American Golf – Uncompetitive or what?

[Grant85]

I always think it's strange how shops market 2nd hand equipment.

You will obviously see the new stuff on racks where the clubs are easy to see and pick up one individually.

Then you see 2nd hand stuff, often in a bucket or stand up golf bag. And often sets of irons simply held together with a few elastic bands. It seems if some retailers took a bit more time to clean up the presentation of their 2nd hand stuff, it might be a bit more appealing.

Also - as for AG - I think when they started closing the smaller shops not attached to ranges or courses, they will have realised simply the mountain of 2nd hand stock they had accumulated. I'd guess this is supply and demand and ultimately they have far too much of, probably too much to even display in their shops and so the trade in prices are a bit lower at the moment, until they can shift a bit of that.

The AG near me, in Giffnock, was a smaller shop that seemed to have almost all 2nd hand stock. It had a right good collection of Scotty Cameron's - probably £10,000 worth of them alone.

I business terms, I'd imagine AG and Golf Bidder to have similar buy and sell prices given the are both bigger businesses who can offer more of a quality guarantee than the likes of eBay and some smaller independents.

 

[Maninblack4612]

They have an EBay shop with over 21,000 feedbacks. Are they running this down or using it to unload PX stuff they've bought for peanuts?

https://www.ebay.co.uk/sch/americangolfoutlet/m.html?_nkw=&_armrs=1&_ipg=&_from=

 

[Slab]

Either way, they now have nothing, no sale, nothing. All they have is stock, I doubt this will be a singular event.

I don't know what AG's turnover is, but can they afford to keep lose customers, especially with so many online competitors that are cheaper.

I understand where you are coming from, I just don't agree with the business idea. Golfbidder show that second hand sales work, why don't AG set up an online shop for their second hand gear.

Cash flow is all well and ncie, but if you keep losing customers in the end you are boned. Plus with AG's reputation of staff who don't know a lot about the clubs means that better informed golfers steer clear of them anyway

So it's a straight choice between holding brand new current model stock or 5yr old 2nd hand stock

If I had to trade the next couple of months I know which I'd rather have

It's also perfectly possible to have lower turnover with a higher profit
But ultimately we're just spitballing on what their current strategy is

 

[Slab]

The week before I sold mine a mate of mine bought the same clubs I sold from a local pro for £350. If AG couldn't have made money on both the new sale & the PX I'm a monkey's uncle.

But 2nd hand is still not AG business, its an inconvenience and not desirable to do two transactions for the same profit they can get from one

 

[Slab]

Let's not forget that while they could sell online AG still have 100 times the rent of golfbidder, 100 times the wage bill etc etc
They just can't, or shouldn't, offer the same trade in price

 

[PJ87]

American Golf are great if you want to try the product.. I always want to try and give them my business if possible however I do like the best price.. im awful like that..

when I got my F7 Driver they let me try it.. was up for £199 (brand new.. was about 2 months ago now so 2 models old) tapped it up let me have a whirl on the range

anyways they said they would take my M2 providing I had my original shaft (which I did in the bag because I planned to sell it if they wanted it) offered me £60.. I said providing they price matched the F7 id get it (saw it for £165..) paid £105 for the driver itself after trade in

now I could have got a lot more for the m2 but it was just much easier not to.. they could have sold the F7 for £199 it was worth it.. just one site listed it so they matched.. I think everyone won there..

also I sold the other shaft for £25 so not all bad

 

[Maninblack4612]

But 2nd hand is still not AG business, its an inconvenience and not desirable to do two transactions for the same profit they can get from one

They didn't get any profit from me!

 

[Orikoru]

They have obviously changed their policy on second hand gear because the previous management over-reached with it. I used to buy all my gear from an AG Outlet that had a huge stock of second-hand stuff but no new gear (I'm guessing this is where most of the trade-in stuff ended up). But that store closed down last year around the time the new owners came in. So I figure they decided to knock the trade in stuff on the head, or at least tighten it up so they're only taking advantage of people who have no idea of the value of their gear, or don't care.

 

[Slab]

They didn't get any profit from me!

Ironically they don't make any profit even if they do business with you

 

[Maninblack4612]

Ironically they don't make any profit even if they do business with you

What a load of crap! There's no way that American Golf, with its massive buying power, should be £132 more expensive than a local golf pro. It's just possible that they've got their business model wrong.

 

[JGolfer]

I bought two g410 crossovers same day they came our. Hit each club once at the range paid £199 brand new. They offered me sub £90 for them. AG guy looked at them and said had I not told them I'd hit them he would of full refunded as they where in perfect condition. Ended up selling each for £160 privately.

So can understand Ops frustration.

 

[Orikoru]

I bought two g410 crossovers same day they came our. Hit each club once at the range paid £199 brand new. They offered me sub £90 for them. AG guy looked at them and said had I not told them I'd hit them he would of full refunded as they where in perfect condition. Ended up selling each for £160 privately.

So can understand Ops frustration.

Why did you sell them after only hitting them once??

 

[JGolfer]

Why did you sell them after only hitting them once??

Because I got back into golf after a pretty long break after having a shoulder injury which made me scared to play golf. But decided to get back into it. Went to an AG and mention I was looking for clubs since didn't have any. They asked about me previously before the accident and I mentioned I had never owned a wood. And had always played with just irons. Used to use 2 iron off the tee. They mentioned g410 would be ideal then but they wasn't released and I could pick them up day they got them. So I said okay and took my the new irons I bought home.

Went to the range and was really struggling with the 4 iron in the set getting it airborne just didn't have the swing speed or strength in my arm anymore. But obviously I was a quitter. So when the g410 came in stock I picked them up took them to the range. Soon as I hit it knew I was going to struggle. I looked down saw the lack of any loft ( had one in a 2 iron) and had no confidence. Tried the 3 and realised the same. Sold them got myself a titleist 818 h1. And noticed a marked difference.


The problem was I hadn't played in so long I thought i wouldn't be able to hit the ball. So I rushed judgment.

Rushing was a massive mistake especially since I ended up getting the irons reshafted and gave them to my dad. And got myself some ap3's.

Hindsight maybe I should of kept going with them as I started gym work and my swing speed is as fast as ever. However selling them got me the 818 h1. And it's my favourite club in the bag by a mile. So I'll take that loss and accept it.

 

[sunshine]

Either way, they now have nothing, no sale, nothing. All they have is stock, I doubt this will be a singular event.

I don't know what AG's turnover is, but can they afford to keep lose customers, especially with so many online competitors that are cheaper.

I understand where you are coming from, I just don't agree with the business idea. Golfbidder show that second hand sales work, why don't AG set up an online shop for their second hand gear.

Cash flow is all well and ncie, but if you keep losing customers in the end you are boned. Plus with AG's reputation of staff who don't know a lot about the clubs means that better informed golfers steer clear of them anyway

You blatantly don't understand the points slab and gb72 are making.

Second hand stock is not profit or cash, you can't pay rent or staff with it.
Second hand club is taking up shelf space that could display a brand new driver with a better margin.

 

[Slab]

What a load of crap! There's no way that American Golf, with its massive buying power, should be £132 more expensive than a local golf pro. It's just possible that they've got their business model wrong.

Apologies if I touched a nerve. All I'm saying is that as described by you, for the deal to be acceptable they would need to use all the profit they would've make from selling the Wilsons in order to purchase your Mizuno's, so there is no profit in that transaction and in my opinion your're mistaken for giving them a hard time over it
They may well resell the Mizunos sometime later, whether that's a day, week, month or year after you PX'd them (and if it happens quick enough there might be some residual profit to be had) but they will need to trade throughout that entire time with no profit from your business with them (had it gone ahead)

Their 2019 annual marketing budget, store layouts, staff levels, training and logistics etc etc is all planned & 90% geared towards selling Wilson D7's and other similar stock, not 5yr old used stock. So, as pretty as they are the Mizuno will sell when they sell, likely with a haggled down price.
So the profit margin they planned so carefully for at the start of the year is now at the mercy of a barter session 6 months from now when some fella (lets call hin ManInWhite) makes an low'ish offer for the Mizunos on a slow sales day near the end of the season and the manager is sick of tripping over your old clubs every time he goes to the bog and just wants shot of them before the snow hits and suddenly that planned profit from the Wilsons is marginal at best

Had you done a deal then your business with them offers the prospect of latent profit. Now multiply it by 10,000 PX deals... that is how company P&L targets get screwed

You cannot fairly compare the example of a single transaction with a sole trader holding maybe 8 or 10 sets of irons to that of a nationwide chain store, the variables are huge as to why a pro might take a bespoke decision in your case (I gave one example in my first post)

 

[Oddsocks]

Either way, they now have nothing, no sale, nothing. All they have is stock, I doubt this will be a singular event.

I don't know what AG's turnover is, but can they afford to keep lose customers, especially with so many online competitors that are cheaper.

I understand where you are coming from, I just don't agree with the business idea. Golfbidder show that second hand sales work, why don't AG set up an online shop for their second hand gear.

Cash flow is all well and ncie, but if you keep losing customers in the end you are boned. Plus with AG's reputation of staff who don't know a lot about the clubs means that better informed golfers steer clear of them anyway

The difference with golf bidder is their overhead. No national advertising, no supporting if events, not thousands of retail staff and related costs such and pensions etc, retail premises overheads, etc...... just a commercial warehouse on lower overheads with s fraction of the staff

 

[Maninblack4612]

All I'm saying is that as described by you, for the deal to be acceptable they would need to use all the profit they would've make from selling the Wilsons in order to purchase your Mizuno's, so there is no profit in that transaction and in my opinion your're mistaken for giving them a hard time over it

That's not how you measure profit.

Imagine another scenario. They offer me £175 for my pristine JPX 850s, which I accept (I would have). They put them on display at £350. A fellow like my mate comes in the next day, sees that they are just what he is looking for, and buys them. How much profit have AG made now? If they really didn't want to keep a set of modern, saleable clubs, only one model back from the latest, surely, like in the mother trade, they could sell them on to someone like a club pro who would be happy to hold them in stock for a short time before selling them for around £300.

Instead, they have lost me as a customer and, more important, made me think twice about ever buying from them again. As I said before, I think their business model is wrong. They have over corrected the previous policy on part exchanges. If they think they can't make money selling used clubs, they are going to struggle to make sales in today's competitive market.

 

[Slab]

That's not how you measure profit.

Imagine another scenario. They offer me £175 for my pristine JPX 850s, which I accept (I would have). They put them on display at £350. A fellow like my mate comes in the next day, sees that they are just what he is looking for, and buys them. How much profit have AG made now? If they really didn't want to keep a set of modern, saleable clubs, only one model back from the latest, surely, like in the mother trade, they could sell them on to someone like a club pro who would be happy to hold them in stock for a short time before selling them for around £300.

Instead, they have lost me as a customer and, more important, made me think twice about ever buying from them again. As I said before, I think their business model is wrong. They have over corrected the previous policy on part exchanges. If they think they can't make money selling used clubs, they are going to struggle to make sales in today's competitive market.

Your scenario is possible of course it is; a sale with a good margin in 24hrs. I just see it as less likely than my scenario (given its not their primary market & folk aren't popping in every day to check latest 2nd hand stock as they do with the golfbidder website who have a much greater chance of selling it within a couple of days so its far less of a risk to them, so they can offer more to trade in)

We'll just need to disagree on this one

 

[r0wly86]

You blatantly don't understand the points slab and gb72 are making.

Second hand stock is not profit or cash, you can't pay rent or staff with it.
Second hand club is taking up shelf space that could display a brand new driver with a better margin.

No I perfectly understand the point, I agree with the points they are making.

My point is asking the question what is AG's USP?

They are not the cheapest, and in this scenario are quite a bit more expensive, they don't have knowledgeable staff to help you, and now they don't offer a good price on trade ins.

Most golfers looking for a new set will be wanting to sell the current set to part pay for the new set. Golf clubs are expensive after all.

If AG are consistently well below other seller in PX terms then they will continue to lose business. They lost the OP's business and I doubt that is a singular incident.

My point about the 2nd hand clubs is that they could sell them online like golfbidder, ergo not taking up shelf space. And Man In Black pointed out that they do have an eBay shop for second hand gear anyway.

Yes second hand golf gear isn't cash so can't pay overheads, but you know what also isn't cash, not making the sale as the customer can get it cheaper or better PX deal elsewhere.

It seems in this case you take the option on the PX clubs, make the sale, make some profit and give yourself the potential to recover the whole profit/make more profit by selling the 2nd hand clubs. Or you make no sale, no profit and have no potential to make anything more.

How many missed sales will it take before it starts biting their business

 

[Bunkermagnet]

Do you not thnk that the previous suicidal PX deal they were doing before has set the rules for the new owners and can you blame them?
I personally don't think them doing PX will harm them, no-where else on thie high street does PX so why should AG, that is a specialist sale line and field with all the inherant risks that come with buying used.

Its just a shame that MiB and his mate hadn't talked because otherwise both could have got the deal they wanted