Are We Getting Too Slab-Happy? Inside the Race to Grade and Case Your Collectibles

^{Photo: Audio Media Grading}

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By the time it's over, everything in your home will be encapsulated in an acrylic "slab." Trust us, it's all much more valuable that way.

Before we dive into that dystopian future, a little history.

PCGS started grading coins back in 1986. PSA started grading sports cards back in 1991. CGC began its comic book grading service in 2000.

While the idea of grading lingered in such categories before those dates, it was the grading & encapsulation combination that propelled markets to new heights. The introduction of these services brought increased standardization, understanding of sales data, and - when done right - confidence and reliability to market stakeholders of all kinds.

Confidence in authenticity, inspired by the very sight of a slab,  meaningfully reduces barriers to transaction....even if that confidence is sometimes proven to be ill-conceived. It's not just the authentic "stamp of approval" that turns the flywheel faster, though.

It's vastly more difficult to understand the market for a category when each and every asset is treated as wholly unique, even if that is the case. Generally, as these markets have shown, participants have a much easier time transacting when they're able to compartmentalize assets into buckets, enabling a quicker understanding of how one asset is similar to or differs from another and how those differences impact value. As the most engaged constituents of a hobby know, there's plenty of nuance that lies beneath the surface of number grades, but by and large, the reduction in friction from encapsulated grading is meaningful.

Observers will have watched over the last four years as sealed video games vaulted from a little-known niche to mainstream headline fodder, and they'll certainly have noticed that this rise corresponded with the acceptance of Wata Games as the recognized grading provider in the space. Collectors, parent company to PSA, was one of the observers that took notice, acquiring Wata in 2021.

Similarly, VHS tapes have been an emerging graded category of note in the last 1-2 years. Beckett acquired VHS DNA in 2022 to bolster pursuits in that space.

‍The momentum in these categories has created a slabbing arms race of sorts, as participants new and old race to encapsulate just about anything they can get their hands on.

‍We're a little nervous: where does it end?! Just because we can doesn't mean we should! While everyone else is in a rush to apply that pearl of wisdom to artificial intelligence, we just want to prevent our household pets from ending up in a tamper-proof, UV resistant slab.

Some categories are, of course, more logical. In the last week alone, two entrants have staked their claim to the music space. Audio Media Grading, a joint venture between CAS Grading (more on them in a minute) and Steve Aoki, will preserve, authenticate, and grade vinyl, cassettes, CDs, and 8-tracks. Tuned In Grading, on the other hand, will focus exclusively on vinyl to start.

To the extent music fans longed for the sweet acrylic touch of a slab in the past, their choices were confined primarily to concert posters, which CGC began grading back in 2015, or ticket stubs. Grading's expanded reach into vinyl and other audio mediums makes sense, so long as collectors are okay with no longer listening to their treasures; alas, the prevention of consumption hasn't stopped comic book and video game collectors to date.

Other categories are perhaps more confounding. CAS accepts, authenticates, and encapsulates sealed iPhones and other Apple technologies, no doubt encouraged by the rising five-figure prices paid for unencapsulated first generation iPhones.

Yep, put that sealed cardboard box inside a sealed acrylic box with a number on it, and voila: monetary magic!

Confidence in authenticity is key. Even the longest-tenured, most well-respected graders in their categories sometimes get it wrong. The same can be said about those who are entrusted to verify the integrity of a seal in other products, like trading card boxes.

So, without added context about expertise and points of verification, it's hard to put much stock in something like a graded, sealed iPhone. Does the grader employ a former Apple employee or manufacturer or even retail employee who can ascertain authenticity and the integrity of a seal to a degree of near infallibility? What's the secret sauce that truly adds value, other than adding an acrylic case?

At the outset of grading in a category - now that grading is an accepted and desired practice - a pop in values for graded product is often likely, but it may not last. For better or for worse, the increased prevalence of grading will eventually lead to two outcomes: 1) the credibility of a service's authentication and/or grading capabilities will be revealed, with a commensurate change in asset values, and 2) the true rarity of the asset in question will be discovered as graded populations become increasingly clear.Those things typically take awhile to unfold.

In the meantime, if you need us, we'll be slapping a tastefully-labeled acrylic case on just about everything we own before our next yard sale. Our "near-mint" cast iron pan was ultimately held back by a dinged handle, but it received a great surface grade. Terrible for cooking food, but outstanding for resale value.

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