Why Are Golf Clubs So Expensive?
Let’s face it…most of the good stuff in life is expensive (with the exception Reese’s Pieces, of course).
If you’re new to golf or recently started shopping for a set of golf clubs, you may be experiencing a bit of sticker shock. This often leads to the next logical question:
Why are golf clubs so expensive?
Golf clubs are expensive as a result of four key factors:
- The cost of materials and labor
- Research and development
- Marketing expenses
- Retail markup
I’m going to cover each of these factors in detail, but if you want to sound smart without actually reading anything, you can just cite those four factors at your next country club event.
1. The Cost of Materials and Labor
Let’s start by talking about the “real” costs of making a quality golf club.
As you can imagine, each section of a golf club requires certain materials.
The Shaft
Golf club shafts are often constructed using steel, aluminum and/or graphite (depending on the desired shaft flex). These metals aren’t cheap.
The Grip
If a golf manufacturer skimps on the grip setup, the grips will wear down prematurely and have a negative impact on that brand’s reputation. A golf brand must equip their new club with one of the best golf grips on the market. High quality grips cost money.
The Club Head
In the early days of golf, wood club heads were used. This was a somewhat “cost-effective” choice of materials.
Today’s modern club heads employ titanium, stainless steel, aluminum and zinc. These raw materials are more expensive than wood, plastic or polypropylene.
So what’s my point?
When you start adding up the raw materials, you can see that there is real cost to building a golf club.
However, it doesn’t stop with just the materials. Once a manufacturer has the pieces of the golf club in place, someone has to actually build that special sand wedge or putter that’s tailored to your golf game.
Golf clubs don’t just build themselves. In fact, one of the reasons why golf clubs are so expensive is because they require almost microscopic levels of precision. Special machinery and carefully-trained laborers factor into the cost of your new golf gear.
Make sense?
2. Research and Development
There’s a reason why club shafts and club heads aren’t made out of wood anymore.
Someone figured out that titanium has a high strength-to-weight ratio. Someone else figured out how to formulate 17-4 stainless steel. You get the idea…
We’re all thankful for progress, but there’s usually a cost associated with it.
In the competitive world of golf equipment, most technological advancements are a result of research and development teams (R&D). All of the major golf brands pay good money to physicists, math geniuses, computer scientists, chemists and other data wizards. These intelligent folks keep pushing the limits for what is possible, and they get paid well for their insights.
The technology they use to test and optimize golf clubs isn’t cheap either.
New golf clubs don’t just look cool, they consistently outperform their predecessors.
Though most golfers would appreciate a less expensive driver, both the casual and professional golfer reap the rewards of these costly new innovations. When you purchase an expensive golf driver that provides better launch angles and a more forgiving sweet spot, you need to remember that hundreds of hours of research contributed to the advances of that club.
These R&D teams aren’t going away, and when you factor in their work with the rising costs of inflation, you can expect the price of already expensive club to continue to increase.
A quick recap:
Remember:
- It costs money to secure the raw materials used to build a golf club
- Skilled laborers are paid to build the golf club
- Golf manufacturers spend money exploring ways to improve the technology of a golf club
So if you’re trying to figure out why are golf clubs so expensive, those are the first factors in the equation.
Once all of this money is invested, a golf brand then needs to convince you to buy one of their new golf club sets. That’s where marketing comes in.
3. Marketing Expenses
Guess what? Marketing is expensive.
Take a moment to think of all the ways where you’ve seen Callaway Golf, PING, Titleist, etc.
These companies (as well as Bob Parsons and PXG Clubs) are all competing for your loyalty, and they have a number of costly avenues for doing this. There are:
- Print ads (can’t ignore the older folks)
- Web and display ads (someone pays for those banner slots and pop ups)
- TV ads (not cheap, in case you’re wondering)
- Podcast sponsorships (please sponsor Getting Off Course)
- Player sponsorships (Bryson Dechambeau and Tiger Woods don’t rock your gear for free)
- Influencer sponsorships (on Instagram and elsewhere)
- PGA Tour and other tournament sponsorships ($$$)
- Golf course and trade show displays, samples, giveaways etc.
Cue the old mantra:
You’ve gotta spend money to make money.
As these companies spend those marketing dollars, the price of the gear has to go up. Expensive golf clubs are partially a result of marketing costs.
HagginOaks.com did a great job of breaking down the financial records of Callaway and Acushnet, two power players in the world of golf gear. Based on data from 2015-2017, they were able to determine that about 25% of the cost of a golf club is a result of marketing expenses.
This may vary from brand to brand, but it’s safe to assume that costly marketing leads to costly clubs.
4. Retail Markup
Though more direct-to-consumer (DTC) club manufacturers have sprung up recently, most golfers walk into a pro shop or big box store to buy clubs.
Why, you ask?
I don’t know about you, but if I’m going to spend significant money on a golf iron set or a new fairway wood, I want to actually feel the club and take some swings before dropping the cash.
I’m comfortable ordering a new golf ball or golf bag without seeing it, but new expensive golf clubs are a different story.
In most cases, golf manufacturers tell retailers what type of markup is acceptable. Based on that Callaway and Acushnet data I referenced earlier, golfers can expect to pay roughly 33% in markup costs through a retailer.
Believe it or not, this is actually lower than the typical markup that retailers shoot for with other items. 50% markup is a more common goal in many retail sectors.
So what makes golf clubs so expensive?
As we’ve covered in detail, golf clubs are expensive due to four key factors.
- The cost of materials and labor
- Research and development
- Marketing expenses
- Retail markup
These are the key elements that add to the final price tag, but there are some smaller sub-factors that contribute to their costs as well.
For example, when the average golfer purchases a new set of expensive golf clubs, they can use those clubs for at least 5 years. This means that golf brands need to make their money up front and play the long game on recurring purchases.
In reality, the sale of golf shoes and other golf gear is a more profitable market with less overhead. That being said, any golf brand that wants to have a real foothold in the industry needs to manufacture clubs as well.
This may lead you to a final question, that is:
Are new golf clubs worth it?
The simple answer, in my opinion, is yes. New golf clubs are worth the investment.
Apart from golf lessons, the technology that’s built into newer golf clubs will have a positive net effect on your game.
Here is my checklist for whether or not you should purchase new clubs.
- Did you get your set at a yard sale?
- Did you inherit your set from a relative?
- Is the set more than 10 years old?
If you answered yes to any of those questions, the odds are that the clubs are worn out or that technology has improved substantially since those clubs were released.
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Wrapping Up
If you read this far, I’m impressed. Pat yourself on the back.
I hope I gave you a thorough answer to the question: Why are golf clubs so expensive?
If you have additional questions, please post them in the comments below. I’ll weigh in where I can.
