The world changed with the growth of the internet and e-commerce in general. That will be the most obvious thing you have read in years, maybe ever. But to understand the story of the world of online shopping for golf equipment, we must first go back to before it was in place and how it all got started, specifically for one of the largest online retailers in the space, Budget Golf.
Budget Golf didn’t become a success in e-commerce sales overnight. In fact, it didn’t even start as an online store. To understand the humble beginnings, we asked Steve Messineo, Founder and President to help us on this journey.
“I started working in a golf shop when I was 14 yrs old. At 18, the shop was sold to a new owner. I found myself coming back to work on school breaks and supporting the business at a high level. I really became passionate about the business. When I finished school at age 23, I approached the original owner and inquired about opening a store for myself. He agreed to make the introductions to the local vendors in Chicago and also introduced me to some local members of a buying group. His request, in return, was that his daughter wanted to be part of the business and became my partner. We pulled together $25,000 in capital and the rest is history!”
“It was about 6 years later that we opened a second location. It was shortly after opening that location when we decided to start our first website. The original intention was to drive additional revenues in the off season. Cash flow from October to April was always very stressful and making additional sales in the sunbelt seemed like a good solution for our business. The first website was really awful. Lots of pink and blue text on a black background. Not even much in the way of images.”
Providing some more insight, we are talking about the mid 90s here and as you could imagine, the internet more or less consisted of those horrible sounds of dial up modems connecting and signing on and hearing “You’ve Got Mail”. Yet it was the proving ground to what would later be the most important technology advancement in modern times, and furthermore, a tool many would use to make a living, shop, buy a home, etc etc.
These two stores were a proving ground of a modern plan, but one that nobody there knew existed as of yet. Budget Golf retail stores existed and continued for years, and then 2008 happened. The financial world was turned upside down when the real estate market crashed, and on September 29th of that year, the Dow Jones Industrial Average fell nearly 800 points. The following month, Congress passed the bailout bill but the damage had been done.
Bad news continued to follow. The following month in November, the labor department reported a staggering amount of jobs lost. This trend advanced through the remainder of the year and parts of 2009, and while many believe the upswing started again in January of 2009, the US Stock Market did not sufficiently recover until about mid-2013.
As a business owner, with multiple retail locations and a small online e-commerce business, how did that impact Budget Golf?
Steve Messineo offered insight.
“In 2008 when the real estate market crashed, we were concerned about the future of the business and what it could mean for our income and families. We decided to go “all in” on e-commerce and accelerate our previous plans. We expected declines of 35% or more in 2009 but business grew 350% in that year. We went from 6 employees to 26 in a matter of a few months. We found ourselves in the warehouse distribution business all of a sudden. We were under capitalized and completely ill prepared for the growth. We needed to revise the entire model overnight. It was a very humbling experience!”
So they did what every other business owner strives to do. Survive. But do it based on service. Growth sounds fantastic, but without a model in place to be successful, it is definitely not easy. Humbling may be the perfect word, but not only did the brand survive, they flourished. Golfers find other golfers and when you collate and create your market place as a golfer, it is noticed.
The online growth didn’t stop, it continued to swell to the point that a decision had to be made on the business model going forward. The retail stores, which had been the original foot print of Budget Golf, needed to be closed. Why?
Steve Messineo offered insight.
“The stores originally represented 95% of our overall business. We continued to grow at a rate of 40% annually. By 2012, the entire model flipped and e-commerce became 95% of our business. It became more and more difficult to effectively execute at the brick and mortar level when we could not fully manage the growth online. We kept them open until 2018, but it had to be done.”
Today Budget Golf employs 65 people and that total goes up seasonally.
With some of the history behind us, no pun intended, we can pick up where we left off at the beginning. Budget Golf is one of the largest online golf retailers in the country and is growing at a rapid pace. In a day and age where the juggernaut retailer, Amazon, has given consumers the mentality that if it is not at my doorstep in 17 minutes from the time I press order, we are irate, what does a specialty store do? While it sounds cliche, in our recent visit to their headquarters in Joliet, IL, they openly talked about the valuing of customers, instead of golf equipment or deals. Both of which they specialize in, obviously.
Steve Messineo continued.
“There are a lot of choices out there. I genuinely believe that we are very thoughtful about everything related to the consumer’s journey with us. From the assortment we work hard to present, to the experience we create on the website, all the way through to the support our customer service team provides, we really do put our customers at the forefront of our thoughts when making business decisions. A wise man once told me, “if you put people first, good things will happen but if you put dollars first……..well”. “
With the name Budget in the URL, you have to assume deals are the number one thing on the docket, and honestly, they might be. With that said, the business as a whole is closer to 50/50 in terms of sales vs in-line products. While some retail stores have limits based on space and shelving, being a massive warehouse has its benefits. Budget does have all of the latest and greatest, but at the same time houses aisles of discount products that might have been the best club out just a few years ago. So how does a company choose what to sell?
Steve Messineo offered this insight.
“We try not to put too many limits on potential inventory purchases. We want to make sure the consumer can find what they are looking for on BudgetGolf.com regardless of what that might be. We strive to be a one stop shop for most every golfer’s needs. We support most, if not all, inline products because this grouping represents the latest golf has to offer. With that said, closeouts create value and that is important to most golfers on some level. Whether golfers want to see a value in their apparel purchases but choose to spend more on equipment or visa versa, we feel our offerings are unmatched. We would like to think nobody does a better job striking a balance in these two categories.”
Peeking behind the curtain, savings or discount items come in all shapes and sizes. It could be from a brand looking to unload extra inventory as they welcome in a new release, or a forecast, and it could even be a store closing. There are countless reasons that a place like Budget Golf has the ability to acquire and offer discounts. Having the ability to hold the merchandise is one of those reasons, and over 50,000 square feet of warehouse provides that flexibility.
With golf hitting unprecedented sales this year, one of the stories has been delays. The online retailers are not exempt from that issue, but Budget remains steadfast in creating a better shopping experience for golfers, and they offered this insight.
“Improving the experience is our mission. We have been in the golf e-commerce space for over 20 years now and there has been so much change during that time. We continue to adapt and be better every year. Who knows……..you might find a Budget Golf store near you again someday!!!”
While the story is full of twists and turns, that would truly be coming full circle. Golfers by and large love a great connection to the product being a throwback to what they grew up playing, a personal best had with something similar, or a technology story that hits where it makes the most sense. The Budget Golf team that we have had the opportunity to spend some time with are real people that have connections to their customer base. Be it from feedback, meeting at a THP Event, or even the podcast or live streams that offer a chance to learn more about the inner workings of an operation like this through a very transparent message.
It is stories like this that we enjoy telling, and this one was fun to research and learn about. Budget Golf is not slowing down, and the growth should continue thanks in part to a passion for the game and the equipment, but also the golfer. If you want to learn more, head over to their website at www.budgetgolf.com. Sign up for their email newsletter and be the first to know about the latest deals they have going on weekly.