What to upgrade first for better sound quality?

If you want to eventually move to a MC cart. I would stay away from the lower priced ARC phono preamps. The PH8 or Ref Pnono 2 would be better choices.

I have a Fosgate Signature phono stage. This is a great sounding tube phone preamp that is highly adjustable. I am using a Benz Zebra wood LO MC cart with absolutely no problem.

Sorry about jumping into this topic late. I have an ASR Mini Basis Exclusive phono amp and it made my Thorens TD 145/Grado ME + mono sing, which is really saying something. Now I'm waiting for a low output Grado Statement Sonata 1 mono and will pair it with the ASR phono amp and TD 145. I do have a Herbies record mat on the TD 145 and that was crazy good from the very start. So I'm slowly turning the Thorens TD 145 into a Franken-thorens but I'm currently using the stock TP 16 tonearm.
But the overall point being that the ASR Mini Basis is a great phono stage for its price and it will support all cartridge types, even low output cartridges. It reaches up to 72 decibels of gain if I'm not mistaken.
I can hardly wait to receive my new Grado and being as such, posted a topic concerning cartridge alignment in the Tech Talk forum.

In my experience, the more money you spend, the better the results....given well respected name brands. As you get to the top of the heap, your money buys ever smaller increases in performance.

09-17-15: Stringreen
In my experience, the more money you spend, the better the results..

In my experience the more you think how to spend money for best value the better results you get no matter how much you spend.

Which component you should upgrade first is a hard question to answer because it depends upon several factors, including your assessment of the strenghts and weaknesses of each individual component, recognition of what you are trying to change, and finally your budget.

In general, I will say that if your goal is to make the most impactful change in your system the order would go like this, from most to least: speakers, analog front end (cartridge, tonearm, phono stage/SUT, turntable), preamp, digital front end and amplifier last.

I'm not saying that the components at the end of the list do not make a difference - they do. But complete character change of a system will only occur by replacing the final transducer or the source. IMO