Second Order Effects of CGC Grading Part 2

In previous blogs we have discussed there are two different ways that CGC is affecting today’s market for Vintage Rock Concert posters. 


One group of effects can be called “First Order Effects”, which are obvious to all onlookers. Specifically, these “First Order” effects include 1) increased media attention, 2) this increased media attention results in a huge increase in NEW collectors that can now collect with confidence. 3) Since this rise in demand is chasing the same small supply, values go up. 4) And since dealers can easily quote buy prices for CGC graded posters sight unseen, liquidity is increased. 5) Also, since third party grading is inherently about distinguishing differences in quality, there is a huge focus on quality.

Not so obvious, are many second order effects of third party CGC grading that will also effect today’s rapidly growing marketplace for these rare artworks. Today, we will examine one second order effect which is INCREASED LIQUIDITY.

Every single day, we receive numerous calls and inquiries from people all over the world that have posters that they wish to sell to us or consign in our auction. The question is always the same, what can you pay for XXXXXX poster. Unless the poster is a famous one of a kind rarity, our answer is always the same, “It depends vastly on the condition and making sure the poster is authentic. If you send us the poster we guarantee to have a cash offer to you in 24 hours. If you accept the offer, (which over 9 out of 10 do) we will send immediate payment. If you don’t wish to accept the offer, we will Fedex your poster back to you immediately.

While most people are agreeable to this format, there are some people that want a concrete on offer on the phone regardless of condition. In this case, the seller hangs up disappointed. The poster winds up back in the attic where it has resided for the last 20+ years. And we don’t get the opportunity to acquire a fresh piece of art that would be savored by our clientele.

If the poster was independently graded and authenticated by CGC, this would never happen. The seller would be able to tell us exactly what they had, and in what condition. And we would be able to make a strong cash offer, sight unseen. We would both “win” and a transaction would be quickly consummated that otherwise wouldn’t take place.

Let’s take another example. Say a collector is looking for a rare piece for many years that is quite expensive. He locates one for sale, but has never done business with the person that has it, and there are no solid guarantees provided in writing. The buyer has a wide range of prices he is willing to pay, based on condition. Because he has never done business with this seller before, he is reluctant to buy the poster because he is not confident about the accuracy of the seller’s grading.

If the poster had been third party authenticated and graded by CGC, this problem would obviously be eliminated. The buyer would know exactly what he is getting and he would not be relying on the seller’s opinion at all.

In conclusion, the introduction of independent third party grading into any collectibles market drastically increases the liquidity of what’s being collected because the number of transactions explodes upward due to the increased ease in both buying and selling. In short, everyone wins!