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Why don't more companies follow the K sig example?


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#1 TheGolfingFirefighter

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Posted 08 October 2017 - 10:52 AM

If Titleist would have released the Avx at the same price point of the K-sig, they would have sold like crazy. Same with the Q star tour. I know many people who look for a great deal on a urethane ball. Why won't companies listen?

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#2 KYMAR

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Posted 08 October 2017 - 11:00 AM

Marketing budgets.
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#3 tdk8180

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Posted 08 October 2017 - 11:29 AM

For the same reason you dont take a job for 60 percent of what you are making now.  The price point of 45 per dozen has been set.  Companies dont like to make less money if they can help it.

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#4 Socrates

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Posted 08 October 2017 - 11:38 AM

Great example.  Find someone with a surplus of someone else's product.  Re-brand it and sell it as yours.  Then find another product, re-brand it as the same product as before and continue.  Not buying into the whole K-Sig hype.

So far the AVX is just a limited run.  No idea what it will really turn into or the final retail price or if it will go forward.  Guess I'll find out next week at the local PGA buying show.  Price point is odd though but no odder than the whole NXT line.
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#5 ZBigStick

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Posted 08 October 2017 - 12:08 PM

Not all Costco products are designed to make high margins, some are designed to get add-on sales or drive customers to their doors, which isn’t a strategy a company that wants longevity in the market is going to employ.
Vice and Snell make value urethane golf balls. Or you can buy last year’s models at a discount. Lots of options.

Edited by ZBigStick, 08 October 2017 - 12:09 PM.

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#6 Carp

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Posted 08 October 2017 - 12:15 PM

View Posttdk8180, on 08 October 2017 - 11:29 AM, said:

For the same reason you dont take a job for 60 percent of what you are making now.  The price point of 45 per dozen has been set.  Companies dont like to make less money if they can help it.
^^^^^
...however, my thought (on the consumer side of things) is, 'I know it doesn't cost $20 more a dozen to make more than one layer and put a urethane cover on it.'
Kinda like 'I know it didn't cost Honda $200 to make that plastic part I just broke.'
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#7 elwhippy

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Posted 08 October 2017 - 12:27 PM

The K-sig will appeal to a certain market. The V1 is a premium product. The majority of V1 users are OK with the price point. I know many players who refuse to even try Srixon or Callaway because they are absolutely convinced the V1 is always the best ball and must be magically different to other balls. They would actually mock someone using a K-sig.

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#8 daegyu

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Posted 08 October 2017 - 12:31 PM

Costco distributes and sells the balls they rebrand themselves which cuts out any middleman. Essentially, they control the supply chain from top to bottom. The other ball manufacturers in the industry are sold through online retailers and brick and mortar shops. The higher MSRP reflects the additional cut the retailers need to get. In the future if golf ball companies decide to implement a factory direct model then I'm sure prices will go down, i.e. vice, snell, cut, etc. I may be one of the few people who still enjoy going to these physical locations and holding products in my hands so I don't mind paying a few extra bucks when I do make a purchase.
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#9 ctay61983

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Posted 08 October 2017 - 01:54 PM

K-sig model isn’t sustainable. At least it hasn’t proven to be yet. The big boys would be foolish to conform at this point.

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#10 lil'mike

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Posted 08 October 2017 - 02:42 PM

If people didn't buy the Pro V's for $48 a dozen, Titleist wouldn't sell them for $48 a dozen.  They would be forced to lower they price!


Don't get me wrong I like the Pro V1's so I am not knocking Titleist but just like the Chrome Soft's more.  Both can be found on the used ball sites for much cheaper than retail in AAAA or AAAAA condition so that works for me just fine and most of the time they don't look much different then the new in box ones do!


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#11 Jc0

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Posted 08 October 2017 - 02:50 PM

View Postctay61983, on 08 October 2017 - 01:54 PM, said:

K-sig model isn’t sustainable. At least it hasn’t proven to be yet. The big boys would be foolish to conform at this point.

The K-sig model is only sustainable for costco. I doubt they make any real profit on these. Costco makes their profits on the yearly fees. Everything else is low margin or at cost.

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#12 jbsg02

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Posted 08 October 2017 - 06:53 PM

Selling at cost isn't a great strategy for most companies

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#13 tdk8180

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Posted 08 October 2017 - 06:55 PM

Vice Balls...the Vice Pro Plus doesnt go anywhere for me.  Major distance problem.

Costco has great deals on stuff, but you have to go all in with them to realize that value, otherwise your membership is a waste.  If you were lucky enough to even find K-Sigs, you could resell them for a stupid price.


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#14 sdandrea

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Posted 08 October 2017 - 06:59 PM

View Postelwhippy, on 08 October 2017 - 12:27 PM, said:

The K-sig will appeal to a certain market. The V1 is a premium product. The majority of V1 users are OK with the price point. I know many players who refuse to even try Srixon or Callaway because they are absolutely convinced the V1 is always the best ball and must be magically different to other balls. They would actually mock someone using a K-sig.

Even when they get beat by someone using a KSig? ;)
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#15 toc

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Posted 08 October 2017 - 07:00 PM

Didnt they get sued for making the ball? That could be a factor

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#16 Sean2

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Posted 08 October 2017 - 07:09 PM

A few years ago I read that a former employee of Titleist said the cost to Titleist to produce a dozen ProV's was $4.00. He further said that the packaging of the golf balls cost more than the golf ball production.

I don't know how true that is.
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#17 cardoustie

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Posted 08 October 2017 - 07:10 PM

Costco marks product up 17 percent ... off of cost

If they buy for 10 ... they sell for $11.70

I know premium balls have a small "retail" margin

Pharmacy retailers work off sell price ... so in a lot of cases the stuff they sell for $10 is on 80% margin ... ie they paid $2. (Rampant especially w private label products)
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#18 lil'mike

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Posted 08 October 2017 - 07:20 PM

View PostSean2, on 08 October 2017 - 07:09 PM, said:

A few years ago I read that a former employee of Titleist said the cost to Titleist to produce a dozen ProV's was $4.00. He further said that the packaging of the golf balls cost more than the golf ball production.

I don't know how true that is.

I remember seeing/reading something like this but can't recall the particulars!  I am surprised that if packaging is that expensive that they didn't come up with a different way to package.

Yeah I believe it doesn't cost much to produce a ball or dozen of them but they gotta pay all the player's and still make a bunch of money!

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#19 WidespreadPanic

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Posted 08 October 2017 - 07:29 PM

There are a lot of people who buy ProV1's because the price is so high. They only want to play "the best", the luxury items. They wouldnt be caught dead playing a KSig, even if it just as good, or even better.

Edited by WidespreadPanic, 08 October 2017 - 07:30 PM.

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#20 Shilgy

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Posted 08 October 2017 - 11:10 PM

View PostSean2, on 08 October 2017 - 07:09 PM, said:

A few years ago I read that a former employee of Titleist said the cost to Titleist to produce a dozen ProV's was $4.00. He further said that the packaging of the golf balls cost more than the golf ball production.

I don't know how true that is.
If that was true the Ksig would be $10 max and Snell or Vice type company would come in at a well below $20 retail price as well.
  What I would believe is that the base materials in a dozen cost less than $4.  Post above just mentioned marketing. You still have development cost, labor cost, machinery cost, shipping cost, taxes etc etc etc.

Edited by Shilgy, 09 October 2017 - 12:16 PM.

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#21 Jasonic

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Posted 09 October 2017 - 09:50 AM

View Postsdandrea, on 08 October 2017 - 06:59 PM, said:

View Postelwhippy, on 08 October 2017 - 12:27 PM, said:

The K-sig will appeal to a certain market. The V1 is a premium product. The majority of V1 users are OK with the price point. I know many players who refuse to even try Srixon or Callaway because they are absolutely convinced the V1 is always the best ball and must be magically different to other balls. They would actually mock someone using a K-sig.

Even when they get beat by someone using a KSig? ;)

Don't you know people that play titleist are way better ? C'mon just like BMW drivers. Never the ones driving like AHoles on the road.
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#22 jll62

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Posted 09 October 2017 - 11:14 AM

View Postdoublepar93, on 08 October 2017 - 10:52 AM, said:

If Titleist would have released the Avx at the same price point of the K-sig, they would have sold like crazy. Same with the Q star tour. I know many people who look for a great deal on a urethane ball. Why won't companies listen?

Your assumption is that the K-Sig price was sustainable. It was not. It was the result of Costco getting all those balls at a steep discount. If other ball companies could sell urethane balls for that cheap and still have sustainable margins, you'd have seen a company like Snell do it already.

People need to stop using the K-Sig as an example of how cheap urethane balls could be. It was a unicorn, and it only had that price because of very unique market conditions. As I've said many times, in the end the K-Sig was bad for the ball industry because it gave consumers an unrealistic price expectation.
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#23 North Butte

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Posted 09 October 2017 - 12:34 PM

View PostShilgy, on 08 October 2017 - 11:10 PM, said:

View PostSean2, on 08 October 2017 - 07:09 PM, said:

A few years ago I read that a former employee of Titleist said the cost to Titleist to produce a dozen ProV's was $4.00. He further said that the packaging of the golf balls cost more than the golf ball production.

I don't know how true that is.
If that was true the Ksig would be $10 max and Snell or Vice type company would come in at a well below $20 retail price as well.
  What I would believe is that the base materials in a dozen cost less than $4.  Post above just mentioned marketing. You still have development cost, labor cost, machinery cost, shipping cost, taxes etc etc etc.

That $4 figure sounds plausible as a marginal cost of the 100-thousandth dozen or something like that. Once you've developed it, marketed it, built out your production facility, paid for your entire infrastructure and been up and running for a while the cost of "one more dozen" does reduce down to little more than the cost of raw materials.

From my long-ago days in engineering school I seem to recall a rule of thumb that any large volume manufacturing operation ought to have a marginal cost of production less than 1/10 the product's selling price. Otherwise it's not profitable to spend all the investment up front. But that rule of thumb might have changed in recent decades as manufacturing gets leaner and margins thinner than back in the golden years!
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#24 Socrates

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Posted 09 October 2017 - 12:35 PM

View PostSean2, on 08 October 2017 - 07:09 PM, said:

A few years ago I read that a former employee of Titleist said the cost to Titleist to produce a dozen ProV's was $4.00. He further said that the packaging of the golf balls cost more than the golf ball production.

I don't know how true that is.
I would think that it is true, but that would only be the cost to make it once production is up and running.  You have to include into that cost of the ball, the cost of all the R & D, the cost of all the production plants, the marketing, the shipping, the product support (pro and amateur), and all the free stuff given to "players".

Edit: damn North Butte hit the send button about 10 seconds before I did.  Same message though.

Edited by Socrates, 09 October 2017 - 12:37 PM.

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#25 _Stormin_

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Posted 10 October 2017 - 11:51 AM

View PostJc0, on 08 October 2017 - 02:50 PM, said:

Costco makes their profits on the yearly fees.
No, they make a profit on the items that they sell. The MARGIN is up for debate, but that's going to be a factor of their negotiation with the manufacturer/distributor. They may profit a bit from fees, but for high volume buyers, the rebate actually is more than the fee. I got a rebate of almost $200 the past year.

View PostSean2, on 08 October 2017 - 07:09 PM, said:

A few years ago I read that a former employee of Titleist said the cost to Titleist to produce a dozen ProV's was $4.00. He further said that the packaging of the golf balls cost more than the golf ball production.
I have zero doubt that they spend more on marketing than they do making the damned balls. This is the case for almost every successful golf ball. Eventually someone will de-throne them at #1 in their retail space, but it's got to be one of the longest running streaks in sports.


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#26 North Butte

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Posted 10 October 2017 - 11:53 AM

View Post_Stormin_, on 10 October 2017 - 11:51 AM, said:

View PostJc0, on 08 October 2017 - 02:50 PM, said:

Costco makes their profits on the yearly fees.
No, they make a profit on the items that they sell. The MARGIN is up for debate, but that's going to be a factor of their negotiation with the manufacturer/distributor. They may profit a bit from fees, but for high volume buyers, the rebate actually is more than the fee. I got a rebate of almost $200 the past year.

View PostSean2, on 08 October 2017 - 07:09 PM, said:

A few years ago I read that a former employee of Titleist said the cost to Titleist to produce a dozen ProV's was $4.00. He further said that the packaging of the golf balls cost more than the golf ball production.
I have zero doubt that they spend more on marketing than they do making the damned balls. This is the case for almost every successful golf ball. Eventually someone will de-throne them at #1 in their retail space, but it's got to be one of the longest running streaks in sports.

If and when that happens it's going to take a truly staggering amount of marketing investment.
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#27 Snell Golf

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Posted 10 October 2017 - 12:17 PM

View PostSean2, on 08 October 2017 - 07:09 PM, said:

A few years ago I read that a former employee of Titleist said the cost to Titleist to produce a dozen ProV's was $4.00. He further said that the packaging of the golf balls cost more than the golf ball production.

I don't know how true that is.
I can tell you this is no where near the truth... not even close....

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#28 lspky_muskie

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Posted 10 October 2017 - 01:15 PM

I'd have to assume an American version of Vice doing distribution out of the USA or Mexico could get close to K-Sig prices on a 4 piece Urethane Golf Ball.  If you buy 5 dozen tour level balls you're paying $131.00 with shipping.  How much of that price is balls and how much of it is international shipping fees?

Edited by lspky_muskie, 10 October 2017 - 01:16 PM.


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#29 North Butte

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Posted 10 October 2017 - 01:21 PM

Does your order from Vice actually arrive in a box posted from Germany?

I'd imagine USA retail buyers are serviced by someone in this country but maybe not. Buying balls in Korea or Taiwan, shipping them in bulk to Germany then breaking out individual orders to be shipped to USA seems mighty inefficient for a low overhead operation such as Vice...
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#30 lspky_muskie

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Posted 10 October 2017 - 02:51 PM

99% sure they ship out of Germany, but I cannot find the tracking email from my last order.  I thought it was extremely strange when I saw that.


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