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Investing in a Golf Shop


Kleriq
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We have a GG, three DICKs, Club Champion and four (4) independent golf shops of varying sales, services. I am surprised they are all in business and thriving but they all have been at it for a while, they all have deep roots and online presence at varying degrees. All this in a geographical sprawl probably the size of SF.

The biggest is 1/3rd a typical GG (basically a mini GG) - brand names and all. Same prices. But they have been here 20+ years. They do fittings. Owner operator - great guy. 

Another is a '2nd swing' type retail (two locations) is a combo of brand names, new stuff + a lot of used equipment (they serve as a hub for folks to sell and buy) like a used car store. - Owner operator - splits his time between the two locations. Also do fittings. Have been here 20+ years. 

Fourth is a hole in the wall recycled golf balls store as the main theme, with retail everything same main brands, some off brands, does club repair. Apparently he (owner) dives and recovers anywhere from 700K to 800K balls a year. Has a team to grade it and sells it accordingly - does well. I have stopped by a few times to get quick grip changes, etc. and picked up a set of top grade Pro V1s for $24.99. 

Common theme is the owners are all very heavily vested and have significant presence. They all compete with GG and DICKs, but they also don't really (heh.. make of that what you will). They don't seem to do anything 'better' than GG but they do it well. I have never come across an uninterested or worse poor person in any of these locations. It's a small but important draw. 

I suggest OP do a tour of independent shops  to see as many as they can to see what floats their boat and keeps them afloat. I can't comment on finances/inventory. I think starting at a level (being prepared for complete loss) is mandatory. Good luck but I would caution against absentee landlord type ownership.  

Our COL is roughly 50-60 percent of SF. Real estate probably 1/3rd.

 

Edited by GolfLug

Vishal S.

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I hate to join the chorus of folks raining on your parade, but I will suggest you consider the climate around San Francisco right now. 

There is a reason that major retailers are fleeing the city, and the Bay Area in general. Walgreens can't keep petty theft at bay and is closing locations as a result. Are you prepared to hire armed security to protect your $500 drivers and pay insurance rates that will likely be double or triple what competing stores will pay? 

The logistical challenges of brick and mortar retail are hard enough, but opening a retail shop in the city, loaded with items valued from $30-$900???? Geez, you are a braver man than I.

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Anywhere in the world with high real estate costs, B&M stores are suffering because of the online presence and delivery being offered.  Heck, my wife orders pretty much everything online.  Clothes, groceries, electronic items you name it.  I have bought new golf balls online.

If you were investing in a cheaper town, I would say take the risk.  Places like SF/NYC/London/Tokyo etc. are very high risk unless you have an USP or high margins.

Yes, the business could potentially work but the odds are against you unfortunately.

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  • 2 weeks later...

Looks like plenty of people have covered the negatives so I will try to focus on positives. However, I do agree your demographic is not "all golfers" or the segment of lower spending golfers.

You have to find something that makes you different, and able to receive a premium price. Why would people be willing to frequent your establishment rather than using you to establish what they want to buy online?

If you are in SF you probably need to focus on the premium customers, to overcome his rent, taxes, and even parking costs. Club repairs, custom fittings and the like could be a solid part of your business, but you will likely need time to build up a client base. How many people really even check their lofts and tune up their clubs even annually?

I consider myself an avid golfer willing to pay for equipment, apparel and other items, but I won't pay "$200 for that special leather head cover". However, I have seen plenty of members willing to pay crazy amounts to have their name and club logo embroidered on that new bag. If you can tap into that crowd they can keep you in business. Customization might be a service you can provide for a number of clubs and courses; hopefully at a premium price.

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3 hours ago, KMP said:

However, I have seen plenty of members willing to pay crazy amounts to have their name and club logo embroidered on that new bag. If you can tap into that crowd they can keep you in business. Customization might be a service you can provide for a number of clubs and courses; hopefully at a premium price.

That is 100% an online business. NO way in the world is a suburban bricks and mortar store making monyt from this. All you need is a garage/spare-room and skilled craftsperson to make these items.

You have an online gallery of your offerings and a good website. Then you have a global market. I can't think of one reason for this to be running in 1930s mode with a tiny, local market.

In the race of life, always back self-interest. At least you know it's trying.

 

 

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9 hours ago, Shorty said:

That is 100% an online business. NO way in the world is a suburban bricks and mortar store making monyt from this. All you need is a garage/spare-room and skilled craftsperson to make these items.

You have an online gallery of your offerings and a good website. Then you have a global market. I can't think of one reason for this to be running in 1930s mode with a tiny, local market.

I think @KMP was implying you'd do both. Service the locals and offer your service online. But I may be wrong. 

My bag is an ever-changing combination of clubs. 

A mix I am forever tinkering with. 

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I really hope that you take all the great advice given to you in this thread and don't open this business. I agree with the people in this thread that are telling you this is a bad idea for a variety of (good, logical) reasons. I'll give you one more.....

At one time, I was heavily into the shooting sports. I was competing a high level. I decided to open a shooting-related business thinking it would be fun. Instead, it look my hobby and turned it into a job. This business sucked the joy out of my favorite pastime.

Keep golf as something you love (a stress reliever) and don't turn it into something that is stressful.

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On 12/25/2021 at 7:45 AM, ChetlovesMer said:

I think @KMP was implying you'd do both. Service the locals and offer your service online. But I may be wrong. 

That is correct Chet. 

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Another way to obtain merchandise cheaply would be to go to any golf retail shows on the last day near the end you may be able to purchase some inventory at large discounts if you were to buy bulk. Most of it may be a year or 2 old but if it's still in packaging it's not second hand.

Rich C.

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  • 2 weeks later...

You would absolutely need some additional revenue stream above and beyond retail club margins.   

There are some golf simulator facilities here in Minneapolis that do pretty well.    but, they also have food and drink.  But, between hourly Sim rates and alcohol margins, they can cover traditional brick & mortar overhead.   

Now, if you were to take an idea like that and add specialized club fitting and retail like a Club Champion or True Spec, you have have something to work with.    However, now you just added more floor space along with food & beverage license in prime San Francisco retail space...    so, I hope the demand is high enough there for you to be able to charge $100+ an hour for that sim time..   

 

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Most people are right, you are going to struggle to exist. I remember there was a PGA Tour store in Palo Alto which is only a 30 minute drive. Yeah, most people from SF don't want to drive down there, but it would be your biggest competition (assuming it is still there).

I would argue if you wanted to sell clubs, balls, and the such you'd need to build a community location. It would have to have a simulator, probably 2, and would be spot people could come and have a party or just hang out. Once there (ideally drinking) you could convince people to buy things. You might start by trying to convince @iacas he should set up a west coast golf evolution location.

Lastly, I disagree that SF has a thriving golf community. Yes it has a number of golf courses, but most good ones are private (Olympic, SF Golf Club, Lake Merced) or semi-private (Presidio) or just downright expensive (Harding Park). Lincoln Park is a fun track, but SUPER busy. I don't think it is easy to get out and play unless you leave the city.

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Michael

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Note: This thread is 911 days old. We appreciate that you found this thread instead of starting a new one, but if you plan to post here please make sure it's still relevant. If not, please start a new topic. Thank you!

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