Posted on 09/28/2006 4:18:18 AM PDT by SeeRushToldU_So
Ping cancels accounts with local golf stores By David Westin | Staff Writer Thursday, September 28, 2006
A prominent golf equipment company's stance against retailers discounting its products has angered two area golf shops that give military customers a break.
Because of the military discounts, Bonaventure Discount Golf in Augusta and Gordon Lakes Golf Course on Fort Gordon no longer receive Ping products. And even if they could, they would refuse to sell them now.
Karsten Manufacturing Corp. of Phoenix, Ariz., which has a registered trademark on the Ping brand, discontinued its Bonaventure and Gordon Lakes accounts in August.
In a letter to the shops, Ping said Bonaventure and Gordon Lakes discounted Ping clubs below Ping's "Improved Fitting, Internet Transactions and Price Policy."
Both shops give 10 percent discounts to military members on all purchases. Gordon Lakes does it for active and retired servicemen; Bonaventure gives the discount for active servicemen.
Bonaventure owner L.D.Waters received his closure of account letter Aug. 7. Gordon Lakes head pro Bill Fumai got his letter Aug. 22.
Bonaventure does more than $5 million in business a year, Mr. Waters said.
"They cut off Bonaventure? That's huge," Mr. Fumai said. "If they cut off Bonaventure, they probably cut off a lot of shops. It must be nice to be in the position to cut off your customers."
Mr. Waters, a 77-year-old former Marine who served in World War II and the Korean War, started giving the military discount about a year ago when he noticed servicemen in his shop who were being deployed to Iraq.
"I'm doing it for those boys putting their lives on the line," Mr. Waters said. "I know they don't get paid enough."
"That's the craziest thing I've ever heard in my life, especially now," Mr. Waters said of Ping's policy. "It just burns me up that they won't allow the military to get a 10 percent discount."
Gordon Lakes, whose membership is 98 percent military, has always given discounts to active and retired military members, Mr. Fumai said.
Bonaventure and Gordon Lakes didn't hide the fact that they gave discounts to the military. However, along with their closure of account letters, Ping enclosed a receipt from a customer at each shop who received the military discount. That led to the cancellation of their Ping accounts.
"It's like the gestapo is back; they're checking receipts to see what we sell it at," Mr. Fumai said. In Augusta, where so many active and retired servicemen reside because of the proximity to Fort Gordon, Ping's move has struck a nerve.
"I've been doing this for 30 years, and this is the first time I've seen a company do this," Mr. Fumai said. "Why do they care?"
"It's something we put in place to protect our brand," said Bill Gates, Ping's director of distribution and associate general counsel.
According to Mr. Gates, no exceptions can be made when it comes to shops selling their clubs under the suggested price listed in their agreement (there is no contract).
"It's something we apply to all of our accounts consistently, and we don't have exceptions to it," Mr. Gates said. "We don't sell direct to the public; we sell to retailers, and we do have certain policies in place with them. Those policies are confidential between us and the account."
Mr. Gates did say that once a retailer buys Ping products, they own them, but must abide by their unwritten agreement with Ping.
If Mr. Waters and Gordon Lakes have been discounting Ping clubs to the military, why have they been cut off now, and both within 15 days of each other?
"It's something that's been in place for several years," Mr. Gates said of the no-discount rule.
"They have had it for years, but didn't pay attention to it because their business has been off," said Mr. Waters, who believes Ping is now enforcing the rule because "they've been hot the last few years."
Mr. Gates pointed out that Ping has more than 1,000 employees and has maintained its operation in the United States while other golf companies have moved overseas, where labor is cheaper.
"We think it is very important to employ Americans," Mr. Gates said.
None of that soothed Mr. Waters or Mr. Fumai, who believe an exception should be made that allows discounts for those with military ties.
Mr. Fumai was so angered when he got the letter from Ping that he took the "$3,000 to $4,000" worth of Ping merchandise in his shop and marked it down 50 percent.
"I sold it all," he said.
Mr. Fumai said when customers ask him about why he doesn't have Ping merchandise, "I tell them the story.
"They are shocked that they can tell us what price to sell to soldiers. That's terrible," he said.
When Gordon Lakes was cut off by Ping, Mr. Fumai called Bill Sport, the golf program manager for Army Sports.
"He said over half of the 63 military golf courses have been cut off," Mr. Fumai said.
Said Mr. Gates: "I understand the desire of Mr. Waters and the pride they (Bonaventure and Gordon Lakes Golf Course) have in being associated with the military, absolutely. Ping has the upmost respect for the people in uniform and all the sacrifices they make and their families make. This is not about any particular group."
Mr. Waters, who says he has about $100,000 in Ping inventory, plans to have a sale soon.
"I'm going to sell it close to cost," he said. "I'm going to unload them just to get the name out of here. I'm going to sell it until it's gone."
In Ping's account closure letter to Gordon Lakes, the company wrote that the account "may or may not be reopened in a year," Mr. Fumai said.
Mr. Fumai's not interested, and neither is Mr. Waters.
"If they're going to dictate what I sell to servicemen, to heck with them. I don't need them," Mr. Fumai said.
"I don't want to be put back on because I wouldn't have the product," Mr. Waters said.
It ends a 48-year relationship that Mr. Waters has had with Ping, which was founded by Karsten Solheim in 1962. Mr. Solheim died in 2000.
"Old man (Karsten) Solheim used to come in a store I had with my brother in Savannah in 1958," Mr. Waters said. "I've been doing business with Ping since Ping went into business."
Reach David Westin at (706) 724-0851 or david.westin@augustachronicle.com.
PING'S LETTER Excerpts from the letter Bonaventure Golf received from Bill Gates, PING's director of distribution and associate general counsel:
"Please do not call your field representative regarding the following ... When PING adopted the iFIT Pricing Policy, it unilaterally decided to close accounts that sell a PING product for less than its Blue Column Price. As a result, Account Number 16906 is closed effective immediately. ... Thank you for the time and effort you spent promoting the PING brand. We wish you the best in your future efforts promoting the game of golf."
From the Thursday, September 28, 2006 edition of the Augusta Chronicle
Incidentally, this is one of the main ways that WalMart and other huge chainsdrives smaller retailers out of business. For instance - my friend who was a Panasonic rep - they were (and are) having a hell of a time in Hawaii right now because Best Buy negotiated a huge deal through Panasonic directly where they get similar (to identical but renamed) Panasonic products but sell them for about or sometimes lower than the regular wholesale price. Best Buy can do this because they buy thousands of thousands of machines and can therefore negotiate a better price to buy and sell at than other retailers. But an independent retailer? No chance
IMO, if a shop owner BUYS the damn product from the distributor and wants to give the crap away, it's HIS OWN BUSINESS, the manufacturer and distributor got their price, they should just shut up before they ruin themselves.
Oughta go out on the fairway and break the shafts outa all my Pings - butcept I still play with Wilson Staffs.
It isn't.
The board needs to take action today. If the CEO was involved, he needs to be fired today.
The only way to stem PR disasters like this is swift action. HP is living this nightmare right now. Sosini (with Hurd) needed to clean house within 24 to 48 hours.
I was already, but then, I don't golf. Got enough expensive, frustrating hobbies. I will pass this one on to my a-day-without-golf-is-hell dad, though.
"Ping" is the sound a nine iron makes when tossed into a dumpster from about twelve yards.
d.o.l.
Criminal Number 18F
What a disgrace.
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