Why is PSA Grading So Expensive? A Breakdown of Costs
As the leading third-party grading service for trading cards, Professional Sports Authenticator (PSA) commands premium prices ranging from $100 to over $10,000 to grade a single card. But why is PSA grading so expensive?
In short, the combination of surging demand, an extremely rigorous authentication process, and the need to secure high-value assets drives up PSA‘s costs – which are passed onto consumers. Let‘s break it down in more detail.
Surging Submissions Lead to Higher Prices
Over the past decade, the trading card industry has exploded in popularity once again. Iconic cards of stars like Michael Jordan and Mickey Mantle are treating as investments by collectors. As PSA notes on its website:
"New submission levels have increased over 2000% in the past 12 months alone. Strong prices drive increases in supply needs."
With every collector and his mother racing to submit vintage cards to PSA for grading, demand has massively outpaced capability. This supply-demand imbalance allows PSA to charge higher premiums for its backlogged services.
In February 2021, PSA suspended some grading tiers in order to catch up. But 9 months later, wait times were still astronomical:
| Service Level | Turnaround Time |
|---|---|
| Value | 12+ months |
| Economy | 12+ months |
| Regular | 12+ months |
| Express | 6+ months |
These wait times show submission volumes are still far exceeding capacity – even at higher prices. Collectors are paying $100+ and waiting over a year per card! This shows just how in-demand PSA grades are.
Costly Manual Authentication of Every Card
While technology handles some imaging and data entry, PSA grading involves extensive manual checking by human experts. Graders intricately inspect each card under magnification for any alterations, flaws, or signs of counterfeiting – even using UV lights and microscope cameras where required.
This certification from flesh-and-blood graders is what builds market trust. But it‘s expensive due to requiring specialized skills and rigorous quality assurance. Per PSA:
"Properly training and developing internal grading skills requires years of experience. Our teams are considered the industry‘s gold standard."
That gold standard comes at a premium cost. For cards worth hundreds of thousands, a single improperly graded card could be a huge financial or reputational risk for PSA and their insurers. Checks and balances around authenticity claims are vital.
Securing Multi-Million Dollar Assets
Once graded, PSA slabs cards into protective, sonically sealed hard plastic cases featuring the iconic PSA label with key details, grade, and tamper-evident holder:
PSA Slabs from PSAcard.com
Cards encapsulated like this can be worth outrageous sums – frequently into the millions. As assets of such extreme value, their security, transport and insurance requires state-of-the-art protocols. PSA has reportedly invested "seven figures" on enhanced security alone across its multiple vault locations. These are not cheap warehouses!
Justifying The Costs with Added Value
Clearly, having cards graded by PSA is not a budget endeavor. But collectors willingly pay the high price because a PSA grade adds substantial value and liquidity by certifying authenticity and condition.
This value uplift usually offsets or even multiples the cost of PSA grading. As CardLines notes:
"Compared to raw cards, the PSA 10 sells for about 7x more. That’s a big difference! PSA 9s are worth 2x as much as the raw card."
When cards sell for exponentially more in their slabbed state, its worthwhile paying PSA‘s premium fees to unlock that added value. The cost is the price of liquidity.
Alternatives Exist for Budget Collectors
Not everyone can afford PSA though. For collectors on a budget, alternatives like SGC, HGA, and GMA offer cheaper grading options starting under $30 per card.
These lower-cost competitors have simpler service tiers and likely less rigorous authentication checking. After all, you get what you pay for. But for casual hobbyists or less valuable modern cards, they may represent an acceptable trade-off.
Of course, no other grader carries the prestige of a PSA certification. But short of selling a kidney, most newcomers can‘t gain entry to PSA‘s gilded gates today anyway! The low supply and incredible demand has sent prices skyrocketing for the industry leader to grade and protect top-tier trading cards.
