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<p>[QUOTE=&quot;NorthKorea, post: 2519024, member: 29643&quot;]Not really true... if they hired too many graders, the backlog might still occur if it&#039;s from a different part of their supply model (receiving or packaging, for example). If I recall, PCGS charges their fees after grading has finished, shipping as soon as funds clear. By contrast, ANACS seems to charge fees as soon as they receive items, then start grading after funds clear. It might not matter to most individuals, but from a cash-flow model, I&#039;m sure businesses must prefer the extra month or so where the money hasn&#039;t been collected for grading fees in the non-ANACS model.</p><p><br /></p><p>Back to the point of hiring too many graders:</p><p><br /></p><p>Say ANACS originally had seven graders. In response to a large number of on-site (coin show) submissions, they contract an additional eight graders to bring their staff up to 15. If they had to train some of the new graders, they might actually see a slow-down in turnaround time relative to what older customers were accustomed to.</p><p><br /></p><p>Now, with 15 graders on staff, someone in finance points out that productivity hasn&#039;t been maximized, and they need to increase revenue to offset the salaries of the new graders. Assuming the salaries are now sunk cost, someone in marketing decides to attack the issue by increasing volume through highly discounted specials.</p><p><br /></p><p>The specials result in more submissions than expected, so they decide to hire/train another 10 graders. Now, with 25 graders on salary, the determination is made that they need to either increase current submissions by 50% at current prices or double submissions at a lower special price. Marketing, believing that market share will lead to sustained volume (something taught in virtually every marketing degree program, while few point out that this only works in a market share leading model), opts for the version that results in more new customers.</p><p><br /></p><p>This continual discounting of their product eventually leads to a perception of the company as a &quot;discount grader.&quot; With no reason to submit high value items to ANACS, eventually, the market for marginal low-value coins dries up, and ANACS must begin to release graders from their contracts. The better graders accept release and move on to NGC/PCGS. The lower quality graders refuse to leave, and hire attorneys to enforce their contracts.</p><p><br /></p><p>As a net result, NGC/PCGS benefit from ANACS being the equivalent of a management training program. They&#039;re now able to pay higher starting salaries for better trained graders, since they no longer need to train them or have a &quot;learning curve&quot; break in period. ANACS continues to hire new graders, and the model becomes a perpetual merry-go-round.</p><p><br /></p><p>Again, all of that is speculation, based upon my observations of similar businesses in non-similar business segments.[/QUOTE]</p><p><br /></p>

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