Less than two years ago, Jason Mischel was an avid golfer who owned a thriving mail-order pet supply company. His biggest golf-related concern was probably trying to decide whether he wanted to buy a new driver.
Fast forward to the present, where Jason is the owner of GolfGods.com, an online golf shop in the dog-eat-dog world of retail golf. Now he’s trying to figure out what new drivers the rest of us want to buy – and how much we’re willing to pay, how to direct visitors to his site, and how to compete with the big names like Edwin Watts, Golfsmith, and Golf Galaxy.
Mischel has owned his pet supply business for 10 years, making healthy margins selling dog food and kitty litter. But the business was mature, and he was getting a bit bored with it. So the Minnesotan started looking at other options. He wanted to find something that meshed with his sales skill set, as well as taking advantage of the extra warehouse space he had.
So when he discovered that online golf retailer GolfGods.com was looking for a buyer, he teed it up. Mischel became owner of the company in December 2004, and his 10-person staff started learning the ropes of the golf business.
He rapidly discovered one of the biggest differences between selling bird seed and equipment for birdie-seekers. In the pet business, Mischel was buying merchandise from smaller, mom-and-pop outfits where he had the leverage to negotiate great deals. Not so in the golf biz.
“I had all the pricing power I wanted in pet supplies, with no restrictions on price at all,” Mischel says. “In golf, the big manufacturers exercise total price control. There’s no such thing as price competition. I’m selling everything at the same price as everyone else.
“It was a shock to me, coming from a wide-open business. The blessing of the way the golf business works is that you can’t have a Wal-Mart that just crushes you with their pricing power. But on the flip side, if you end up getting overstocked in a certain product you’re stuck. You can’t just blow it out the door.”
What Mischel discovered is that while it is technically illegal to for manufacturers to fix prices, they are able to control them by closing down accounts that deviate from the accepted pricing structure. So if GolfGods.com decided to sell the new driver from Company X for $100 less than everyone else, that would probably be the last product Company X ever sold through GolfGods.com.
Without price as a point of differentiation, Mischel and other retailers are left to find other ways to distinguish themselves. GolfGods.com is attempting to build its business on premium service, including the comprehensive information available on the site – such as in-depth product descriptions and reviews. “Our strategy is to pass on as much information as we can about the product, and not just the same stuff everyone has from the catalog pages,” Mischel says. “We think we know what we’re talking about, and that golfers want to buy from people who really know the product.”
There’s no doubt that Mischel and his 10-person staff has learned quite a bit about the ins and outs of the golf business in a short period of time. The site’s business is showing steady growth, and it is actively looking for ways to offer other unique services and products – possibly even private-label items in the future.
In the meantime, Mischel is tracking the latest trends in the golf equipment business to stay ahead of the curve. He sees the proliferation of stock driver shaft options as the biggest trend of the year. Some of this year’s drivers are being offered with as many as eight different exotic shafts at no additional charge – which presents an inventory challenge to retailers like Mischel, but is a great opportunity for golfers. Mischel says he says the UST ProForce V2 shaft as having good buzz, and that hybrids continue to be the fastest-growing category, with even better players moving toward hybrids in place of 2- and 3-irons.
And, of course, Mischel enjoys sampling the product. A quick peek inside his bag shows a Cleveland Launcher 460 Comp driver (soon to be replaced by a HiBORE), a Callaway Fusion 3-wood, TaylorMade Rescue Dual hybrid, TaylorMade rac LT irons and rac wedges. He calls his putter selection “the flavor of the day,” but says he’s excited to try the new Rossa AGSI and Odyssey XG putters. His golf balls of choice are the Bridgestone B330s and the Callaway HX Tour 56.
“The cool thing is that when you’re in the golf business, you’re working with some fun products,” Mischel says. “There’s always something new to try out. And the personally exciting thing is that it’s a product that I really enjoy selling and using. It’s great to be in a business where you really get excited about the product.”