PSA and, you know, I left PSA in February and to join him. So, you know, it's like the old and the new and, and vintage and ultra-modern is All right there. It's just a matter of getting guys who are willing to take the plunge and dedicate themselves to another grading company. You know, why do we need another grading company? So I know that grading today doesn't pay a grader as much as it did when it— 30 years ago, per se. So, but, but I think that's a good thing because it does indicate that there's room to grow.

It's just that you got to actually know the stuff, and there's more and more stuff to know every day when it comes to all the different kinds of cards that are being released by all these different publishers, different counterfeits, different alterations, recoloring, trimming. I mean, it's just grown rampant.

Grading trust starts with consistency. We've all seen the YouTube videos of people sending the exact same card to the same grading company and getting different grades. Ultimately, it's about standardized processes. Nick and I talked about this deeply with how NBA does things, the systems, the standards, and how ultimately we increase trust in grading.

We're adamant about getting it right every time. So what's different about our process is that we're actually, you know, triple, quadruple filtering this stuff and card's getting looked at by several, you know, beginner graders, several veteran graders before it ever goes into a slab. So our, uh, operational flow is actually insisting that we train new graders.

Can the infrastructure get to that point? Is it headed there? I mean, because the only way PSA's catching— the only way PSA's catching up is they have it turned off. You know, the only way Beckett's— so It's gonna come back on, and are we just gonna be right back where we started, you know, in 6 months?

I think all the grading companies, ourselves included, are in the same boat as far as we can't staff up fast enough. But at the same time, you don't want to cut corners, or you don't want to, you know, overhire, or you don't want to hire guys who don't know enough or have enough experience. So it's this careful dance where you're bringing on people, you're waiting a little while, you're making sure they work, you know, you're filtering out anything that doesn't work and then starting over again. So it's this rinse, wash, repeat cycle to try to scale something that is— it's easier to make it work at its core, but as, as you grow all these layers in the operation, it, it actually becomes harder to maintain consistency. And consistency is key in grading.

Yeah, we've seen those YouTube videos of the same car sent in 5 times.

Well, exactly. Well, I always say that grading should be like a game of telephone where you always get the answer right at the end. That's exactly what I'm talking about. So, you know, it's like you wanna, like if I teach one guy that this, you know, surface indent is always an 8, Or whatever, then, you know, 5 years from now, 30 more new graders from now, if I were to blind test the entire team, they should all get the same answer. It sounds easy enough in theory, but it, but it's hard to make happen.

And the biggest question is, are grading costs going to go up? Is Beckett going to increase their costs? Is PSA going to increase their costs? NBA, SGC, what is the fair cost of grading? Talk with both Nick and Collin about both of these things, and ultimately it might surprise you.

That's a great question. Right now for us, it's $15. That's our standard. You know, you can pay a higher service level to get the card back faster. We don't have a system in place with different tiers based off values. I'm not opposed to a system like that in the future, but we'll see, you know, where things go. Uh, there is an upcharge, kind of like PSA, but it's actually baked into the cake. So when you're signing up and submitting cards, you can pretty well guess, you know, like, hey, if I get a 10 on this card, I'm gonna be upcharged 3% of, you know, average medium value of a 10. We use VCP, vintagecardprices.com. That's kind of like our version of a card ladder that we're referencing to you know, gain value or, you know, capture those values and then compare that against the rest of the market?

I would love for it to be less, if I'm being honest, but I can't commit to pricing a year out from now. You know, I think about where, where were we 5 years ago? What were the different offerings out in the hobby? And I do think about how there are cards that might be gradable at $15, but if it's $50, is it really worth the time and effort and expense to do so. And I love the idea of having a price point for everyone in the hobby. So long-winded way of saying, I'd be happy if they're at $18, but would be even happier if we could get them lower.

So you don't see it, the

baseline, even if it's windows of opportunity to get in, you don't see that going to $40, $50, $60, the bottom?

Yeah, absolutely not for Beckett. I mean, I, yeah, I continue hammering home that point of, you know, the $18 to chase the Black Label, I do think is the best value. Uh, in all of grading, and I'm gonna do everything I can to preserve that.

We talked about the magazine a little bit at the National. I know when you're plugging holes like you are, I don't— you know, that feels like a long time ago, but it wasn't that long ago. Any updates there that are worth noting?

Not that I'm going to share here. We're continuing to, to think about how can we drastically overhaul and modernize the magazine. You know, if you think about the Beckett magazine that you and I grew up with, Um, for much of our collecting lives, you know, it's, it's part magazine, it's part phone book. And I think that phone book, uh, part is something that's worth revisiting. I, I go around the national and all these card shows, and I'm not seeing a lot of people citing the Beckett Price Guide as they're having negotiations with, uh, with vendors that they're talking to. And so it's interesting to think, okay, well, what purpose could the magazine serve in a collector's life these days? Is it more of a lifestyle magazine? Is it more to point towards kind of the new and upcoming cards being released? So all that to say, you know, we're going to overhaul it and modernize it, but nothing where we're sharing details yet.

I think we can all admit that grading is going to be a fluid situation. We don't have enough graders. We don't have enough infrastructure. Ultimately, all the grading companies are doing their best to tackle this. We can argue which side or the other. We don't have to like all of the answers that we do or don't get, but it's ultimately going to be different windows of opportunity to get your cards graded. You need to evaluate what you have. You need to know what the condition is and then make a decision because it is an economic decision. It makes a big difference whether you have a PSA 10, 9, 8, depending on the company, depending on the value tier being opened. All of those things, all of that information. Which we keep for you at thecollectornation.com. We appreciate you for listening. We're just trying to keep you informed on one of the biggest topics in the hobby today. We'll see you next time.