Writer Wars Round 3: Grappling with Grading by J.J. Maxwell
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Grappling with Grading
I’m going to set the expectation here and tell you all upfront this is NOT a guide that can teach you how to grade comics. Trust me if you knew my personal comic grading skills then you’d know I’m probably still around Padawan level. No, instead I’m going to focus on something I think is talked about a little less than it should be. So you can think of this article as a guide for the strategy of the WHAT, the WHY and the WHEN of getting your comics graded.
An Intro on the Basics
Now I know there is a good size segment of the collecting community how will never grade their comics and they don’t even like the concept. That’s fine, in fact I once believed the same, but I’ll be frank if that is your position then I hope you enjoy the memes because this is going to be a very boring & pointless article to read otherwise.
For those that do care you likely all know the 3 different companies of CGC, CBCS, and PGX. Now because I’m going to try and keep it relatively brief I won’t go into the whole history and origins of grading right now. Nor am I going to go into a lot of differences between the 3 companies. There are even other alternative companies jumping into comic grading though I admittedly know little about them.
So at least for the purposes of this article most of the detail and data you get below will primarily apply to CGC. I must also say as a disclaimer that I’m not trying to endorse them over the other companies so much as give you the straight facts and data and they are the best company with readily available census & sales data.
What is grading all about?
The answer is a simple one: More money. Why else would we send or give our most precious books to a bunch a random strangers so harshly pick through them if there wasn’t some reward at the end of the tunnel? The fact is undeniable that a highly graded book is worth more upon resell than a raw book. Most of that comes down to condition. Someone at a grading has given your book a number that tells others the condition of it. It’s official in writing and everything. That is the grade (like it or not) and it doesn’t change unless said book is damaged. There is also a mondo cool slabbed case that protects your book (and to some this is worth the cost alone).
A raw book on the other hand is more random. While the seller may tell you the condition there’s nothing there to really back that up, no objective party has stated its condition. This makes it harder to assign a true value to the book and you take a risk on raw books because that raw book that the seller says is “NM” could be a 9.4 or 9.8 or any number of grades. That could be a huge different in the potential value of the raw book. To illustrate this point let’s look at a couple weeks of sales of big modern key variant… The Immortal Hulk #2 1:25 Zaffino Variant.
Between the last 3 weeks of April there were 6 sales of raw books with that were considered high grade or NM. All these sold between $250-300. But now look at the sales for graded copies in the same time period. 4 CGC sales total, a 9.4 for $225, 9.6 for $285, 9.8 for $819, and a 9.8 for $900! Now there is little chance all those raw books are actually 9.8 copies. In fact some had noticeable defects that likely prevented that. There is nearly a $600 gap between the 9.4 and 9.8 grade as well. This means it is a huge risk/reward venture buying this book raw expecting 9.8 grade money.
In fact using just these sales figures & add in the cost of grading (about $20-25 for a modern) and those who bought a raw copy and missed with a 9.4 could stand to lose around $100 in the deal. So clearly you want a copy that is 9.8 and the highest grade on the census to make the most money. Now I’m going to blow that whole thing up and show you when having a 9.8 matters most and when you can still make great buys with lower grades so stick with me here as venture into the realm of more math and census data…
Top of the Census?
So you saw that huge price disparity between the 9.8 and 9.6 grades above? The number and type of defects between a 9.6 copy and a 9.8 copy of a book are miniscule but the value difference can be huge. Why though? Well let’s take a quick glance at the CGC census for another hot modern book. Batgirl #23 B Variant with the sweet Josh Middleton cover…
The top census grade is circled in orange and it is 9.8 with 525 copies. Let me say again 525 copies! This means there are literally 5 times as many copies of the top grade than there all other grades combined. Therefore it’s easy to see why the guy trying to this book with a lesser graded is going to get pennies on the dollar compared to those selling the top 9.8 grade.
While those are some staggering figures that is an example of a modern book that is not really rare. Let’s take another look at a modern book that was some more rarity to it. We can circle back to the Immortal Hulk #2 1:25 Variant. Here’s the CGC for that…
The top grade of 9.8 still the most copies at 26 but look right below. There are 24 9.6 copies. Remember the price disparity above of the 9.8 ($819) to the 9.6 ($285)? That’s a difference of $550 but the question is does that make the 9.6 copy undervalued? It’s a simple truth that all of those 9.8 will not come to market and at some point the supply of said copies will dry up and if you are a collector seeking this grade you’ll look at 2nd highest census score.
Plus the 9.8 copies are accelerating into unaffordable territory for many collectors and they look to a lesser expensive buy in. Both of these factors could lead to an eventual higher demand for 9.6 copies of this book and as that demand increases so does the value. So if you have that 9.6 copy that is seemingly worth $550 less now, with a bit luck and time that gap closes some and you could see a solid return on it. Which brings me to my next point…
Return on Investment
It goes without saying how much you make on a sale is highly dependent on how much you put into the book in the first place. CBSI author (and original Writer Wars winner) Brandon Susens breaks down such numbers with you in his excellent “Covering the Spread” article. But what about those books that aren’t top grades or even close. Are they still worth the price of grading? Does it help or harm your profit margin on that book?
Unfortunately the answer to that question lies in a murky gray area that is dependent on the book and the situation. However you can take comfort in the fact there is 2 big hints and those hints revolve around the desirability (or demand) and age of the book. Typically the older and hotter the book the less dependent on condition your sale will be. You can still see a very solid return on a book that may be several grade points from the top of census.
This table is the monthly progressive top investment performers report from GPA for the bronze age. It is ranked by the column I circled in red which is the return on investment (ROI). Now granted this is one report, using a formula and focusing solely on graded comics but it’s easy to see a trend of the hot comics last month being hot keys like Special Marvel Edition #15 & various Eternals comics. Note the grades of the top 5 here ranked by ROI. Not a single one above 9.0 grade. Let’s focus specifically on Special Marvel Edition #15. Here’s the census…
Without going into too many annoying details both provide the info that tell you a quick glance that if you jumped in at the right time and bought a 8.0 copy say 6 months ago then you’d have a nice little return on that investment despite the fact that you are far from the top census copy. Now yes it’s obvious the 9.8 copies will sell for far more money but considering the age of the book it will be incredibly difficult to find a 9.8 copy raw and even if you did you’d pay top dollar.. Also consider the fact that you put a fraction of that money into a 8.0 copy and still came out with a return over 20% that’s pretty freakin’ good.
Okay Harley has a point because that’s a bronze age book that saw demand skyrocket thanks to movie news. Now let’s play a bit of a longer hold with an older book. We’ll look at another awesome key with my favorite Neal Adams’ cover, Batman #227. Here’s how the census for that book currently shapes up…
As you can see our imaginary 7.0 CGC copy falls about in the middle of the census roughly. It would be a nice get for a comic of this popularity and age. Now let’s check out some sales data charts.
So as you can see in the chart the sales data ticks up in value at a steady pace as the demand (number of sold copies) increases. In 2015 there were 8 sales of a 7.0 CGC copy with an average price around $260. We’ll imagine for that we bought our copy at this time for $255. In 2018 there were 11 sales of 7.0 CGC copies with an average price of about $413. We’ll say we got a nice win and sold in 2018 for $440. That means our roughly 3 year hold yielded a 72.5% return. Which is nothing to sneeze at.
You may be still asking what’s the point? Given that I ramble when I write I wouldn’t blame you either. Primarily this article is pulled from my personal buying and selling experiences and it may be none of this information did you any good.
Still the points I was trying to illustrate are that while having a 9.8 copy of book matters especially for many hot modern books and it will always net you the highest sale you should not overlook lower graded books. Don’t go into debt to invest in a 9.8 copy. After all investing in & flipping a few lower grade books were you see more modest yet still solid returns can be used to eventually get you that high grade grail key you always wanted.
The post credits scene
So it goes without saying that several other factors go into our discussion above. Chief among them are knowing when to sell off your books and to that point I wanted to mention that comic grading is a slow process. Not only is there the obvious slow down of submitting and shipping but several concerns about the grading companies themselves such turn around times and quality control must be considered before you submit your books. The market can be a bit of a roller coaster so if you believe in a book your specing on and considering grading don’t wait too long or you may find the peak time to sell has passed you by. So if it comes down to selling a raw book where you make money vs waiting on grading where you could miss out you may consider selling the raw first.
Remember the book is only worth what someone will pay you for it. The market supports all kind of buyers looking for many books at all different grades for the most part. Don’t just overlook or underestimate this fact.
I wanted to also take a moment to thank the CBSI team for allowing me this opportunity to write this piece and for the community to taking the time to read it. Please let me know what I messed up and also relate your experience grading your books below. Again it means alot to me to have a group that not only allows my participation like this but also shows genuine concern. Thank you all.