Golf Galaxy business improvement opportunity

[freddy1682]

They'd rather leave a bay open and potentially sell 3k worth of equipment to a customer than rent it out to you for $10 and maybe make $5 when you buy that used R580 driver.

 

There's no money in used clubs for golf businesses. They only do it as a service. Necessary evil if you will.

 

Actually, that depends on how you look at it. From a total sales perspective, you are right. Used equipment is smaller peanuts, no question. But when you look at the margin, used is far superior to new. The mark up on used is Keystone, so 100%. On new stuff, it's only like 30-40% tops. Now the used stuff will usually be sold for a smaller margin, but most clubs still realize at least a 70% margin, which is awesome.

 

Again... 30% of $3,000 is greater than 100% of $200.

 

Of course. But for every $3000 customer, there are 20-30 $100 preowned customers.

[bearboy80]

GG started to charge to use LM last year. You can try you own clubs too.

 

If GG believe there's no money in used clubs for golf businesses and it's evil, hope they consign the used club market to other company like Global, 3Balls or 2nd Swing. That way customers get more trade in value also. GG does not carry enough used inventory does not mean customer will buy new clubs from GG.

 

Yeah most GG has 2-4 bays only unlike my local GG. In that case, they are better off to leave a bay open for new sale.

 

Wow 30-40% margin on new stuffs? So golf chain store makes $300-400 for $1000 iron set sale? So if I order a iron set directly from Callaway, they makes a lot of profit.

 

My local GG (used to be Golfsmith) also have 2 fitting bays, 3 instruction bays (Golftech), and 8 bays setup for practice. They can reserve the 2 fitting bays for new sale. I saw 8 empty bays every time I been to the store so I was hoping using the space more by cutting their prices down by 50%. It's possible I was there at bad time. Anyway GG can't just cut their prices down by 50% for few stores because most GG has 2-4 bays total.

Used clubs does not need to store at central location. The way Carmax works is if a A store customer finds a car he/she wants from B store, he/she pays $500 shipping cost to deliver the car to A store. After the test drive, is he/she does not like the car, the car stays at A store. If another stores wants the car from C store, the car ships from A store to C store at $500 shipping cost.

My local GG also use GC2 and I agree some GC2 is off while others right on. I don't know if the altitude set up is wrong or something so I usually hit my current club first before trying a new club to get the accuracy idea.

 

Yeah, my first set was new and once I get some idea what kind club I need, all my clubs are used clubs, I been buying used club online and selling back if it doesn't fit, but sometime it's hassle to package and ship and lose more money for just trying. If possible, I would pay extra for a club at retail stores if I can try before making the final decision.

I agree, Myself was $3000 customer one time but 20-30 $100 preowned customers.

[nawlinsron]

If GG wants to pretend golf demographics lean toward cats making $100K who won't blink at paying $499 for a new driver, their marketing VP must be a member at Pebble Beach and is clueless about economics in general, and golf in particular.

Since this behemoth took over GS, they have systematically stripped the old GS stores of anything resembling a balanced used club inventory. I guesstimate the avg starting price for a used set is now north of $349, with many sets being well north of $500.

GG now offloads all their "clunker" (to use GS parlance) items to 3balls for probably peanuts, leaving a doting parent to scrounge craig's list for a sanely priced starter set for his/her teenager.

What they do keep is doubled (or more) in the price given for trade-in...GS was no diff...BUT...at least they had clunkers.

There is good news...these yahoos take ANYTHING on the pgavalue guide, unlike GS which basically had a 5 year cutoff.

Ergo, you can get a no expiration date store credit for YOUR clunkers...and...along with their $50 off $250 purchase coupons, shopping can be fun again.

If you stick to used...