Why is my stuff late? This is a reason...

[DavePelz4]

1 hour ago, ThinkingPlus said:

I was going for secret society of metallurgists.  6061 tattooed on the inside of their wrists.

 

You're not supposed to know about them TP...unless you're also one?

[ThinkingPlus]

21 minutes ago, DavePelz4 said:

 

You're not supposed to know about them TP...unless you're also one?

I can neither confirm or deny.

[iNeedMoreGolf]

3 hours ago, DavePelz4 said:

 

You think the ocean is a graduate of a college?

 

If you're going conspiracy theory, let's at least go Illuminati.

No man they got you all confused... they want you to think its the illuminati... its the aluminumnatii... you have to wake up man. We should delete these messages they are watching!! shhhh....  pretend we are trading golf tips... yeah so swing left to go right ok bill...see you next sunday at 1:30 tee time. 

[DavePelz4]

3 minutes ago, iNeedMoreGolf said:

No man they got you all confused... they want you to think its the illuminati... its the aluminumnatii... you have to wake up man. We should delete these messages they are watching!! shhhh....  pretend we are trading golf tips... yeah so swing left to go right ok bill...see you next sunday at 1:30 tee time. 

 

Ah...that Aluminumnati....the one with Reynolds Wrap?

[forrester_fire]

21 hours ago, me05501 said:

I mean...they could always make the stuff here. 😬

 

Then everything would be PXG prices.

[me05501]

Just now, forrester_fire said:

 

Then everything would be PXG prices.

 

Maybe. OEM golf clubs are basically luxury items at this point. The manufacturers are getting the product made for very, very low prices and then spending a ton of marketing money to create a halo effect that makes their clubs seem worth the retail prices. I think higher manufacturing costs might be offset by lower transportation costs and the rest would eat into their margins some but not an appreciable amount. 

I don't have any inside info, but I've heard that retailers pay 60-65% of retail for OEM clubs. So that $500 driver costs the shop $325 or so. The manufacturing and shipping costs are probably $30-40 bucks. 

They have a lot of room to do the right thing, or at least to move a bit of their production stateside to avoid situations exactly like the current one. 

[Socrates]

3 hours ago, me05501 said:

 

Maybe. OEM golf clubs are basically luxury items at this point. The manufacturers are getting the product made for very, very low prices and then spending a ton of marketing money to create a halo effect that makes their clubs seem worth the retail prices. I think higher manufacturing costs might be offset by lower transportation costs and the rest would eat into their margins some but not an appreciable amount. 

I don't have any inside info, but I've heard that retailers pay 60-65% of retail for OEM clubs. So that $500 driver costs the shop $325 or so. The manufacturing and shipping costs are probably $30-40 bucks. 

They have a lot of room to do the right thing, or at least to move a bit of their production stateside to avoid situations exactly like the current one. 

Dream on for the cost of making a club. A modern driver head is around $75-$100 and that doesn't include the shaft or the grip or assembly.  Add in the extensive R&D costs, shipping, marketing, staff overhead and they aren't making much off that driver.  If they are lucky, they might make $25 on a driver.

 

This was 4 years ago: insert the website of that unmentionable website instead of "Not allowed because of spam" and you'll find it...

 

https://Not allowed because of spam.com/infographic-the-true-cost-of-your-500-driver/

Edited February 12, 2021 by Socrates

[me05501]

1 hour ago, Socrates said:

Dream on for the cost of making a club. A modern driver head is around $75-$100 and that doesn't include the shaft or the grip or assembly.  Add in the extensive R&D costs, shipping, marketing, staff overhead and they aren't making much off that driver.  If they are lucky, they might make $25 on a driver.

 

This was 4 years ago: insert the website of that unmentionable website instead of "Not allowed because of spam" and you'll find it...

 

https://Not allowed because of spam.com/infographic-the-true-cost-of-your-500-driver/

That article basically supports my point. So the driver costs $90 to make and not $40. There’s still plenty of room to run a business there. And many of the things the info graphic notes as “overhead” are within the oem’s control. If your product is proudly made in the USA maybe you don’t have to give as many away, or shell out for huge endorsement deals. Just spitballing. 

[Socrates]

2 hours ago, me05501 said:

That article basically supports my point. So the driver costs $90 to make and not $40. There’s still plenty of room to run a business there. And many of the things the info graphic notes as “overhead” are within the oem’s control. If your product is proudly made in the USA maybe you don’t have to give as many away, or shell out for huge endorsement deals. Just spitballing. 

That was 4 yrs ago and that’s with a cheap shaft, not the real deal shafts everyone now uses.  But I guess you don’t want to use that or the other costs of design and costs of creating the infrastructure to bring that to market.  They all get added to that $100+ cost of just the materials used.  You can’t ignore those costs just because you want to.  Well, you can, but it’s not reality.  

[me05501]

8 hours ago, Socrates said:

That was 4 yrs ago and that’s with a cheap shaft, not the real deal shafts everyone now uses.  But I guess you don’t want to use that or the other costs of design and costs of creating the infrastructure to bring that to market.  They all get added to that $100+ cost of just the materials used.  You can’t ignore those costs just because you want to.  Well, you can, but it’s not reality.  

 

Right now a large portion of golf balls are made in the USA, so it's not like it can't happen with clubs. The OEM's are just addicted to the fatter profit margins that come from having the components made as cheaply as possible. 

 

Design costs should not be different if the clubs are made in China or on the moon. Design is done stateside already as far as we know. 

Marketing is also already a stateside spend, so those costs aren't going to change. Magazine ads and endorsements cost what they cost and have no impact on where items are manufactured. 

 

The only part we're talking about is actually casting the heads and assembling the clubs. If that cost is currently $75 per club, maybe it goes to $125 per club depending on where your facility is located. But instead of shipping clubs from China to California and then handling them again and again to get them out to distributors and retailers, you could have a centralized distribution operation here that ships the clubs directly to wherever they need to go. 

 

The infographic doesn't estimate a cost for bringing the clubs over. It certainly can't estimate the cost of lost sales while containers full of new in-demand clubs stack up in the ocean outside San Diego. It can't estimate the costs that will be incurred when Chinese labor becomes too expensive and the plants have to relocate in India or Africa. 

 

 

 

[uitar9]

This applies to many industries. I wonder what the economic impact to the US or Canada to have manufacturing brought back to their countries. Large corporations get to use local tax laws and pay foreign manufacturing costs (all in). Considering the additional tax dollars generated by having local workers, working and consuming, diminishing tax incentives could still be given to corporations to bring it all back home and be tax positive plus thousands could be working in our home countries. 

[bladehunter]

21 hours ago, DavePelz4 said:

 

You're not supposed to know about them TP...unless you're also one?

If she told you , she’d have to ....... well. You know.  

[me05501]

54 minutes ago, uitar9 said:

This applies to many industries. I wonder what the economic impact to the US or Canada to have manufacturing brought back to their countries. Large corporations get to use local tax laws and pay foreign manufacturing costs (all in). Considering the additional tax dollars generated by having local workers, working and consuming, diminishing tax incentives could still be given to corporations to bring it all back home and be tax positive plus thousands could be working in our home countries. 

 

True. I think the COVID-related pinching of supply chains during 2020 got a lot of manufacturers thinking about that issue. 

 

U.S. municipalities have been conditioned to bend over backward to try to attract new plants to their areas. They're happy to have the jobs in their area and are willing to forgo property taxes and a lot of other revenue sources in order to get them. The idea is that if you win the big plant for your area you can use that as a "loss leader" project to attract suppliers and other related businesses. 

 

The only VW plant in the U.S. is located in my city and the deal they made to attract the plant was incredibly advantageous to VW. 

[GHIN n Juice]

This all reminds me of a discussion we had in an economics class years, and years ago.  The professor was telling us about the first Japanese car his family ever purchased back in the 70s.  He distinctly remembered his father and the salesman walking around an American made car with clipboards noting everything on the car that needed to be fixed before (!) it could be driven off the lot.  During the buying negotiation, test driving, and walk around his father saw people driving Hondas off the lot the same day they purchased the car.  Nothing needed to be fixed on their new cars.  He finally told the salesman he would be going with the Honda since he could get one that day.

 

I can only imagine walking into a pro shop to pick out an American made driver, then handing the pro a list of things to be fixed before I could pick it up in a week, lol...loft should be 9, not 10.23, grip is on sideways, it’s missing weights, the adapter sleeve is lefty on my right handed driver, lol.  

[J Bez]

On 2/10/2021 at 9:09 PM, tomg1969 said:

I ordered a set on 12/30 and they shipped on 2/8, so yes, I'd say that's about right

Man - one of the few times it pays to be a lefty...  LH shipping date is 2/18 on website for P770's

[golftejas]

https://www.cnbc.com/2021/01/22/shipping-container-shortage-is-causing-shipping-costs-to-rise.html

 

https://www.cnbc.com/2021/01/26/shipping-carriers-rejected-us-agricultural-exports-sent-empty-containers-to-china.html

 

Just the shipping costs alone will drive up club prices some more.  China is pretty much kicking our tail economically, from an import/export perspective ... but "somebody" seems to think they're our best buds and it's ok to be reliant on them for critical goods (i.e. golf clubs et al 😝).

Edited February 12, 2021 by golftejas

[Greenie]

The supply chain has been affected in many areas. 

 

My refrigerator broke last April. I'm a fix it kind of person so I took it apart and saw what parts I needed. The parts were over $500. I decided to get a new refrigerator. Having an older kitchen I needed a 33" wide refrigerator with the new standard being 35". I couldn't find any refrigerators in stock at all. 

 

I decided to order the parts and keep the old one going. I couldn't get the parts anywhere.

 

I tried to get any refrigerator any size smaller than 33". I finally got lucky and got a smaller one to keep things going after searching for a month.

 

I finally got our kitchen fridge in October. There was a couple there at the same time and they said they would take one too. They were told possible March of this yr. She told me I got lucky to get one. I told her I had been waiting since April to get one.

 

I ordered my Ping irons and had to wait 11 weeks to get them. That wasn't a big deal to me. Trying to get a necessity such as a refrigerator and waiting was terrible. 

[cardia10]

1 hour ago, me05501 said:

 

True. I think the COVID-related pinching of supply chains during 2020 got a lot of manufacturers thinking about that issue. 

 

U.S. municipalities have been conditioned to bend over backward to try to attract new plants to their areas. They're happy to have the jobs in their area and are willing to forgo property taxes and a lot of other revenue sources in order to get them. The idea is that if you win the big plant for your area you can use that as a "loss leader" project to attract suppliers and other related businesses. 

 

The only VW plant in the U.S. is located in my city and the deal they made to attract the plant was incredibly advantageous to VW. 

Interesting as I worked for the State of TN on this project. The incentives to VW were great but we estimated a 10:1 multiplier effect on jobs and investment. Early results after 5 years studied by UT proved 12-14 new jobs created for every 1 VW job. Communities try to break even for providing for manufacturing companies. Tennessee is a sales tax driven state with no income tax. TN makes money when industries put paychecks in peoples hand and those people spend money.  The amount of abated property tax is a small portion to the sales tax creation. 

[mljones99]

Containers is a huge problem I'm dealing with in tire and custom wheels.  Not enough containers to get them over here and then when they are here there isn't the labor, chassis, etc... to get them to our distribution centers. 

[cardia10]

38 minutes ago, golftejas said:

https://www.cnbc.com/2021/01/22/shipping-container-shortage-is-causing-shipping-costs-to-rise.html

 

https://www.cnbc.com/2021/01/26/shipping-carriers-rejected-us-agricultural-exports-sent-empty-containers-to-china.html

 

Just the shipping costs alone will drive up club prices some more.  China is pretty much kicking our tail economically, from an import/export perspective ... but "somebody" seems to think they're our best buds and it's ok to be reliant on them for critical goods (i.e. golf clubs et al 😝).

China is also losing as their wage rates continue to rise. Today, they are very comparable to Mexico. Mexico is a realistic opportunity for the golf industry as logistics is so much better than Asia. Will the quality be there, who knows. There is a reason that the US typically won't use many parts from Mexico for cars for the American market. About 90% of those parts go to central and south american automobiles. 

[cardia10]

Just now, mljones99 said:

Containers is a huge problem I'm dealing with in tire and custom wheels.  Not enough containers to get them over here and then when they are here there isn't the labor, chassis, etc... to get them to our distribution centers. 

Spot on right now. We are shipping boatloads of empty containers back to China daily. Would be nice if they were filled with US goods, but early projections are US goods productions will decrease significantly while we continue to rely on imports.

[Socrates]

3 hours ago, me05501 said:

 

Right now a large portion of golf balls are made in the USA, so it's not like it can't happen with clubs. The OEM's are just addicted to the fatter profit margins that come from having the components made as cheaply as possible. 

 

Design costs should not be different if the clubs are made in China or on the moon. Design is done stateside already as far as we know. 

Marketing is also already a stateside spend, so those costs aren't going to change. Magazine ads and endorsements cost what they cost and have no impact on where items are manufactured. 

 

The only part we're talking about is actually casting the heads and assembling the clubs. If that cost is currently $75 per club, maybe it goes to $125 per club depending on where your facility is located. But instead of shipping clubs from China to California and then handling them again and again to get them out to distributors and retailers, you could have a centralized distribution operation here that ships the clubs directly to wherever they need to go. 

 

The infographic doesn't estimate a cost for bringing the clubs over. It certainly can't estimate the cost of lost sales while containers full of new in-demand clubs stack up in the ocean outside San Diego. It can't estimate the costs that will be incurred when Chinese labor becomes too expensive and the plants have to relocate in India or Africa. 

 

 

 

Shipping cost per club is actually very small (around 25 cents - likely less).  You keep talking that these big costs would disappear if the production and distribution was in N. America, but almost all costs not related to the actual material and production costs are incurred by infrastructure in N. America.  If by some magic bullet, you were able to produce the the clubs in N. America, you somehow believe these costs would disappear.  That is not reality.

[Socrates]

20 minutes ago, cardia10 said:

Spot on right now. We are shipping boatloads of empty containers back to China daily. Would be nice if they were filled with US goods, but early projections are US goods productions will decrease significantly while we continue to rely on imports.

The person to blame for this is currently residing in Mar-a-Lago.  Single-highhandedly removed the States from the Global Market.

[me05501]

2 minutes ago, Socrates said:

Shipping cost per club is actually very small (around 25 cents - likely less).  You keep talking that these big costs would disappear if the production and distribution was in N. America, but almost all costs not related to the actual material and production costs are incurred by infrastructure in N. America.  If by some magic bullet, you were able to produce the the clubs in N. America, you somehow believe these costs would disappear.  That is not reality.

 

And you keep pointing to a Not allowed because of spam infographic as if it's the Rosetta Stone. 🙂

[me05501]

27 minutes ago, cardia10 said:

Interesting as I worked for the State of TN on this project. The incentives to VW were great but we estimated a 10:1 multiplier effect on jobs and investment. Early results after 5 years studied by UT proved 12-14 new jobs created for every 1 VW job. Communities try to break even for providing for manufacturing companies. Tennessee is a sales tax driven state with no income tax. TN makes money when industries put paychecks in peoples hand and those people spend money.  The amount of abated property tax is a small portion to the sales tax creation. 

 

 

Good to have that perspective. It would be important to normalize those job creation numbers for the fact that this area is growing quickly in a general sense with or without VW. 

 

I think it's interesting that the pols putting together these deals are willing to see and accept the logic that exists for incentivizing large-scale economic development, but would be unlikely to support other concepts based around similar logic, such as a higher minimum wage or universal basic income. It is more or less the same logic: "Using this money over HERE results in a 10x return over HERE, therefore spending the money in that way is a good decision." 

[Socrates]

4 minutes ago, me05501 said:

 

And you keep pointing to a Not allowed because of spam infographic as if it's the Rosetta Stone. 🙂

Only because I can't find the thread with Tom Wishon giving essentially the same information.  It was lost in one of the wrx conversions. 

[cardia10]

Just now, me05501 said:

 

 

Good to have that perspective. It would be important to normalize those job creation numbers for the fact that this area is growing quickly in a general sense with or without VW. 

 

I think it's interesting that the pols putting together these deals are willing to see and accept the logic that exists for incentivizing large-scale economic development, but would be unlikely to support other concepts based around similar logic, such as a higher minimum wage or universal basic income. It is more or less the same logic: "Using this money over HERE results in a 10x return over HERE, therefore spending the money in that way is a good decision." 

I work with Matt Murray a lot at UT and many of those studies are ongoing. The minimum wage one is always interesting as yes, people need more money to live, but every study I've read equates the rise in tax brackets and cost of goods increases negates the entire increase. As a society, for some reason, we expect low skill, low education jobs to be career choices. I'm of the thought that higher wages should be earned, not given based on effort, skill, education and experience. Minimum wage jobs are meant as a starting point, part time, high school level jobs. To pay a CNC machinist the same as we pay someone to flip burgers would essentially force even more jobs overseas or at least North and South of us. I wholeheartedly agree that minimum wage is too low, but to double it just because is irresponsible. Look at what has happened to cities who have now enacted it. Businesses go just outside city limits or close. A few patriotic ones try to make a go of it, but quickly realize that a barista serving coffee takes home more than the entrepreneur who dumped their life savings into a business. 

 

I think the golf industry is a good example. There isn't a ton of money in it unless you are a pro golfer probably ranked in the top 300 in the world or an OEM CEO. Everyone else fights for scraps. I compete with Mexico every day on projects for 2 reasons. Their imported goods don't have to travel across an ocean and wage rates 1/3-1/5 of the US.

[cardia10]

15 minutes ago, Socrates said:

The person to blame for this is currently residing in Mar-a-Lago.  Single-highhandedly removed the States from the Global Market.

While allowing US manufactures to compete again on a global level. Prior to our former president, certain steels were imported from Germany at a 40% tariff. When the goods were produced and put back on the boat to Germany, the US received 0%. This is from a nation that we are "partners" with. I do this for a living every day and the US has been taken advantage of for so many years it is embarrassing. As I travel around, I ask other country's economic leaders what they think about our country. The last few years they always laugh and say "I didn't think it would take this long for you to get us back." 

[me05501]

6 minutes ago, cardia10 said:

I work with Matt Murray a lot at UT and many of those studies are ongoing. The minimum wage one is always interesting as yes, people need more money to live, but every study I've read equates the rise in tax brackets and cost of goods increases negates the entire increase. As a society, for some reason, we expect low skill, low education jobs to be career choices. I'm of the thought that higher wages should be earned, not given based on effort, skill, education and experience. Minimum wage jobs are meant as a starting point, part time, high school level jobs. To pay a CNC machinist the same as we pay someone to flip burgers would essentially force even more jobs overseas or at least North and South of us. I wholeheartedly agree that minimum wage is too low, but to double it just because is irresponsible. Look at what has happened to cities who have now enacted it. Businesses go just outside city limits or close. A few patriotic ones try to make a go of it, but quickly realize that a barista serving coffee takes home more than the entrepreneur who dumped their life savings into a business. 

 

I think the golf industry is a good example. There isn't a ton of money in it unless you are a pro golfer probably ranked in the top 300 in the world or an OEM CEO. Everyone else fights for scraps. I compete with Mexico every day on projects for 2 reasons. Their imported goods don't have to travel across an ocean and wage rates 1/3-1/5 of the US.

 

The problem is that the minimum wage law doesn't account for the difference between an entry level job and any other job. We ought to work on that, maybe. 

[cardia10]

Ari that was with Scratch golf now with NCW would be good to bring into the conversation here. He has traveled the country and world figuring out the who and how of how to make clubs. Between him and Patrick, they probably have a great perspective as they have done it all on a level that us much more understandable than what OEM's deal with. OEM's spend more in print ads than most people will make in their life. I'm sure there isn't much margin on clubs, but when we see what pros are paid and the other things they do, they sure aren't struggling.