[David Harshbarger]

We do really appreciate when you guys buy from us. We put a lot of time trying to find merchandise that our members and guests will like. My club keeps pricing low so we can pass on value to our members and their guests. Even though we sell equipment for the lowest allowed price by the manufacturers we still lose business to the big box stores. Some members do not realize how well we know there games. We will fit you for free and find something that will really help. We can't rip you off because we have to stand behind our sale. We will see you all the time. Support your local shop. We take pride in our shops.

+1

[Joe Sponcia]

Mr. Johnson,

You said, “Yes.   I probably spend more because of Mill River, but it is NOT a good program.  As a result, the pro shop carries very little merchandise and turns into a mail order business.  I would not recommend it”.

My club had one before I was there and it was mismanaged by the pro at the time.  Three clubs in town have them and I like the concept, but to your point, two of the three have almost no selection, and work as a quasi mail-order outlet, while the other has a healthy supply of clothing/bags, putters, wedges, and a few drivers and hybrids...and NO IRONS (which is smart).

With normal mark-up, a Mill River plan or buyers club, after charging the member $100, is a good deal....only if you spend upwards of $500-600.  That is break-even best I can tell. 

To answer my own questions:

1. Probably $500.  Mostly gloves, balls, and a few shirts and a pullover.  I did get a new bag this year so my number was a bit higher than normal.  I buy quite a bit from our local Edwin Watts store, especially used clubs.  They usually have a great selection and the staff locally is fantastic.  My club can’t spell launch monitor, and as such, can’t help me with shaft/proper club specs. 
2. Change the logo.  It is hideous.  It has the obligatory shield, always placed on the left breast, 2-2.5 inches in size, has our clubs name spelled out, and the date we started.  It has to be one of the busiest you will ever see.  Clubs have no idea how bad an ill-designed logo hurts them in my view.
3. As I discussed, we do not have a buyers club or Mill River plan, but I would use it alot.  I WOULD treat it like a mail-order catalog.
4. I do feel a need to support the club with purchases, however, our pricing has always been on the high side compared with other clubs in the area.  On the other hand, we have traditionally not been competitively priced.  I hate to ask for a discount or to price match at the club, but have no problem at EW.  I guess it is perception?

Mr. Johnson you also said,

“It is unfortunate that some staff's key financial remuneration is dependant on selling things.   I'd rather you raise my dues $40 a month and give the staff a raise than asking me to support a business which is not competitive.

An examples -- a former club of mine used to have a beautiful formal dining room, which was used 3-4 times a year.   It was a money pit.   Instead, we tore it down and replaced it with a less formal room with a pizza oven, pasta bar and great views of the 9th and 18th greens.

Same goes for a pro shop-- if it doesnt do much business,  reduce its size and reallocate space to something that does.

I know in my club, the pro shop does 50%+ of its business on Monday outings.  That's fine, let it make some money and reduce my dues”.

I would rather pay a little more on dues as well than feel obligated to pay more than I “should” for merchandise I could easily buy for less at TGW. 

I believe the Pro Shop should be run as a service for the members, and not a high margin profit center.  It is too easy today to buy discounted clothing/goods online these days.  I also believe the Pro Shop is or should be viewed as a marketing arm for the club.  The club should make it easy for members to wear club logo’d merch, and have a decent enough price/logo that out of towners/monday outing guests will want to purchase a memento.

[Mark Johnson]

Joe,

My point about Mill River is not from the member's point of view, but for the club.   No arguments that Mill River will benefit many members.

However, the club ends up losing (which ends up driving fees elsewhere.)

Think of it like this, assuming that Mill River program is running off a 15% margin/markup.

To get $100,000 in sales, under normal conditions, this will cost you $60,000 in merchandise; under mill river, it is $85,000.

Under a normal scheme, if an item isn't selling, then you can significantly mark it down.   Under Mill River, to do so  you are doing it at a loss.   This impact is exacerbated at seasonal clubs (e.g. north of Mason/Dixon) where you are closed for 4 months a year and there is even more concern over write offs.

What happens as a results?  The Pro Shop will stock significantly less merchandise due to concerns over marginal losses on products.   All the clubs I have seen this occur at have turned into predominantly mail order businesses.  Very basic merchandise is stocked for guests/impulse buyers, but the overall quality and selection goes down.   Maybe this ends up being the best thing, but membership should be aware of the trade off.    If you want your pro shop to offer a very wide selection, then dont adopt Mill River.

[Joe Sponcia]

Mr. Johnson,

That is the crux of the situation and what I was hoping to glean from the conversation:  Which is best (which of course is subjective)?

The 40% mark-up in 2011 is the issue.  It is far, far out of line, and members will only do so because of a $1-2 upcharged logo placed strategically on the left breast or my preference, sleeve.  That is a lot to ask for some people.

I don't know that the club can't profit the same dollars in the end:  Mill River vs. 40% mark-up.

When you mark-up 40%, you, in some subtle or not so subtle way train the membership to wait until a sale.  For how long?  A season or two?  Is that an acceptable timeframe for inventory turns?  I don't know, but it is money tied up, that will more likely sell after a 25% sale or buy one get one half type offer.

I am asking what the pro's and con's are of holding inventory longer because you are trying to make a higher margin, simply because of a small or in my clubs case, not so small logo, when TGW and such, sell for much less.

I am more inclined to think as I stated before that the pro shop is a service of sorts for the members.  Selling 150k at a cost of 120k, with profit of 30k works out mathematically the same as selling 300k with a cost of 270k (at 10% above cost) or with sales of 250k at a cost of 212k (15% margin).  What we are talking about is a meager $30,000, which at 80% of the clubs in America equates to 6 members. 

I would rather make 10k less and have my members decked in club logo'd merch than worry about making an extra 25% which only 10% of the membership supports when new stuff arrives and the rest picks through on the sales rack.  I would love to hear more of your thoughts though and appreciate greatly the dialogue.

[Mark Johnson]

Joe,

From my perspective, here is the key question for y'all?   What % of your pro shop business is done by members vs. from guests or Monday outings?   What % of your softlines actually have your logo?

I think these answer will drive alot of your decision.   If you guys have tons of Monday outings, then you can justify a wider selection (especially on the softliness side) and the mill river program can work.   If not, then I would highly recommend against such a program.

One more thing about your math joe.   You are using just gross margin and not Net (including writeoffs, etc).

No matter how efficiently you buy, there will be more writeoffs on $300k in sales.   The two profit scenarios are not equal.   Some of these will be made up by the fixed fee on the program, but probably not enough.

[David Harshbarger]

In regards to membe vs. guest/outing sales, do member discounts work in these types of shops?  For example, if members get a standing 15% discount on soft goods, expendables, And the like, does that provide a good balance of rewarding members as a service to them while also maximizing added revenue on the outside traffic?

[Mike_Trenham]

Does anyone know of a club with a Golf Shop minimum?  I have long felt one is needed if you have one on food, heck it would be good for the club even at Mill River gross margins the profit is much better than on food.

[Jay Flemma]

I can't help you much with those qs, but I want to throw out my support to the guys who have supported me...I am 1000% behind mine!  Hank Furgol of Valley View Golf Club is a fine teaching pro and a great guy.  He's especially gifted at teaching the short game...plus he's downright jovial, with one of the deepest most robust laughs you ever heard.  He makes everyone around him smile with his rapier wit.  Plus, did I mention he's a great short game teacher?  He straightened out my putting in one sentence.

My old pro Bernie Hercig of Hiawatha Landing is a prince of a guy...patient kindhearted and bright.  He's a pros pro and great asset t the ranks of PGA Head professionals.  

http://jayflemma.thegolfspace.com/?p=1987 (great pic of Ed Furgol after he won the 1954 Open!!

Then there's the legendary Laurie Hammer - http://jayflemma.thegolfspace.com/?p=3410

[jeffwarne]

Does anyone know of a club with a Golf Shop minimum?  I have long felt one is needed if you have one on food, heck it would be good for the club even at Mill River gross margins the profit is much better than on food.

Southampton GC has one -just used mine yesterday

The bottom line is golfer's expectations of what a club should provide are going to have to change in many/most cases.
The idea that a club needs a large banquet area, dining,a plush lockerroom, a bar, and a "fully stockd" pro shop are what drive up the costs of playing GOLF.
In many cases it's just not practical.

I love courses where the bartender takes your green fee and the lockerroom is 10 x12

[Mike_Trenham]

It is going to take private owners to change the model member run clubs are too risk adverse and slow to move they are always 15 years behind.

I want a Mill River plan for golf instruction, say $200/250 a year and every Few days there is time allotted with a professional on call wandering around giving tips/advice not full service lessons.  Usually I just need a kick in the right direction, with my stance, ball position, grip or alignment.  They would also spend time arround the short game areas helping with the really important part of the game.  Additional spot compensation of a few bucks extra for the lowly paid assistants would be encouraged.

[ChipRoyce]

Gentlemen,

I am currently assisting my club in hiring a new Head Professional.  One of the area's of concern was pro shop sales/lessons and how we are going to help the new pro increase both areas.  I was wondering several things and was hoping for your assistance:

1. How much annually do you estimate you spend with your pro in lessons and pro shop merchandise?  If you don't buy much in merch, where do you buy it?
2. If you don't spend much, what would have to happen for you to start doing so (i.e. pricing/likability/trade policy, etc.)?
3. Does your club offer a "buyer's club" where you pay $100-200 up front and get all goods at cost + 10% or something similar?  If not, do you think the idea is appealing enough, that if you had it, you would spend more?
4. Do you feel obligated in any way to your club pro either because he goes out of his way to help you, or simply because you are a member and members should support their club pro?

Thank you in advance for your responses.

1. Around $300, all clothing or gifts.  If clubs, purchased new or used via ebay. Grips / repairs at golfsmith
2. Hard to say - I don't usually buy the newest and greatest so tend to purchase last year's stuff on discount via e-bay
3. No, but would do so
4. Not really. Like the pro and his team, tip them well for xmas and take 2-3 lessons / year from one of the assistants. I think they could do more incl. helping arrange rounds when traveling and the like. I think there's a fair exchange right now.

[Kin Britton]

1. I probably spend around $1000 (probably much more but scared to add it up) in merchandise from my pro.  Unless I have credit won elsewhere, I buy clubs, balls, shirts, grips, spikes etc from pro.  Don't take lessons from anyone.  As a testament to the value, I cracked the face on my Rapture V2 driver.  While I may have been able to get help from an off course retailer, my pro sent to Ping and they are replacing at no charge.  I bought from the Pro at Demo Day.  Another thought, our Demo Days are some of the best attended events we have. No idea what a Pro makes at demo day.
 
2. I have often thought club pros could take some of the ideas from off course retailers...more trade-in's etc.  I have not noticed huge price differences.  One thing, our pro does is offer to break up a large purchase over 2-3 billing periods.

3. No but an interesting proposition

4. I try and support him because I think it is an obligation as a member.  He also does a good job on the service side.  Toughest part is clubs, always want it when you have paid for it.  However, I think too many players amke the mistake of buying what is in stock (even big retail operatiosn have limited options) versus what truly fits.

[Jason Topp]

1. How much annually do you estimate you spend with your pro in lessons and pro shop merchandise?  If you don't buy much in merch, where do you buy it?

$600-$800 - I now buy most of my stuff from the shop.


2. If you don't spend much, what would have to happen for you to start doing so (i.e. pricing/likability/trade policy, etc.)?

I really liked a program started last year where the pro offered 4 dozen balls for the price of 3 - personalized.   It got me in the habit of buying there.  The biggest downside for me is that I do not like his tastes in clothing.

3. Does your club offer a "buyer's club" where you pay $100-200 up front and get all goods at cost + 10% or something similar?  If not, do you think the idea is appealing enough, that if you had it, you would spend more?

We have it but I do not think it influences my buying decisions significantly. 

4. Do you feel obligated in any way to your club pro either because he goes out of his way to help you, or simply because you are a member and members should support their club pro?

Yes - both.  I do think, hiowever, that the shop needs to earn the business by providing superior service.  That challenge is not too difficult given the experiences I have had at big stores and the familiarity the pros in the shop have with my game. 

The biggest issue that has turned our shop around has been inventory control rather than increased sales.  Some members do not like it but I would rather have our shop make money than lose.

[David Lott]

The pro does all he can to make your golf experience a good one. You should buy your golf equipment from him as a means of appreciation. I buy clubs, balls, hats, gloves, shoes and all other golf equipment through the pro shop. The prices are reasonably competitive even if not the lowest always, and they take care of you if issues arise. It should not matter whether the club or the pro "owns" the shop. If the club owns the shop, the pro is still evaluated on how well it does.

We have a great pro--in fact in nearly 60 years as a golfer, I've never seen a bad one. Someone else has winnowed out the clunkers before they get to me.

Golf pro is one hell of a hard job. Support your local pro all you can.

[Jamey Bryan]

Before I answer the original questions, I must share a very recent experience of a fellow club member....

Member reads all the hype surrounding the new Taylormade drivers....
Member plays three rounds with a Demo burner from the pro shop
Member goes on EBay and buys a Burner for $210
Club was counterfeit, has a spaghetti shaft, and is worthless.
I have no sympathy, if fact feel he got what he deserved.

I should say to begin with that I'm sure I'm an outlier in this regard!

1.  I probably spend an average of $1500 to $2000 per year in our pro shop.  All my balls and clubs, and I try to buy some soft goods there.  I feel somewhat guilty that I'm not buying more soft goods as I've been buying more shirts and hats at "foreign" clubs I've been fortunate enough to visit.

2.  Not  really applicable.

3.  N/A

4,  Absolutely.  Our pro goes out of his way to get us access to other courses,  quick tips on the range, etc.  I'm going to support him in every way I can (he does own the shop).

I should note that our pro has suggested that members buy shoes on-line, as he can't see the sense in stocking those.  He'll happily order anything (which is what I've done) and is competitive when he does.  Irons he'll fit and order, but does not stock.  My only problem is with a specific hybrid which I think I want but would like to hit prior to ordering......   trying to get a demo day scheduled.

Jamey

[Pete Garvey]

I take lessons from my Pro or an assistant as needed.  I buy almost everything from the shop.  My main complaint and what causes me not to, is delivery times.  I don't want that new driver in a month i want it yesterday.  So occasionally my equipment comes from elsewhere.  I buy almost golf and everyday clothing, golf and dress shoes from the shop, pretty much all my balls and bags.  I would call myself a strong supporter spending several thousand annually.  Interestingly lots of members go to the local golf galaxy as our old assistant works there even though cost are the same. 

I was also taught when you play a course via Pro to Pro curtosey, you always make a purchase in that shop out of respect and to be sure you can play it again when you want or need to.

As a Pro it's hard to have everyone like you and have everyone support you.   It as much as anything comes down to what is the club unwritten policy.  Sort of what the peer pressure dictates.  At some clubs buying stuff elsewhere is a stigma others its mainstream.

My experience is that you have to be a excellent merchandiser or have a very supportive membership to have a good shop.  Likely both.  Margins continue to fall in golf equipment.  When a pro brings in 4 drivers and is left with one at the end he is break even with the profit being what he can unload the 4th with not a lot of margin there.  The Product cycles like Taylor Made has makes it even harder, the driver he paid full wholesale for in the beginning of the season has been replaced by something else and it's retail price slashed within the same season.

The sucess I have seen is concentrate on the spenders, carry what they want.  While others may complain maybe that the shirts are too much or whatever they have to remember its not a service but a business.  Members assume Pro's make much more than they do in the shop.

A factor is you have to look at spending history of the membership.  Margins aren't  large on most items so the Mill River Plan what the pay a fee and buy at 10% over cost is called requires the member to spend say $700 plus to make that a good investment considering the up front cost.  An option that I have heard is to include the fee in the dues and make it a benefit of membership with the money going to the person who holds the financial liability for merchandise.

Other things you can do to boost the Pro's opportunities is require outing to buy an x dollar a player in certificates, pay all club league and club tournament prizes in credit, have weekend daily games where money is paid in and credit is given out.  Make sure member guest gifts are pro shop ordered and have margins, too much nowadays to control costs Pro is doing this gratis. 

A lot of what can be done is club specific as some places don't want the Pro always hustling for a buck and rather pay a larger upfront salary.  Another thing is does the club want the Pro to play with members and build stronger relationships or sit behind a counter.  Playing with meme is best but there is a cost involved.

As far as lessons have beginner clinics, ladies clinics, maybe men's clinics although I haven't seen much sucess in men clinics.

In the end in my area upstate NY Albany area is seems to me the job isn't what it once was, less money more work and less golf.  There was a day when the Pro had a monopoly on equipment, got the cart revenue and range revenue and it was a pretty good gig, seems to me for the most part those days are gone at most clubs.

Another important factor is does credit expire yearly, it needs to for both the pro and the clubs benefit.  Lowers risk for both.  If your pro quits in the off season members think the club still owes them the credit etc.


Dan

Dan,

From a PGA head pro and shop owner, thank you!

PG

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