Disrupting the TPG World

I asked this question in another thread, but did not get an answer.

OK... some have mentioned that submissions are down at the TPG's obviously because there is a limit to how many older coins can be submitted. Since submission are down, revenue is down.

The question is if a new TPG offers more services, grades more consistantly, most importantly graded more conservativley, and then actually gained trust and respect from the collecting community, how would this affect prices, population reports, and the overall market for coins? I don't want to get into modern coins in this discussion because I don't think that area of the market would change drastically.

Everyone knows the population reports are already scewed due to multiple submissins and cross grading, but if a more respected service started getting many crossovers this would make the situation even worse with the pop reports.

I think the biggest stirring of the pot would be more conservative grading standards and how this could effect prices of coins across the board.

Obviously like I said this "new" would have to gain respect and trust for this to happen, but this is not out of the question. This is possible....

For instance lets say this new TPG is DGS, and for a given coin, or type of coin they become the new standard. Say for a MS64 people recognize that for this coin or type most MS64s are as nice or nicer than a PCGS MS65. This could really stir things up.....

Your opinions please......

 

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don't hold your breathe. new TPG's are generally not respected.

 

Anyone who tries to straighten out the current mess by tightening up the standards won't get many submissions because it seems everyone in the market today is only interested in how much money they can make from coins. It's unlikely someone new would see their coins sell for a premium without having a restricted registry following.
Anyone who grades coins like they are supposed to be graded will have them cracked out as soon as they hit the market ala the crackout game.

Ain't gonna happen any time soon. The only thing that will disrupt the TPG world is education. Once collectors understand what the real story is, they will no longer swallow the TPG hype. When someone tells them that it's OK for the TPG's to be disingenuous in the name of profit, they will walk away.

 

The situation is hypothetical.....

Sometimes it benefits enquiring minds to ask "what if"....

 

The most likely result of this would be that submissions to PCGS would jump as people sent these in to cross over to MS-65. A new company that graded everything a point more conservatively than PCGS would not get a lot of business, IMO.

Why would people spend money to have a startup company grade their coin when they knew that the recognized market leader would grade it a point higher?

Your question is intriguing, but I don't see it ever happening. As long as people are willing to pay more for a PCGS holder, then coins that will obviously crossover and gain a point will end up in a PCGS holder.

 

I completely understand your logic, however once the cat is out of the bag one of two things have to happen....

People crack coins out of the holder of the new TPG knowing they will get an upgrade through another service, or premiums will be paid for the coins in the new TPG's holder. Furthermore, if people constantly believe or actually do get uprages.... pricing will have to change because people will bid up the prices on the new TPG's coins.

Something will have to happen....

 

I'll have to agree with Danr here. The major players have loyal followers...

 

Right now DGS is actually getting a lot of submissions....

In this stage of the game nobody is paying premiums, and actually you can get their coins at a discount. I am not claiming this hypothetical situation is a fact, but I do think at the least they are on par with the two majors... Also their prices are cheaper, they have a free visual pop report, and you can have your coins graded and signed by respected numismatists such as Rick Snow... for $20 plus shipping. If you have your indian cent graded by him regardless of the holder it is pretty much the most respected opinion out there.

 

I'm actually pulling for DGS to succeed. I think they have come up with some very good innovations.

That said, if they consistently grade coins a point lower than PCGS, I think you will see a lot of coins being sent in for crossover.

 

I am as well.

Quality competition for the top TPGs can only mean good things for collectors, and someone needs to shake up PCGS a little so they start focusing on customer satisfaction a little more and perhaps lower their fees.

 

disrupting..........................

of course if they warrant a CAC sticker...........................the respect may come quickly!!

 

Personally I am very interested in how perspectives could change if they grade to a more strict standard.

It makes sense that in the current market people would play the crack out game for a while, but this could only last for so long.... As prices regrouped, which would be market controlled, in the end someone would end up losing market share, and I doubt it would be to the service that grades more acurately. After a while it would be pointless to play the crackout game because premiums would already start being paid for coins in the new holder.

In the end it would all come back down to the coin and not the holder, but it could mean bad things for other TPG's.

Also I mentioned in other threads that PCGS and NGC may likely have to have an answer for the visual population report. Also if submission are down a good way for them to increase revenue, and keep market share would be for them to have a reholder campain at a nominal fee. By doing this they too could take pictures of coins, and offer a visual population report. This would also be a good way to get the population reports back in check as they could slowly phase out the old numbers. At the very least this would be a huge benefit to the coin community because we all know know the numbers are completely out of whack. With the advent of computer imaging software it may be possible to use a visual population report as a way from keeping population reports from being scewed by resubmissions and cross overs. Maybe not so much the cross overs as there would have to be cooperation between the various TPG's.

 

In theory, a really good visual population report could intercept coins being resubmitted, at least to the same grader.

"Dear submitter: It appears that this coin was previously submitted to us on [date] at which point we assigned a grade of MS-00. In order to uphold our high standards for consistency we are returning this coin to you with the same grade previously assigned."

 

While part of me wants to make sure that all of you brought your blankets so you can get a nice nap after the milk and cookies......

It CAN happen. In the sports card hobby, there is a relatively new grading company called SGC which has gained the respect of a lot of hobbyists. In fact, if you have a sought-after card that is in the equivalent grade of MS-65+, a lot of people would choose SGC to grade it.

That is all. Just an FYI. Now everyone, put your heads down......

 

Do you work for DGS or DLRC? Can you point to where you get your info that backs this up?

Thanks

Speedy

 

for reasons discussed in another thread the incumbents have a massive advantage. Danr is spot on

 

Do you read before you post? They have a visual population report.

They also have news releases et cetera....

 

I can make news releases all day long (and get them printed) that says that my hosting company is #1 in town, is growing by 100's everyday etc, etc....that doesn't make it a fact. What I want to see is some numbers....some facts to back up your post.
Since day one you have been gun-ho DGS....it just made me think that maybe you worked for them. Of course there wouldn't be any problem if you did....just wondering.

Speedy

 

A very interesting thread...and I thank you all for the candid remarks. First, let me say that we are not interested in displacing PCGS or NGC in the marketplace. I am very fond of both companies for different reasons, and at David Lawrence, we a major marketmakers of their certified coins. Those guys are much bigger than us, and grade more coins in a single day than we grade in a month.

For us DGS is all about providing a solid alternative for collectors looking to submit coins directly at a low cost, without sacrificing grading quality. DGS is a boutique operation with a small staff. Yes, DGS does grade coins for DLRC, but we note these coins with a 'D' on the obverse serial number to make sure everyone knows which coins these are. We are unashamed of the practice becuase I grew up helping my father grade coins for his mail order list 30 years ago, in the pre-TPG era. I am applying those grading standards he taught me and we're really this new business. Are we more conservative than PCGS or NGC? Yes and no. We do NOT grade based on their standard. We grade on our own standard. We simply examine each coin and render our own grade. We certianly don't ask ourselves, "what would PCGS grade this, and subtract a point." No way. If collectors like our grading, they will buy the coin. Some will crack them out. We're happy either way. The other aspect is DLRC will make a market in DGS coins. Not just becuase we own the company. But rather, becuase, we like our grading. And we feel confident that if we grade a coin AU, it's worth AU money...

Are we getting a lot of submissions???? I can say this. We're getting enough that we have not had a single day since May 1 when we didn't have 100 coins in the queue. As of right now we've completed the grading on 1,904 coins with 280 in the hopper. Of those, approximately 350 were submitted by DLRC (around 15%).

Lastly, we do think we've struck a positive chord with the collectors that have tried us. We're constantly thinking of new ways to improve the service (like the Visual Pop Report).

Sincerely,
John Feigenbaum