New Costco golf balll

[jeffc]

Profit margins on individual items are low? Really? Having sold products to Costco, and knowing their retail prices, I beg to differ...

costco's profit margins are maximum 15%.

[big mac]

costco's profit margins are maximum 15%.

Yikes---If you believe that Costco only works on a 15% profit margin-----then it is time to wake up and smell the roses. There is no way they could ever stay in business at that rate. IMHO

[jeffc]

Yikes---If you believe that Costco only works on a 15% profit margin-----then it is time to wake up and smell the roses. There is no way they could ever stay in business at that rate. IMHO

I love roses.

They make their $ selling memberships. My neighbour is a buyer for them and it's a well known (or I guess not so well known in this case) fact.

http://www.forbes.com/sites/greatspe.../#2cbb56353d42



Great Speculations
Buys, holds, and hopes

Opinions expressed by Forbes Contributors are their own.
Trefis TeamTrefis Team, Contributor
The largest warehouse club in the U.S., Costco, has seen its gross margins fluctuate around the 10.6% mark over the last four-five years. From 10.87% in 2010, the company’s gross margins fell to 10.59% in 2011 and 10.57% in 2012. In 2013, the margins recovered to 10.64% and they further increased to 10.77% in 2014. While the historical change in margins has been a little wayward, we expect margins to decline slowly going forward through to the end of our forecast period. We forecast a negative 0.02% change in Costco’s gross margins every year, which will take down the figure to 10.63% over the next five-six years.

While most supermarkets and department stores markup their goods by more than 25%, Costco keeps its markups low at 15%, that allows it to offer products at lower prices than its competitors.

[golfisforfun]

I have seen goods sold to them in their stores at more than 2 times the price they paid...

I love roses.

They make their $ selling memberships. My neighbour is a buyer for them and it's a well known (or I guess not so well known in this case) fact.

http://www.forbes.com/sites/greatspe.../#2cbb56353d42



Great Speculations
Buys, holds, and hopes

Opinions expressed by Forbes Contributors are their own.
Trefis TeamTrefis Team, Contributor
The largest warehouse club in the U.S., Costco, has seen its gross margins fluctuate around the 10.6% mark over the last four-five years. From 10.87% in 2010, the company’s gross margins fell to 10.59% in 2011 and 10.57% in 2012. In 2013, the margins recovered to 10.64% and they further increased to 10.77% in 2014. While the historical change in margins has been a little wayward, we expect margins to decline slowly going forward through to the end of our forecast period. We forecast a negative 0.02% change in Costco’s gross margins every year, which will take down the figure to 10.63% over the next five-six years.

While most supermarkets and department stores markup their goods by more than 25%, Costco keeps its markups low at 15%, that allows it to offer products at lower prices than its competitors.

[jeffc]

I have seen goods sold to them in their stores at more than 2 times the price they paid...

that's not their MO. They look to lower prices whenever they can. Not saying it's never happened but that would be a very rare occasion. My neighbour says they are not allowed to sell for anything over 15% margin. It's a different business model than the rest of retail. They make $2.5B on memberships alone which is mostly profit.

[john8888]

http://www.wsj.com/articles/the-most...tco-1484832756

“We don’t have a certain amount that we promise to deliver to Costco,” said Shim Kwang-Suk, executive director at Nassau’s ball plant in Korea. “We produce other products first and deliver to Costco if we have products left.”

[leftylucas]

These sold out at Costco because they basically sold them at cost. You can't compare the Costco business model with a regular retail business like GolfTown.

Costco has stated that virtually all of their profit comes from memberships (which have little to no cost). Profit margins on individual products are low (especially on their "house" brand stuff), they do not stock a lot of varieties of the same product and most items are sold in bulk. They do not have the same overhead as regular retail stores - it is a warehouse rather than a store and they do not spend much on advertising or marketing. The value proposition for consumers is that the savings on purchases are greater than the membership price, and it usually is because the normal profit margins that Costco is working with can be substantial. But if you want choices, options, advice, service or the ability to "sample" something first - you don't go to Costco.

FYI the Nassau Quattro sells for around CDN$45-$50/dozen in the UK, compared to the Titleist Pro V which goes for CDN$60-$65/dozen. So if GolfTown were to stock it, it would probably be need to be priced for at least $30/dozen as a discount, urethane 4-piece ball for a brand that has zero recognition in North America. Not sure they would be flying out the doors at that price. I could see Costco making a deal to bring back the Kirkland Signature at $39.95 for 2 dozen though. Time will tell.

My point was that Golf Town should simply investigate, I did not do a complete business model evaluation but whatever. They would have a great market even if the profit margin was not great

[boylebj]

All to say that a good ball can be manufactured and sold at a reasonable price. Further K-Sig ball production could jeopardize sales of the big ball sellers....can't have that. Nassau sales to these companies could be jeopardized to if they sell to Costco (if they intend on keeping price low on ball).
Again, another example of Golf equipment being way overpriced (ProV, Chrome Soft, etc). With an industry that is losing participants of the sport, their not helping by gouging the remaining members.
I guess you really can't fault the companies. As long as people still continue to pay their prices, the companies will continue to sell their overpriced equipment.

[Gobble_It]

All to say that a good ball can be manufactured and sold at a reasonable price. Further K-Sig ball production could jeopardize sales of the big ball sellers....can't have that. Nassau sales to these companies could be jeopardized to if they sell to Costco (if they intend on keeping price low on ball).
Again, another example of Golf equipment being way overpriced (ProV, Chrome Soft, etc). With an industry that is losing participants of the sport, their not helping by gouging the remaining members.
I guess you really can't fault the companies. As long as people still continue to pay their prices, the companies will continue to sell their overpriced equipment.

Really it's not Nassau's issue. If Titleist doesn't want to use them as manufacturer, they can always fall to the Costco's order. It's up to sellers/resellers to market and sell their products. If they can find an exclusive maker for their balls and cheaper they would have moved a long time ago.

[Kilroy]

Maybe not gone for good
https://consumerist.com/2017/01/26/g...e-coming-back/

[Break68]

And here on yahoo.com:
http://sports.yahoo.com/news/report-...201713330.html

[Break68]

This might be hopeful:
http://www.golfwrx.com/426008/costco...-will-be-back/

Costco chairman: The Kirkland Signature golf ball will be back

[larry]

According to Jeff Shackelford, the Kirkland golf balls are made from old over stock Taylor Made ball cores:

http://www.golfchannel.com/media/sha...ball-industry/

[SnazzyD]

According to Jeff Shackelford, the Kirkland golf balls are made from old over stock Taylor Made ball cores:

http://www.golfchannel.com/media/sha...ball-industry/

Did Taylormade ever make a ball that had these characteristics? That seems a stretch...

[jeffc]

It's Nassau's ball - the Quattro. Here's proof. They are marketing it with details now that it was the KSig

http://nassaugolfballs.co.uk/golf-ba...d.aspx#quattro

[boylebj]

Yes it is the Quattro. Nassau has priced it at 40 pounds a dozen in GB. Would they allow Costco to market it in US for $15 a dozen?????? Canada for $20-$25 a dozen?????

[4jag]

These things are selling for crazy prices on Ebay. One listing has 2 dozen listed for $238US! I broke down and sold one 24 pack for $99US - they sold in less then 5 minutes. Most guys are getting $50-60US per dozen.

Capitalism is alive and well in the USA.

[atomic]

Why would you pay $70 US for a dozen Ksig balls, when ProV1/x are selling at 39.99/dozen, and the Ksig balls were almost as good as the ProV1's?

[jeffc]

Why would you pay $70 US for a dozen Ksig balls, when ProV1/x are selling at 39.99/dozen, and the Ksig balls were almost as good as the ProV1's?

Lots of reasons. Supply and demand . People want to try them and you can't buy them. If I recall, you buy crazy expensive Scott Cameron's no?

[atomic]

Lots of reasons. Supply and demand . People want to try them and you can't buy them. If I recall, you buy crazy expensive Scott Cameron's no?

Yes Jeff, I own several Cameron putters...

But if Costco produced a bunch of Cameron clone putters, and they sold out, and were selling for higher than MSRP on Cameron putters, I wouldn't buy one...I'd the the real thing. Just sayin'.

[jeffc]

Yes Jeff, I own several Cameron putters...

But if Costco produced a bunch of Cameron clone putters, and they sold out, and were selling for higher than MSRP on Cameron putters, I wouldn't buy one...I'd the the real thing. Just sayin'.

you wouldn't but others might. It's difficult to rate a putter on performance but if one outperformed a scotty, and there were limited supply, the price would go through the roof.

[leftylucas]

It's back but maybe not??????

https://www.mygolfspy.com/costco-ksi...ance-one-ball/

[BARGEGOLF]

Adding another article. Will be interesting to see if performance levels of previous ball can be replicated at the price point they will want to sell the product.

http://www.geoffshackelford.com/home...ming-list.html

[ladygolfer13]

I was just in Myrtle Beach and that is first thing i went to see if have it and not stocked there

[double_bogey]

Actually I'm just curious why so much hype over the Kirkland Signature balls that now they are selling at some $30-50+/dozen online? Isn't the MG Tour C4 balls just as good and readily available at $20/dozen?

[btasse]

Actually I'm just curious why so much hype over the Kirkland Signature balls that now they are selling at some $30-50+/dozen online? Isn't the MG Tour C4 balls just as good and readily available at $20/dozen?

The balls had the same composition and specs as the ProV1; also they were $30 for 2 dozen balls, not one.

[double_bogey]

The balls had the same composition and specs as the ProV1; also they were $30 for 2 dozen balls, not one.

Yeah but now they've sold out at Costco people are trying to sell these online for $30 or much more per dozen. The MG Tour C4 also has similar composition and performance as the ProV1 for $20/dozen and still available?

For me I just thought if I couldn't get the KS for $15/dozen (or $30 for 2 dozen) I would just go buy the MG Tour C4 for $20/dozen if I don't want to shell out for ProV1's...

[jeffc]

Yeah but now they've sold out at Costco people are trying to sell these online for $30 or much more per dozen. The MG Tour C4 also has similar composition and performance as the ProV1 for $20/dozen and still available?

For me I just thought if I couldn't get the KS for $15/dozen (or $30 for 2 dozen) I would just go buy the MG Tour C4 for $20/dozen if I don't want to shell out for ProV1's...

simple economics, supply and demand. The supply is gone so the demand had gone through the roof.

[btasse]

Apparently there is a new version of the Kirkland ball coming out but wont have the same specs as the current ball (which probably might be discontinued). Should be available at Costco in the spring according to posts on Golfworx.

[leftylucas]

All the hype is responsible for this craziness, hell I don't even use a Pro V and I split a double dozen with a friend back in October of course I did not know it was a comparable ball to the Pro V at the time. This is a strange phenomena for sure, this ball exploded on the net and really is still riding the crazy train.