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
I come from a long line of career military men who made pin money buying cheap and selling just a little cheap from a few continents. Is it really such a big deal they can't buy clubs to resell in Seoul?
I suspect customers had to send in receipts when requesting some kind of warranty coverage. If they've decided to check those receipts against their pricing policy, the discounts would become obvious without someone being a narc.
However, I agree with the sentiment.
Karsten also supplies parts for the Patriot missile and to the helicopter industry.
http://biz.yahoo.com/ic/46/46982.html
This seems like a foolish decision by a company that supplies materials to the defense industry.
I suspect this is going to come back an bite them hard.
Ping was losing zero money. The retailer was discounting his profit.
Ping gets their money when the store pays their invoice.
"I suspect customers had to send in receipts when requesting some kind of warranty coverage."
Ahh i see, good call!
That's the screwy part... Ping didn't lose any money. The store buys at wholesale from Ping, and subsequently owns the merchandise. The store then discounts 10% off of the retail price, which cuts into the store's profit.
Ping loses no money, unless they get stupid and pull the accounts.
Of course, they got stupid (and apparently got stuck)!
I think you're right. The military aspect of this is a red herring.
Ping putter, 30 years. Wadded it up and launched it into the back 40.
Blades - but first you have to hit them. Thats why 95% of us do not use them something to do with the sweet spot.
I agree. That was my first reaction too. Ping's action has nothing to do with discounts to military personnel.
It has everything to do with discounts that are in conflict with Ping's stated policy.
I hope you called Ping after you pitched your putter.
Please see my post 55 This is how it was taught to me at B school back in the early 70s and my memory of the court rulings in the 80s. It may have changed since, but I don't think so.
A traitor PING....
Gotta love it... They are free to do it, but the publicity backlash from this is going to hurt them far more than their desire to ensure that their products NEVER sell at a discount....
Gotta maintain that mythos that we are actually something more than a Golf club....
Idiots.
I agree with that as well.
Reminds me of the old bureaucratic adage, "There's no reason for it. It's just our policy."
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