Tom Cox is president and CEO of Golfballs.com, which offers an extensive selection of new, used and specialty golf balls. He started the company in 1995 and since then sales have grown to $3 million (U.S.) a year. Here he offers some wisdom on what works and what doesn't on the Internet, and how to market a niche site.
What is the total global market for golf balls? How much of that comes from Internet sales?
I don't think anyone knows for sure, but the retail new-ball market is somewhere around one-and a-half billion dollars globally, including the sales of custom logo golf balls. I add that comment because a very large part of the overall golf ball market is the sale of corporate or event logo balls. It represents about 35% of our total business.
I would speculate that less than 2% of the market is sold online at present.
How did you get started selling golf balls on the Internet?
I was managing a private country club in Louisiana. It was 1995 and we were looking for a Web site developer to build a Web site for the club. We had interviewed several companies and found one that we liked. It just happened that the same week, we were negotiating the contract with divers for the rights to dive the lakes and purchase the pond balls from the club. For some reason I got the notion that there might be a business in having a Web site built that would sell the pond balls directly to consumers, sorted and graded by ball type.
That was how it got started. Golfballs.com went live in February 1996 and has been selling golf balls ever since. We started selling only used golf balls but have grown to carry the largest selection of new, custom logo, personalized, and used golf balls in the world. Used balls now only represent about 5 percent of our business. We have invested significantly in state-of-the-art ball printing equipment and currently have a full-time staff of 15.
How well does the sale of golf equipment translate to the Internet? Are there some types of players you'll never be able to reach?
Our focus has been exclusively on golf balls. We debate whether to enter other product lines quite often but always stay away from it. I don't think that everything will sell well online. Golf balls are the most consumable product in golf, since one size fits all. We know that golf balls do sell well online with a very low return rate.
Because we're online and we only sell golf balls, we have an advantage over retail pro shops in certain ways.
We attract product-specific shoppers, convenience shoppers, value shoppers and avid golfers who want to make sure they're not overpaying for balls.
The unreachable golfer is probably the very wealthy, private club member golfer who hits the same ball type all of the time. He buys his golf balls from his pro right before he plays every round of golf. He is not price sensitive, is not interested in selection, and his club pro will carry the products he wants to buy.
But if he wants his name on the balls, we are back in the picture.
After Tiger Woods switched to a version of Nike's Tour Accuracy ball and started winning major tournaments with it, there was quite a run on sporting goods stores. What was the impact of that on Golfballs.com?
Without a doubt, Tiger Woods has had as significant an impact on the sale of these balls as he's had on the entire golf industry. David Duval's win of the British Open was a boost as well. Whenever a player known for playing a particular ball wins a PGA Tour event, it boosts sales of that product.
Luckily, we have a good relationship with Nike Golf, and have never run out of the Tour Accuracy ball.
Have you had success with marketing on the search engines?
Golfballs.com has been online for five-and-a-half years, which certainly helps with search engine scoring. I would venture to say that we have the strongest natural positioning in our category across all of the major search engines. We put a huge effort into making sure that we do everything we can to show up naturally in search engines.
We also bid for, and got, a high ranking on GoTo.com: We're currently No. 1 under the keywords "golf balls," and we generally stay in the top three. GoTo.com is a pay-for-placement search engine that allows you the opportunity to bid for placement. If you are one of the top-ranked bids on GoTo.com, you are placed on several other search engines as well as under a "sponsored links" category. You only pay by the click. As a business, you must decide what price you are willing to pay for a qualified lead.
Would you say that GoTo is a good place for niche sites to list in general?
GoTo.com can be a fantastic, cost-effective source for leads, but leads are meaningless unless you have a good place for the visitors to go.
Too often I see online vendors doing a good job marketing a horrible site. You can generate a thousand qualified leads per day, but if your site is nontransactional or not user friendly or not secure or takes too long to load, you are wasting time and money.
Online sellers need to make sure their Web sites are set up to convert visitors to customers before they spend money marketing it.
Besides the search engines, where do you market your site on and off the Web?
Here are some other ways I generate great Web site traffic: E-mail marketing to my customer database, e-mail marketing to opt-in lists, word of mouth, through vendors and suppliers, via affiliate marketing, with banner ads, and with public relations campaigns.
What made you decide to carry your own inventory and perform your own order fulfillment operations?
When we started Golfballs.com, the plan was to build and market a great Web site, but let another business worry about fulfillment. Who wanted to carry inventory anyway?
After several months of having our used ball supplier ship orders and several months of poor order service and customer complaints, we decided to start carrying inventory and filling our own orders. The lesson we learned early on was that you can't trust the most critical aspect of your customer relationship to a third party. This does not hold true in every industry, but it certainly does with ours.
What about your Web site or your business keeps you up at night?
We have had some extremely successful marketing initiatives in the last 60 days that have at time overloaded our Web site capacity, resulting in poor site performance and a loss of customers. As a business owner and online marketer, there is nothing worse than creating a successful marketing initiative only to have your capacity overloaded by the response.
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