The counterintuitive price of blades

[GolfSpy MPR]

I threw a post to this effect in the thread on Lynx Golf's social media tone-deafness, but thought it might be worth it's own thread.

 

For some time, I've marveled at the price of major OEM muscle-back irons.

 

If you tell me that the R&D and manufacturing costs for PXG irons or the Epics or the TM 790s drive up the cost of those irons, I'll believe it, at least in part. It makes sense. Obviously, there is some level of research in each of these, and they are composed of multiple parts, with differing levels of complexity in their assembly.

 

But a forged muscle-back is what it is. They don't change much at all from model year to model year, or from brand to brand. From a tech perspective, they're about as honest a club as exists.

 

And yet, most often, they're among the pricier offerings from each OEM. Just for example, pulling up Titleist's website. The AP1s are $140 per club. The MBs are $185. (The TMBs are $280[!] per club, but again, I'll buy the idea that manufacturing costs factor in here).

 

What is harder to design a make: the AP1 or the MB? Are there really (for instance) spec tolerance costs that justify the higher price for the no-tech irons?

 

I think that MGS should do an article on this, like they did with driver costs some time ago. What is the profit margin on the AP1 vs the MB?

 

Last observation: the MBs have to carry a certain price tag, however, because of their target market. Obviously, guys looking at buying the MBs are players who take their games very seriously. This means that Titleist can price the MBs at $180/club, because they're marketing to guys willing to pay that price point. But I also suspect that if they sold the MBs for, say, $80/club, they would actually drive away their target audience.

[null]

High end golf equipment is not as cost or value driven market. It's a luxury market and therefore there is a certain prestige with equipment that costs more.

 

It's what tour players use = top of the pyramid = costs the most

 

Here's a quick article that touches on luxury markets

 

https://www.entrepreneur.com/article/250745

[null]

I think you answered your own question in your last paragraph

[GolfSpy MPR]

I think you answered your own question in your last paragraph

 

That doesn't mean it still isn't odd

 

I enjoyed the article you linked to, and the luxury approach to golf goods absolutely comes into play with, for instance, James Patrick's wedges.

 

To a lesser degree, it remains relevant with the PXG-class of clubs (including, obviously, PXG, but also the Epic Star and others trying to get in on that market).

 

But MBs aren't marketed in the same "ultimate engineering, exclusive luxury" way. They tend to be marketed on the basis of certain performance characteristics, moreso than on luxury appeal.

 

I'd still love to see the profit margins on a set of MBs.

 

Though perhaps this raises another question: if my suspicions were correct about the profit margins on the MB-class irons, would OEMs have incentives to make more golfers aspire to play them?

 

Yes, I'm overthinking this. But yes, I'm doing it on a golf discussion forum, the one place where it makes sense to overthinking such things

[hckymeyer]

I don't have the answer, and I agree it would be nice to see some actual numbers.

 

I would guess that in general it costs more to manufacture a forged club than it does a cast club.  The majority of OEM's have forged MB's at the top end so there could very well be a cost increase just due to the manufacturing process compared to a cast GI/SGI club with more "tech".

 

Also MB's don't sell as much.  So you aren't going to see a reduction in cost due to being able to order huge mass quantities.  Say the tooling costs $100k and you make 10,000 sets of MB's.  Vs maybe $150k for GI/SGI tooling but you make 50,000 sets.  Even though it might cost more up front, when you average that cost over the number of sets produced it's actually cheaper.

 

Now I just made up all those numbers, I have no idea what the real numbers would be for any given OEM.  But if you think about it that way the higher cost of an MB iron might not be as much margin as you think.

[GolfSpy MPR]

 

 

Also MB's don't sell as much. So you aren't going to see a reduction in cost due to being able to order huge mass quantities. Say the tooling costs $100k and you make 10,000 sets of MB's. Vs maybe $150k for GI/SGI tooling but you make 50,000 sets. Even though it might cost more up front, when you average that cost over the number of sets produced it's actually cheaper.

 

 

Volume is a really good consideration that I hadn't thought about.

 

Sent from my LG-H830 using Tapatalk

[revkev]

Volume yes but again you have to be at the expected price point for your target group.

 

 

 

 

Sent from my iPhone using MyGolfSpy

[PlaidJacket]

Don't get me wrong. I appreciate a good discussion as much as the next guy. I also appreciate a guy like riley taking the time to write a good post. However....

I don't care what the profit margins are for Titleist or Callaway or Tmag or any of them for that matter. I'm not invested in their business. So from my perspective it doesn't matter to me. I might for example purchase a dozen PV1's or a club from one of them but their profit margin doesn't enter my mind. I pay what the club or balls retail for or I don't own it.

I'm a golf consumer and player and not an investor in their business. If I were then their margins would interest me greatly.

I am however interested in the performance and playability of their products. But that's it.

[GolfSpy MPR]

 

 

Don't get me wrong. I appreciate a good discussion as much as the next guy. I also appreciate a guy like riley taking the time to write a good post. However....

I don't care what the profit margins are for Titleist or Callaway or Tmag or any of them for that matter. I'm not invested in their business. So from my perspective it doesn't matter to me. I might for example purchase a dozen PV1's or a club from one of them but their profit margin doesn't enter my mind. I pay what the club or balls retail for or I don't own it.

I'm a golf consumer and player and not an investor in their business. If I were then their margins would interest me greatly.

I am however interested in the performance and playability of their products. But that's it.

You'll get no complaints from me. There are a variety of reasons to find golf fascinating. For some, it really is all about the number on the scorecard at the end of the round.

 

For others, it's primarily about the camaraderie, or the outdoors, or the Tour, or tinkering with clubs.

 

In the past decade, I've found that the business of sports (particularly pro sports) is often more interesting to me than the games themselves.

 

And MGS itself often devotes significant article space to the business of golf.

 

But I'm firmly in the "to each his own" camp of golf enjoyment.

 

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