Brands with the most ridiculous profit margin

[+TourSpecGolfer]

Profit Margins are an interesting topic.   Why do golf clubs cost so much when most of them cost so little to make.  How it applies to big box OEMs is a bit different than boutique brands.  Large OEMs have the volume to bring costs way down thru mass production but how do we explain a small brand that charges insane prices.

Would you buy a Chinese putter head that cost 50 to make yet retails for a 1k? Then pay hundreds for custom options on it?

Would you buy an open model iron for 10X more than what it cost to produce because of some fancy scratches, torched finish, and paint fill?

It's all based on hype,  prototype,  tour issue, a master's hands,  limited edition blah blah and its getting worse.  

Today you are not only buying the product but also paying for the companies expenses i.e., marketing, tour sponsorship, the web, sales team,  your even paying for their shit designs that don't sell and they have to take a loss on.  You are paying for the shop's margins on top of that.  In today's market shops are biased toward brands that offer them the best margin.   They are just slangin the clubs they make the most money on.  In the past 25-30% margin was the norm and now some Japanese brands are entering the U.S with jacked up prices to give the shops a 50% margin.   Of course, the store is happy with that but who gets screwed?  

If the club performs does it make you feel better about paying these marked up prices?  

When the price of a club jumps we should be able to understand exactly why right?  We should know where, how and who made that club.  

Is it unreasonable paying 300 bucks for a single iron head that cost 30 bucks to make?

I say this because I've been watching brands skimp more and more while at the same time increasing prices while their costs go down.  I've built brands that started off proud with strong ethics only to watch them outsource and cut corners with their new found fame.  

There is so much garbage and misinformation being spread nowadays people like me get to choose to play the game or disrupt the system.

 To offer the best you must cut shops out of the equation.   Brand direct to consumer is the future but only if the brand removes the margin the regional distributor and shops take from the retail price.  In essence, this would be the customer paying near the shop's cost at retail.   

This all sounds very evil to anyone who owns a shop btw.

If you're going to charge 1k for anything,  your manufacturing cost needs to be near half of that.  What that boils down to is the customer getting better quality,  materials,  design,  technology at a lower price. 

what say you?

[nobmontana]

 I'd rather spend my hard earned money for products made by qualified craftsmen using quality material rather than for business expertise on how to make the biggest profit off of us consumers.   

If that means direct sales off of a website,  I am totally fine with that. 

 

[supo]

 prob why Ive  hardly  bought a new thing  in  the  last 5 years.

[+TourSpecGolfer]

What do you guys think is the shop the problem or is it the brand?

remove the shop and offer the customer the club at the shops original wholesale and the brand makes the exact same amount while the price gets slashed big time for the consumer.

Then there is the topic of selection,  shops barely make money now days they cant possibly carry everything both big box and boutique.  

Once a shop has a great margin then that brand gets the top spot, this forces other brands to raise their retail price to offer the shop a competitive margin.  Thats a huge problem because now you have all brands increasing their prices to give more margin to the shop to gain that top spot.

Brand makes more + shop makes more = Customer pays more.

[+TourSpecGolfer]

For years shops been saying don't buy online as if the internet is the enemy and for those with that attitude I say good luck Its 2017 more golf clubs are sold online than in stores.  

Brands fear the internet because they can't control it  yet brands rely on the internet to move inventory.

Delete online sales and most brands go out of business fast.

If 4 million sales comes from gray market and 3 million from authorized dealers the brand makes the same amount from both. So why do shops think the brand swill cut one leg off to save the other?  

it gets worse,  brands are now selling direct to consumer AND to shops.  5 years ago this was the red line shops said they would never allow to be crossed.  Still this screws the customer as there is no savings to be had for them.  

Like Sears,  shopping malls and bookstores custom fitting will shrink or dissapear.  its too easy to find out your own distance gaps, lofts, lie, lengths, swing weight, and grip size and with launch monitors getting smaller and cheaper and connecting to big data or AI there is no way the shops survive long term.  

[supo]

except for used gear.........................., I imagne that's gonan be  HUGE   growth and massive margin maker for the shops that survive,

 

[+TourSpecGolfer]

2 hours ago, supo said:

except for used gear.........................., I imagne that's gonan be  HUGE   growth and massive margin maker for the shops that survive,

 

Im certain our B/S/T has better deals than golfpartner & golfkids no?  

It would be a golfers dream to walk into a brick and mortar that had the same products and prices our B/S/T has.

 

[supo]

by a country  mile!!!!!!