The United States may be the center of the ball manufacturing business, but an event on the other side of the pond made waves in early 2015.
The German Golf Association, the umbrella organization representing over 800 golf clubs in the country and responsible for league competition among German amateur golfers, is an important organization for ball manufacturers and had an official golf ball sponsorship deal with a big brand.
That is until the Association shockingly announced that it would have a new ball sponsor for 2015 and 2016. Instead, it would be…Vice Golf? A three-year-old company that only sold golf balls online?
“Golf needs some change, everyone’s searching for the new thing, the new 2.0,” said Vice Golf co-founder Ingo Duellmann. “That’s probably what was what they were searching for in the GGA, something new with edges and someone who was willing to do something different from the traditional brands.”
Vice Golf remains on as the Association’s official ball sponsor through 2016. And it’s the latest win for a company that has made in roads quickly in the golf ball manufacturing world in a unique way.
The financial investment in golf can add up quickly, and it doesn’t help when your local pro shop or sporting goods store sells golf balls, an essential part to the sport, at $50-60 a dozen.
Vice Golf, based out of Germany, has stepped in to bring complexity to the market, adding a new model into the old, establishment golf ball manufacturing business.
The company, founded by Duellmann and Rainer Stoeckl in 2012, sells golf balls through its website vicegolf.com. Consumers buy the company’s balls online and the goods are shipped directly to them, so Vice avoids dealing with the middlemen that characterize the rest of the business.
The Point A to Point B structure means no price markups, and thus a cheaper ball that Vice markets as having the same quality as the big brands.
While the balls from these giants will sell for the $50-60 per dozen after the middlemen raise prices at each point of the process, a dozen Vice Pro balls can be bought for $34.95 directly on the company’s website, and the price drops to $24.95 per dozen if a consumer buys 60 Vice Pro balls at once.
The Vice Tour model sells for $21.95 per dozen and $15.95 per dozen at a 60-ball purchase. The Vice Drive model starts at $14.95 per dozen and drops to a $10.95 per dozen price tag at 60 balls.
Stoeckl and Duellmann said that they try to keep their prices 40-50 percent below the big brands while keeping the ball of the same quality.
This has resulted in steady growth. Vice Golf increased 100 percent in sales in 2013 and jumped up 167 percent from that number in 2014. The staff nearly quadrupled in full time employees in that span, and customer satisfaction is high.
Stoeckl and Duellmann said that others are taking notice of their new movement in the golf ball manufacturing market, the nix-the-middle-man-and-pro-shop model, even if these other guys can’t feasibly join in.
Stoeckl and Duellmann met over a decade ago while studying law at the university level. Both would become lawyers. Duellmann worked for a sports company and dealt with business development in U.S. and Asian markets, while Stoeckl was in a business consultancy company where he did many projects in sports. Stoeckl had serious contact with manufacturers, and on one project in particular, he saw the cost structure of golf ball pricing.
Despite the steady jobs, their immersion in golf was growing and by 2010, they were hearing consistently from family and friends the complaints over exorbitant prices around golf balls.
“And at that time four or five years ago, all these direct-to-customer concepts popped up,” Duellmann said.
With that impetus and their interest in golf, Duellmann and Stoeckl started looking into ways to get into the golf ball manufacturing business on a direct-to-customer basis.
“We thought manufacturing golf balls would be an easy job,” Duellmann said. “We thought we could skip out on our lawyer jobs and have a good time and not work so much. It turned out to not be that way. Instead of working less, we actually work more than we ever have before.”
The duo started part time in their garage and hunkered down from there.
It took them about a year and a half from the conception of the company to when they sold their first batch of balls, a 50,000-unit set. To get to that point, they worked with testing labs in San Diego and Germany and collaborated with engineers at a technical university in Munich. They went through hundreds of prototypes to get to the quality of ball they were looking for.
In the end, they came out with three models in the Vice Pro, Vice Tour and Vice Drive.
Stoeckl and Duellman compare the Pro to the Titleist’s Pro V1, saying that the ball is a three-piece model that is most useful for low handicappers and pros who want a ball that stops quickly and generates max spin in the short game. The Pro comes in several versions, including the Pro Neon, Pro Shooter and Pro Flamingo, each offering a different color ball.
The Tour model is generally for single digit to mid-handicappers who want a three-piece ball that rolls more. The Drive two-piece ball usually works best for high handicappers who want a lot of roll and a more durable ball.
And Vice Golf will unveil a fourth model in April 2015: the Pro+.
“We compare [the Pro+] to the Pro V1x,” Stoeckl said. “It’s a four-piece ball, a cast urethane ball. It’s a really green grabbing ball, but takes less spin. It’s a little bit harder and it flies lower.”
Stoeckl said that they came out with the Pro+ because customers wanted the feel of the Pro model but with less spin and a lower trajectory on drives.
And that’s another perk of the way Vice Golf does things as opposed to the establishment methods: They only report to the customers.
Part of the business model of the biggest golf ball brands is get tour players to use, and thus advertising, their balls. And dependence on selling balls in pro shops means a greater need for more frequent updated models, so that pro shops will clear their old stock to buy newer and (sometimes barely changed) versions of the same ball.
Vice Golf has neither of those worries. They hear from customers and have gotten positive feedback from some professionals who have used their golf balls. The company currently has a few professionals who play their balls, namely Camilo Sprinz and David Gerszstein of Europe’s Challenge Tour (the equivalent of the Web.com Tour circuit). But they have no official sponsorships with players, as they pride themselves on not spending that money.
Vice Golf does have some business in pro shops, but not in the traditional way.
“We don’t have sales reps going to pro shops and selling our balls,” Stoeckel said. “It’s just the pro shops who read about us and found our balls and wrote us and asked us if they could buy them online.”
These direct-to-pro shop sales account for less than 10 percent of Vice’s business, and the lack of sales reps means no extra costs and speaks to the lack of dependence Vice has on pro shops for revenue.
As Vice lacks these significant expenditures, they’ve been able expand their business.
The company mainly sold its balls first in Germany than in the rest of Europe for the first years of its existence, but added Australia to the mix last year and the massive United States market in 2015 due to high demand in those places.
Vice’s website promises 2-to-3 day shipping, and Stoeckl and Duellmann say they can indeed do so to any place in the world besides China, thanks to the logistics facilities they set up in Australia and Buffalo, New York when they incorporated these new markets.
In addition to new markets, Vice offers more than just normal golf balls.
Based off consumer feedback, Stoeckl and Duellmann implemented a customization feature to their golf balls a year into the business.
The customization on the golf balls can be wide ranging, from company logos to photos of birthdays and group trips to humorous printed phrases like “You found this ball, bring it back to the clubhouse,” and even a depiction of a pixelated naked girl (seriously).
There are limits (nothing crude and no trademarked properties), but Vice has cast a wide net on customization and now see 50 percent of its golf ball sales come from this department.
The key has been minimal extra cost and inconvenience, and a simple process to add your customization.
“It works really well,”Stoeckl said. “We have a really automized configuration for that feature: you upload your pictures, fill in the text, upload some photos, and we print them. And it takes just one day longer than without customization.”
Vice isn’t done there either, with the release of a golf glove called Vice Golf Pure to come this year. The company also sells golf caps, and has found great success in their limited edition offerings. It started at the major championships last year, and the special caps sold out within hours.
Later, they released a limited-edition camo Ryder Cup cap, where a closer look showed the camp to actually be an outline of the Gleneagles layout.
Those hats sold out in minutes.
Stoeckl and Duellman said they plan to offer new versions of the major championship limited edition caps in 2015, with their release dates the weekend ahead of the each of the four tournaments.
The hat side of the business actually has less to do with money, than with branding. Vice has increased in recent years, as has general awareness for the company in the golf ball business.
But without the big name of “Titleist” or “Callaway,” Vice’s golf balls still face speculation even as the market share grows.
“A big challenge is to really create a brand,” Stoeckl said. “People want to also buy a brand, especially in golf where there is big brand loyalty. There’s a challenge to convince people that our ball is the same quality.”
Ultimately, Vice has found its niche in the market and while it anticipates more growth and represents an alternative to the big brand model of business, the goal isn’t to challenge the Titleists of this world.
That being said, Stoeckl and Duellmann do expect pro shops to focus in future years more on helping people finding equipment, and thus less on golf ball sales.
Does this mean Vice Golf is ahead of the game? Maybe or maybe not. But watchers of the golf ball category are taking notice.