If you are familar with the golf equipment scene in Singapore, you would probably heard of Golf Direct. Managed by the former team from now defunct Golfers Network, Golf Direct has been rather aggressive in pricing their products since day 1 they started, sometimes to the extent of selling below the cost which the local authorized dealers could get from the brand owners and distributors.
The low price high volume business model throught regular golf sale seems to work well for Golf Direct. Started with just one outlet in Kakit Bukit in 2009, it has now grown to 3 and taken the local golf retail industry by storm. Golfers are happy now that they have one good option when considering their purchases. Unfortunately, their success also means that the other retailers which follow the conventional business model of buying from brand owners or authorized distributors are hard hit. Among the hardest hit are brands such as TaylorMade, King Cobra and Callaway. More information of their sale can be found on the following link: http://singapore-promotions.com/sports/golf-direct-new-year-sale-offers-1-9-feb-2013-57711/attachment/golf-direct-1-feb-2013/
How do Golf Direct manage to sell at such a low price and yet substain it's business ? Are the equipment authentic ? These are the questions which golfers sometimes wonder. I analyze their business model and I think there are 3 main pillars supporting their success:
(a) One of the key success formula I believe is their excellent network of business partners who are able to supply them the items at an attractive price. The current Golf Direct team are formerly from Golfer Network, which has been in the sports and golf wholesale, export and import business for many years. The team could easily ride on their past network to bring in the supplies.
(b) I don't believe they could make a lot of margin from the branded products which they bring in and sell in their retail outlets. Golf Direct do have their other house brands like Giga, Slazenger, Dunlop and accessory products such as gloves, shoes, bags, apparels which they retail in Singapore and distribute in the region. That will give them the margin to substain their business. By using the branded products and the regular sale as lure, Golf Direct is able to build a brand name for itself and expand its network and contact further.
(c) And finally, in order to do this business at such a scale, Golf Direct needs to have the funding, which I believe they have. 5 to 10 millions dollars is probably the minimum needed to run this business.
Whether their products are authentic, I think the answer is obvious. Will any sensible business person spend millions of dollars building a golf business selling counterfeit golf clubs especially in Singapore where intellectual property rights are well protected by the laws?
Every year, there would be on an average of 2 new golf shops entering the smalll, saturated and extremely competitive golf retail scene in Singapore . Incidentally, there would be on an average of 2 golf shops turn belly up and exit the industry, Golfer Network, Grand Bigwin, Golf Zone, Heritage Golf, Golfers Place, just to name a few. I believe in order to survive in this cut-throat competition, one has to be innovative, resourceful and constantly looking out for new opportunities to create their own niches, just like what Golf Direct has done!
