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
That's precisely the idea, professor.
You may be correct about getting people to buy products from companies with similar ideologies, but there is a huge difference between people who choose to defend this country and gay people. Service members choose to live a life far from glory with low salaries and far fewer rights than gays enjoy. They sign the line to accept life under the UCMJ- something (civilian) gays would never stand for.
I think the point here is that it seems to be directed against the military, not the pricing. Mr. Gates states there is an "unwritten" agreement- any businessman would know this is not the way business is conducted.
I don't golf, so it really won't effect my buying habits.
I knew about the no discount policy ping has, as I was looking at 4 sets of clubs the last 3 weeks. I overheard the salesman tell another person that they couldn't discount Ping due to this policy.
I was strongly considering buy Ping, Titleist, and 2 different sets of Cleveland Irons. I ended up going with the Cleveland CG4 Tours. Glad I did now.
Pastor Norton woke up Sunday morning and realizing it was an exceptionally beautiful and sunny early spring day, decided he just had to play golf.
So... he told the Associate Pastor that he was feeling sick and persuaded him to give the sermon for him that day.
As soon as the Associate Pastor left the room, Pastor Norton headed out of town to a golf course about forty miles away.
This way he knew he wouldn't accidentally meet anyone he knew from his church. Setting up on the first tee, he was alone. After all, it was Sunday morning and everyone else was in church!
At about this time, Saint Peter leaned over to the Lord while looking down from the heavens and exclaimed, "You're not going to let him get away with this, are you?"
The Lord sighed, and said, "No, I guess not."
Just then Pastor Norton hit the ball and it shot straight towards the pin, dropping just short of it, rolled up and fell into the hole.
IT WAS A 420 YARD HOLE IN ONE!
St. Peter was astonished. He looked at the Lord and asked, "Why did you let him do that?"
The Lord smiled and replied, "Who's he going to tell?"
bttt
Just because you cheat doesn't mean everybody else does.
Ping charges the same wholesale price to every retailer. What that retailer charges doesn't affect Ping at all. Apples and oranges.
It may be technically legal, but the negative PR will slap them hard. I hope some other club maker offers service people a discount and advertises against ping.
"They aren't price fixing, just trying to protect other retailers from the price wars."
~~
If I sell you a piece of merchandise for $200 and tell you that you can't charge a dollar less than $400, that is clearly price fixing.
It is not illegal.
In one sense you are right. Ping cannot make a contract that says you must charge this price and if you don't you will pay us $50 damages per sale. That could not be enforced. Once the store buys the clubs from Ping they have the legal right to sell them at any price they want.
Ping did not try that kind of contract. Ping said basically if you sell our clubs below our specified price we will never ship you anymore clubs. That is legal.
"Ping has the right to choose the retail price of the clubs it sells. Retailers can't arbitraily choose a group of people and give them special rates (well, they can, but not if they made an agreement to sell a product at a certain price). My friend worked for Panasonic and had to sanction retailers who were blowing out their products since they needed to control the retail price and having one or two retail outlets underselling everyone else wasn't fair to the other retailers who abided by the agreement."
~~
Ever shopped at Sam's/WalMart? The retailer bears the risk of setting its own price, the wholesaler has no say and should have no say.
Oh, they certainly have a right to do it.
That doesn't mean that we can't point out that they're retarded. :p
We have a winner!
"If I sell you a piece of merchandise for $200 and tell you that you can't charge a dollar less than $400, that is clearly price fixing"
No, it's MSRP.
The manufacturer is not required to sell goods to anybody. If they don't like the way a retailer prices, it's their choice not to fill the next order. I think it's bad business in this case, but certainly understandable in some situations.
Different retailers charging different prices for Ping products does hurt Ping. See my previous posts as to why...
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