Everyone, I hope, has heard that the Kirkland Signature Golf Balls are back in stock. They have been released mainly in the mid-west and will be coming to a Costco near you. Estimated dates are early May for the East and West coasts, though some stores already have them in stock.
Lets examine the impact of the K-Sigs coming back:
This recent development is excellent news for the average golfer. The Kirkland pricing/performance metrics allow for the average golfer to spend more money on other aspects of golf. Instead of paying $100 for 24 ProV1’s you can pay $33 for 24 K-sigs (with virtually the same results).
That means you have $67 more to spend on a nicer course, more rounds, or more gear. Say you lose 3 balls per round, not a bad estimate. every 8 rounds you’re saying $67 dollars. What can you use that $67 for?
- A Polo from Torrey pines-$59.00 on the high end
- Your favorite sports team ball-mark/repair tool for $12.99 plus a Bethpage Umbrella for $49.99
- Some Patriotic headcovers-$59.00
- A Costco Membership-$100
I would rather spend my money on those items than just some golf balls I’ll eventually lose.
So basically we have established the K-sigs are a phenomenal deal for the average golfer. But now how do you get this awesome deal, well here is the catch. Costco, in my estimation, will only release the ball in stores. If you remember back to December they offered the ball online and it sold out in 30 minutes. Why is Costco only going to release the ball in stores? To drive membership. Costco’s business model is as follows: razor thin margins (5-15%) combined with high subscription numbers. Releasing the ball in stores instead of online is going to drive people to get a Costco membership, at least that is the plan for Costco.
Long-term we do not know what will happen with the golf ball industry. Will K-sigs bring down the industry’s market price? Will Titleist stay at the $50 price point and rely on brand loyalty? If people do switch to Costco K-sigs what will happen to the Titliest bottom line? Will they have to limit sponsorship because they do not have enough money to go around? Will more people play golf because it is cheaper to play, in aggregate?
This is an interesting time for the golf ball industry and as a player I am excited for a cheap high performance ball. As a fan of golf I’m not sure what long term effects this will have.