Like any OEM, Sub 70 Golf is between a rock and a hard place as this COVID nightmare slowly winds down. The company has been riding the tidal wave of golf-mania for the past year, posting record sales numbers seemingly every month.
That’s the good news.
The bad news? Unexpected rapid growth can turn the Field of Opportunity into a Field of Landmines pretty quickly. The big guys, like the Callaways and Titleists, can afford to stumble over a mine every so often and still make it to the other side. But for small outfits like Sub 70 Golf, one false step can turn a boom into a bust in no time flat.
So how is Sub 70 Golf navigating its way through the concurrent minefields of exploding demand and global supply chain chaos?
With equal parts chutzpah and heedfulness.
“Good Problems To Have …”
One business truism, regardless of industry, is “do not have a delivery problem.” If a customer wants something and you don’t have it, he or she will buy it from someone who does.
“Our No. 1 priority is that our clubs perform,” says Sub 70 Marketing Director Jay Armour. “But No. 2 is providing a better customer experience and purchasing experience. We want to make sure we’re taking care of every single customer the best we can.”
Armour says Sub 70’s business has grown roughly fivefold since this time last year. But in a classic case of being hoisted by one’s own petard, that growth has brought with it a host of challenges.
“Some issues we’ve had are actually good problems to have,” says Armour. “The most obvious is staffing.”
If customer service is the rock upon which Sub 70 Golf is built, then owner Jason Hiland is its Saint Peter. Hiland was been known to routinely answer text, email or phone inquiries personally, often well after business hours. But that level of service is unsustainable without reinforcements.
“Over the past year, we’ve doubled our customer service staff,” says Armour. “We doubled our club-building staff and we’re hiring more people to oversee operations.”
Changing Consumer Expectations
The pandemic is leading to many changes in both customer behaviors and business practices. One major change, according to a recent report, is that consumers are expecting much higher degrees of customer service today than they did pre-COVID. It’s becoming an around-the-clock expectation.
“We’re putting a serious premium on continuing the same levels of service we always have,” says Armour. “We have more people manning the phones. We have more people answering emails and answering online chat messages and social media messages.”
Responding to customer inquiries is one part of the battle but so is getting orders out the door. Remember that business truism we mentioned? A solid product at a sweet price is great but not if you can’t get it in a reasonable amount of time.
“A year ago, we had a five-to-seven-day turnaround time,” Armour says. “Right now, we’re at 14 to 17 business days. That’s still very good for the industry considering everything we do is custom built. We don’t have anything here that is stock-build in a box ready to ship. Everything is built one club at a time.”
As mentioned, Sub 70 Golf has doubled its club-building staff. In addition, the assembly area has expanded and the company has bought more machinery and materials to keep lead times under control.
“It’s just scaling our business and we’re investing in that,” says Armour. “There have been discussions about building or buying another facility just for club building. We’re growing at a great rate so it’s just a matter of doing what we need to do to keep moving forward.”
Sub 70 Golf Versus The Global Supply Chain
Kindly put, the global supply chain right now is, uhhh, stressed. Not so kindly, it’s pretty much FUBAR’d. It’s a combination of unprecedented demand for certain products during the COVID lockdown with worldwide raw material shortages with huge bottlenecks at the world’s major seaports with a global scarcity of shipping containers.
Industries worldwide are facing shortages of microchips, urethane, polyurethane (and plastics in general), epoxy, even sand. COVID lockdowns last year caused inventories to drop. Since then, a combination of disasters both natural and man-made and other logistical nightmares are slowing everything way down.
The ports of Long Beach, Los Angeles and Oakland have been backlogged for most of the spring. At times, as many as 40 freighters would be waiting off the coast for a dock to open up. While that backlog is easing somewhat, the next bottleneck will be railroad congestion.
“We increased our clubhead orders way ahead of time because lead times have been so long,” explains Armour. “We’ve had to start thinking six to 12 months down the road to make sure we had product in the pipeline. But there’s only so much you can do to get stuff in the building.”
Sourcing ancillary necessities like grips and shafts has also been a challenge.
“If Golf Pride was going to run low on Tour Velvets, we decided we better talk to Lamkin or Winn to make sure we have options,” says Armour. “We’ve had that issue come up with shafts, too. We’ll gladly let people upgrade for no cost if we’re out of their specific shaft. If it’s a comparable shaft we’d normally charge $10 a club to upgrade, we’ll put it in at no charge if it’s the closest option and we’re out of inventory.”
Last Dog At The Bowl?
You might think since Sub 70 is a Yorkshire Terrier in an industry of Great Danes, it’d be left begging for scraps after the big dogs have had their fill. Armour says that hasn’t been the case at all.
“Our owners have been in this business for 25 years, going back to Diamond Tour Golf,” he explains. “They have solid relationships with True Temper, KBS, Golf Pride and all the major shaft, grip and supply manufacturers. They’re on a first-name basis with the execs at those companies.”
In addition, being small in this case does have its advantages.
“We may not need 5,000 S300 shafts,” says Armour. “But it might be easier for True Temper to fulfill an order of 500 here or 1,000 there. We’re smaller and we can be a bit more nimble. We can order 500 at a time and be able to fulfill our orders. But if a larger company can only get 500, it might not be enough for them so it can cause more significant delays for them than it does for us.”
So again, we go back to that business truism: Don’t have delivery problems. Many parts of the country have maybe a six-month golf season. An eight-week lead time might mean one-third of the season is gone before you get your new sticks.
“People are passionate about golf and there’s a time sensitivity to it,” Amour says. “When people spend their hard-earned money with you on their passion, you should definitely do what you have to to get them their product as quickly as possible.
“This year been a challenge, no doubt about it. But industry-wide, I’d say we’re doing a pretty good job of making people happy and getting them what they need.”
Rounding Out The Line
You may have noticed Sub 70 Golf has recently added apparel to its lineup. Armour’s brother Ryan is heading up that end of the business and it’s following the Sub 70 blueprint to the letter.
“We want to provide super high-end stuff and not charge anywhere near what other companies are charging,” says Armour. “I know Ryan had conversations with one material supplier and they asked what he was planning to charge for polos. Ryan told them and they said, ‘No, you can’t do that.'”
The supplier explained other companies were charging $80 to $100 for a polo shirt made from that same material, so that’s the market rate. But, says Armour, that isn’t how Sub 70 Golf rolls.
“We don’t want to sell $80 or $100 polos,” he says. “We want an amazing polo at a fair price that people are excited about. It’s the same as our clubs. Cut out a lot of expenses, don’t bother with retail, stay out of pro shops and don’t deal with distribution.”
As of right now, the Sub 70 Golf apparel line features T-shirts, hoodies, hats and visors. Polos and quarter-zips are due this summer. Not for nothing, when Sub 70 placed their order, the quoted lead time was a minimum of six months.
Sub 70 Golf: Small Fish, Big Pond
The COVID aftereffects will continue to linger. We’re not sure how the global urethane and overall plastic resin issues will affect golf ball manufacturing. Epoxy and graphite shortages don’t bode well, either.
In their recent Q1 financial reports, both Callaway and Acushnet cited the global supply chain challenge as potential threats to continued growth. If you can’t get supplies, you can’t make stuff. And if you can’t make stuff, you can’t ship stuff.
Ultimately, if you can’t ship stuff, you have a delivery problem. And consumers don’t like delivery problems, no matter the reason. In this case, the small fish in the big pond may very well have the advantage.
“We get messages all the time from people about their orders,” says Armour. “We’ll gladly find out where it is in the queue and tell them where it is.
“Look, things are going to happen. You’re always going to have to deal with things you didn’t see coming. But that’s just business. If things are growing and going well, you just have to keep on top of it.”