Kirkland (Costco) Premium Golf Ball

[iacas]

37 minutes ago, rehmwa said:

Really?   Let's assume R&D is the same.  So (hypothetically) If Costco has a 15% markup from cost.  And Golf Retailers have a 300% markup from cost.  Then the same basis of $1 to manufacture a ball would retail at $1.15 at Costco and $4 at Golf Inc.

Titleist isn't marking up the balls 300%. They have patent costs and hire U.S. labor.

The ball tests well it seems.

[newtogolf]

8 hours ago, iacas said:

Titleist isn't marking up the balls 300%. They have patent costs and hire U.S. labor.

The ball tests well it seems.

I'd guess Titleists gross and net margin targets may be higher than a Korean company but I agree their overhead and direct labor costs are also substantially higher.  

I don't see the PGA Tour making Kirkland the #1 ball on Tour, it's a good cheaper alternative to the Pro V as well as other lesser known premium balls priced slightly higher like the Snell MTB and MG Tour C4.  

[AbsoluteTruths]

I played yesterday with the Kirkland Signature. I have never driven the ball so well. I do not know if it was the ball or my recent improvements on my swing thanks to my excellent coach. I choked on an approach shot to the green over water and lost one into the water. I reached in my bag real quick to get another ball and got a DT solo. I could tell the difference and it rolled of the back of the green.

I have not read all the posts on this thread so I do not know if you have seen the test results from MyGolfSpy with the Kirkland vs Prov1.

[jkelley9]

Swingbyswing posted the golf spy article comparing this ball to the ProV1 in their email distribution. Probably sparking added in the ball.

[No Mulligans]

20 hours ago, iacas said:

Titleist isn't marking up the balls 300%. They have patent costs and hire U.S. labor.

The ball tests well it seems.

No, but they do have about a 100% markup in general per Acushnet Holdings (Titleist) financials.  36% of their revenue is from golf ball sales.  They sale to retailers who then mark it up probably another 100% or so.?  If that's the case then to the consumer there is maybe about a 400% markup above Titleist costs.  If so, a $4 ball has about $1 in costs ($1 plus $1 Titleist markup = $2 plus $2 retailer markup =$4; $4 vs. $1 = 400% markup).

http://www.nasdaq.com/markets/ipos/filing.ashx?filingid=10945369

[iacas]

24 minutes ago, No Mulligans said:

No, but they do have about a 100% markup in general per Acushnet Holdings (Titleist) financials.  36% of their revenue is from golf ball sales.  They sale to retailers who then mark it up probably another 100% or so.?  If that's the case then to the consumer there is maybe about a 400% markup above Titleist costs.  If so, a $4 ball has about $1 in costs ($1 plus $1 Titleist markup = $2 plus $2 retailer markup =$4; $4 vs. $1 = 400% markup).

I can't give you specifics, but that's not even really close.

Particularly the retailer side of things.

AFAIK (that I can share), the cost to make the golf balls - the materials and the manufacturing process) cost a bit under a buck a ball. There's more to it than that. Even with something as simple as shipping them to their distribution channel (golf shops, etc.).

This thread's really not about Titleist though. The costs of the Costco balls I shared info on above.

[No Mulligans]

20 minutes ago, iacas said:

I can't give you specifics, but that's not even really close.

Can't really discuss without any specifics.

Part of what I provided were facts published by Acushnet and linked in my previous post.  That is, there overall markup is around 100%, 217 million in costs on 443 million in revenues per their quarter ended March 31, 2016 as reported to the SEC.  36% of their revenue is from golf ball sales also as reported to the SEC.  Those are just facts.

My conjecture was: 1) that their overall markup on products is representative of their golf ball markup (it's their largest product category so it's most likely representative, imo). 2) that the retailers markup the balls they purchase, we can all agree on that they must.  And 3) that the retailer markup is 100%.  I have no evidence of that but believe that is not an unusual markup for a retailer.  Perhaps I'm off base on the retailer markup?

There's some meat and specifics to advance the discussion.

[iacas]

2 minutes ago, No Mulligans said:

Can't really discuss without any specifics.

I know what Dick's pays for Pro V1x. I know what a few of the clubs around here pay for Pro V1x. I know what college teams can get Pro V1x for.

I stand by "you're not even close."

2 minutes ago, No Mulligans said:

Perhaps I'm off base on the retailer markup?

There's some meat and specifics there to advance the discussion.

Way off.

And let's not advance the discussion, since people don't know, and this topic isn't about Titleist's golf balls.

I think that's fair.

[cristphoto]

On 11/7/2016 at 11:45 PM, iacas said:

Titleist isn't marking up the balls 300%. They have patent costs and hire U.S. labor.

The ball tests well it seems.

When I worked in a golf course pro shop (two years ago) our cost on a dozen prov1's was about $33. Golf Galaxy or other high volume stores probably get them for a couple dollars less. 

[baller7345]

Kirkland Signature Golf ball vs Titelist ProV1x - Suprising [usgolftv.com]

Another review.  Mirrors pretty much every other review put out there.  My only concern remains the one I had when they first sold out, can Nassau keep up with demand or will Costco stamp their name on another ball.

 

Edited November 11, 2016 by baller7345

[rehmwa]

It would be very funny if the Kirklands were just renamed overflow from some premium ball manufacturing lines that went straight to Costco and avoided the extra layers of middlemen/markups between the manufacturing line and the final customer.

Happens quite a bit a many industries.  Manufacturing optimization tends to converge to a common solutions.

No need to tell me they are not, I see the comments here.

I'll stick with my contention that most balls (of similar basic construction) probably cost the same to manufacture and any difference in cost to the FINAL retail purchaser (not clubs, not the retailer, not pro shops, not instructors) is likely just the number of middlemen, advertising, and amount of logistics involved in delivery.

[newtogolf]

On 11/11/2016 at 1:53 PM, rehmwa said:

It would be very funny if the Kirklands were just renamed overflow from some premium ball manufacturing lines that went straight to Costco and avoided the extra layers of middlemen/markups between the manufacturing line and the final customer.

Happens quite a bit a many industries.  Manufacturing optimization tends to converge to a common solutions.

No need to tell me they are not, I see the comments here.

I'll stick with my contention that most balls (of similar basic construction) probably cost the same to manufacture and any difference in cost to the FINAL retail purchaser (not clubs, not the retailer, not pro shops, not instructors) is likely just the number of middlemen, advertising, and amount of logistics involved in delivery.

I would also believe that Titleist spends more money on quality control than Nassau does.  

[jsgolfer]

21 hours ago, newtogolf said:

I would also believe that Titleist spends more money on quality control than Nassau does.  

I've been playing the ball for a few weeks now and I sure haven't noticed any lack of quality in the ball.  

[newtogolf]

20 minutes ago, jsgolfer said:

I've been playing the ball for a few weeks now and I sure haven't noticed any lack of quality in the ball.  

Titleist claims to have very stringent QA in terms of performance and quality, I'm just not sure Kirkland / Nassau have the same level.  

[jsgolfer]

Just now, newtogolf said:

Titleist claims to have very stringent QA in terms of performance and quality, I'm just not sure Kirkland / Nassau have the same level.  

And they may not but after playing their ball repeatably for several rounds I don't notice anything wrong with the ball.  I love the Pro V1x but for the price you can't go wrong with a Kirkland.  And I used to be a ball snob, but after @iacas got me hooked on the Snell MTB, why pay the money when another ball for a lower price is just as good.

[gregsandiego]

On 11/10/2016 at 0:21 PM, baller7345 said:

You don't have to be a member to buy these.  You do have to pay a small surcharge if you aren't a member though.

At the risk of going off topic: Joining Costco is not a way to save money. I contend that members almost always end up spending both more time and more money once they join. Huge lines into a huge parking lot, followed by a walk through a warehouse with oversized items , and you end up with a much higher grocery bill...

 

 

[newtogolf]

1 hour ago, gregsandiego said:

At the risk of going off topic: Joining Costco is not a way to save money. I contend that members almost always end up spending both more time and more money once they join. Huge lines into a huge parking lot, followed by a walk through a warehouse with oversized items , and you end up with a much higher grocery bill...

 

 

You can pick times that aren't busy.  Costco is also very good at having a lot of cashiers working, I've never waited more than 10 minutes in a line.  

As for cost, yes, bulk items cost more but they last longer and the cost per unit is usually significantly less.   The problem is that Costco has so many great products that you usually end up buying something you didn't intend to buy and likely don't need.  

[jkelley9]

7 hours ago, gregsandiego said:

At the risk of going off topic: Joining Costco is not a way to save money. I contend that members almost always end up spending both more time and more money once they join. Huge lines into a huge parking lot, followed by a walk through a warehouse with oversized items , and you end up with a much higher grocery bill...

Absolutely not (at least for myself, and I know many others I'm sure). I'm an advocate of household efficiency. 

Going on a Saturday/Sunday is weak. However, it's really not that bad to be honest. Even if the lines are huge they are very fast and efficient themselves. Two people per register to streamline. The longest I've waited in line was MAYBE 6-8 minutes. 

It's just my wife and I and we STILL buy at Costco. I HATE going to the grocery or some large retail store all the freaking time to get toothpaste, face wash, shampoo, soap, trash bags, any time one of those things runs out. It was so freaking annoying. I seriously hated that crap, having to remember to put crap on the list every week. Now we buy non-perishables in bulk and I don't have to deal with the non-perishable consumable headache anymore. And because we buy that stuff in bulk now (and don't really have a brand preference on most of it) we save. And now I have time to do other things with my life. 

We also frequently buy their rotisserie chickens (they're massive, and actually cooked correctly), wine, and big-bag snack foods from there, that take a while to go bad. Lots of savings. 

Maybe it's a different experience city to city?