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 Replies: 13 / Views: 7,617 |
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Pillar of the Community
United States
1374 Posts |
PCGS charges Collector's Club members $12 per coin to bulk submit (at least 100 coins, no more than 5 different PCGS numbers) coins for grading. That's a $4 discount from the cost of the regular non-bulk modern grading fee of $16. A First Strike label (assuming the coins are eligible) costs the normal, additional $18. What dealers pay for bulk submission is not advertised (AFAIK is negotiated with each dealer depending upon total volume of coins submitted). Since proof ATB Quarter sets come with 5 different PCGS numbered coins, submitting 20 sets meets the PCGS requirement for bulk submission by a CC member. So, it's convenient to use 2019 ATB clad proof sets to look at CC member bulk submission. Plus, you can easily see what these sets sell for on ebay. For a CC member, the cost would look like this  CC members can't request a minimum grade of 70 (I believe dealers can?). So, assume a minimum grade of 69 is requested and all of the coins submitted end up being graded as either 69 or 70. BTW if some didn't, then as long as at least 60% of the coins do make the grade, then you would pay no grading fee for the non-slabbed coins. If less than 60% make the grade, then you'd pay $5 each for the non-slabbed coins. Checking recent ebay sales of PCGS graded, First Strike labelled 2019 ATB clad proof sets show an average sales price of a 70 graded set to be around $160 and an average price of a 69 graded set to be around $50 shipped. As has been discussed in other threads, because not all coins submitted to PCGS for grading end up being slabbed, it is hard to tell the % of coins submitted to PCGS that do get a 70 grade. To make things easy, I'll assume that for modern proof coins it's 50%. Then a CC member would be able to assemble 10 sets graded as 70 and 10 graded as 69. This would result in a potential average ebay sales price of $105 per set. For the sake of argument, let's assume an even higher average price of $120 per set. With ebay fees, PayPal fees, packaging and shipping costs subtracted, a CC member might optimistically net around $110 for a $60 or so loss per set. Even if all 20 sets graded as 70, a CC member would still end up losing money trying to flip these sets  Yet, dealers can make a profit at this. So, just how much less do they pay PCGS for bulk submission grading and labelling. It has to be significantly less than the deal offered to CC members. My guess is that dealers get at least a 50% discount from the CC member price. Any one else have a guess (or know for sure)  |
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Pillar of the Community
 United States
8938 Posts |
I'm going to the LCS today. He's always been honest and givin the same discounted rates on submissions to me that he gets from them. I'll ask him then.
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Pillar of the Community
Canada
5239 Posts |
Interesting analysis. It is cheaper to buy the sets from ebay than to do the slabbing yourself. It is cheaper to let someone else lose money! |
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Pillar of the Community
Canada
5239 Posts |
$18 per coin to put a cheap paper label on! Say it ain't so!
Forgive me for being astounded.
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Pillar of the Community
 United States
1374 Posts |
Quote:
$18 per coin to put a cheap paper label on! Say it ain't so!  It does seem expensive, especially since First Strike is a figment of PCGS's imagination, but I guess there are enough label collectors out there that demand this label to make paying for it worthwhile to the sellers who get it. Quote:
It is cheaper to let someone else lose money! Not so sure the dealers who sell the 69/70 moderns are losing money. If they were, then you'd think you'd see a turnover in the dealers trying it, but there are a few who have done it day-in and day-out for quite some time. I suspect they've figured out how to make money doing it, probably by negotiating severely reduced PCGS fees for very high volumes of coins. Edited by BadDog
03/09/2019 3:26 pm
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Pillar of the Community
United States
8938 Posts |
He says yes they do make money off of it. Which is why he discounts submitters through him
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Bedrock of the Community
13014 Posts |
Quote:
CC members can't request a minimum grade of 70 (I believe dealers can?). The big boys certainly can, but I am not sure that CC members can't now. Their bulk page hasn't been updated in years and since the last update something with the way 70s are dealt with have changed. For example before you couldn't request 70s trying to cross 70s but now you can. Someone would need to call and talk to them to find out for sure. Quote:
Yet, dealers can make a profit at this. So, just how much less do they pay PCGS for bulk submission grading and labelling. It has to be significantly less than the deal offered to CC members. My guess is that dealers get at least a 50% discount from the CC member price. Any one else have a guess (or know for sure) You can kind of guess at it if you really want to dig through the PCGS financial reports. The big big big boys are probably somewhere around 6-8 dollars for bulk and the medium are probably like 10. While the authorized dealers do have discounted rates in general, the run of the mill LCS that rarely bulk submits if ever is probably paying basically the same as the CC members. Don't forget the big big spenders get discounts on the product from the mint as well with the bulk purchase programs. When you're spending the type of money some of these guys do they get lower prices from everyone including lower ebay fees. |
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Pillar of the Community
United States
1374 Posts |
Quote:
Don't forget the big big spenders get discounts on the product from the mint as well with the bulk purchase programs. Yes, they do. The published discounts for numismatic items are Quote:
Discount tiers are as follows:
Tier 1: Net revenue from $10,000 up to $50,000 earn a 3 percent discount
Tier 2: Net revenue from $50,001 up to $250,000 earn a 4 percent discount
Tier 3: Net revenue from $250,001 up to $1 million earn a 4.5 percent discount
Tier 4: Net revenue more than $1 million earn a 5 percent discount where net revenue is revenue to the Mint (sales-returns). I suppose there could be higher unpublished discounts, but a FOIA request could probably uncover those, so there may not be. A 5% discount for the scenario I proposed would only be 80c per set. Not really significant to the scenario. The way these bulk dealers must be making their profits is by getting PCGS to cut that $30 per coin grading/labelling fee down by around half. Maybe they just get First Strike labelling for free. That would do it as well.  that LCS shops aren't getting nearly the PCGS discounts that the bulk/volume submitters are getting, but it's still nice that GrapeCollects has one that does pass along whatever discount they're getting to the customer, rather than upping their own profit margin  Edited by BadDog
03/09/2019 6:44 pm
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Bedrock of the Community
13014 Posts |
Quote:
Maybe they just get First Strike labelling for free. Either free or a nominal fee. I would guess free for the standard and a nominal fee for the exclusive labels/cores |
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Pillar of the Community
Canada
5239 Posts |
@badDog, yes of course you are right. I was being ironic. The dealers cannot be losing money or they would not do this. Obviously their costs are substantially less than those of the average person.
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Bedrock of the Community
United States
17884 Posts |
One other thing not considered in the original scenario, you are assuming sending in the coins as random set purchases (buy 20 sets and send them in) the bulk dealer most likely also prescreen the coins and only send in the ones they feel fairly confident will make the 70 grade. So the ratio of 70 to 69 assumed is actually probably higher. For example the 2019 W cents. I have seen a moderate number of complaints about low quality or problem pieces on these, but recently (it may have changed by now) the 70/69 ratio was running at 95% 70's. That has to be the result of prescreening.
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Bedrock of the Community
13014 Posts |
Quote:
One other thing not considered in the original scenario, you are assuming sending in the coins as random set purchases (buy 20 sets and send them in) the bulk dealer most likely also prescreen the coins and only send in the ones they feel fairly confident will make the 70 grade. So the ratio of 70 to 69 assumed is actually probably higher. For example the 2019 W cents. I have seen a moderate number of complaints about low quality or problem pieces on these, but recently (it may have changed by now) the 70/69 ratio was running at 95% 70's. That has to be the result of prescreening. The big boys don't its not worth their time when they're submitting by the pallet for products. ASE monster boxes go in still strapped. Proof sets will go by the pallet etc. A small bulk submitter might take the time, but the big boys everything goes in still sealed from the mint. Now the one exception may be something like the Palladium coin where they could only get so many, but even then for the biggest ones probably didn't. There's only so many hours in the day and prescreening all day long is more expensive than just submitting and having it come back raw. For the W cent that's really just a result of the product itself. Basically no LCS is submitting modern proof sets, some collectors will and some flippers will which is where the 69s may come from (though even they can request 70s only for being holdered) and they would be the ones prescreening. The rest the get submitted will come from the big boys. The 10 or 20k if not more one big boy submits in one submission wipes out a lot of collector prescreened submissions in the population percentages. Remember some of the biggest submiters are also the mint distributors for bullion and the others are huge sellers. They don't have to sell everything they get themselves and can easily sell some to other dealers that want them. |
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Pillar of the Community
United States
1374 Posts |
Quote:
...the bulk dealer most likely also prescreen the coins and only send in the ones they feel fairly confident will make the 70 grade. It wouldn't matter if they did UNLESS they're still getting a significant discount on the grading/labelling fees. If the scenario I indicated, even if all 20 sets graded as 70s, you'd still lose money if you had to pay the CC member listed grading/labelling fees. The point of the scenario is try and figure out the discount that the bulk submitters are getting from PCGS. Not whether or not the coins submitted get a particular grade. Edited by BadDog
03/11/2019 1:52 pm
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Pillar of the Community
United States
9792 Posts |
basebal21 hit it out of the park again with his answer. I'd like to add, there are deals made with the TPG's and large submitters to only slab coins above a set grade level MS-69 or MS70 and everything else below their standards is returned with a small charge maybe as low as $1-2/coin. At that price it would have to be a huge submission - likely well over 10K coins at a time, prices vary with types of coins, MS/PR. mixed or all the same, dates/minmarks/composition/type. My experience is from the late 1990's and early 2000's, when I was on the coin show circuit and dealing not collecting. I knew of dealers back then with $50K+/month invoices from PCGS, NGC, ANACS, ICG & SEGS. PCGS, NGC were getting the lions share of grading even back then. "Buy the Book Before You Buy the Coin" - Aaron R. Feldman - "And read it" - Me 2013! ANA Life Member #3288 in good standing since 1981, ANS, Early American Coppers Member (EAC), Colonial Coin Collectors Club member (C4), Conder Token Collector Club member (CTCC), Civil War Token Society (CWTS) member, Liberty Seated Collectors Club (LSCC) & Numismatic Bibliomania Society member (NBS), USMex, Member in good standing, 2¢ variety collector. See my want page: http://goccf.com/t/140440 |
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Posted 03/09/2019 1:22 pm
