Creating new value from old gear

Owners: Leigh Bader and Joe Ricci, and four additional principals

Type of business: Online retailer of golf accessories, apparel and used (mostly) equipment

Location: 500 South St. West, Raynham, Mass.

Year founded: 2000

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Employees: 47

Annual revenue: WND

Every day, ships about 300 packages of golf equipment to buyers around the world, from the back of a nondescript strip mall. The items are sold through eBay auctions – about 8,000 per month – and generate north of $10 million a year, says company president Leigh Bader.

It’s quite a success story for a home-grown golf shop that got its start 25 years ago in 240 square feet of retail space at the nine-hole Pine Oaks Golf Course in South Easton, Mass.
Bader and his long-time partner, Joe Ricci, didn’t start out thinking they would be Internet pioneers. In May 1981, when they opened the shop, there wasn’t an Internet yet.

What they did set out to do was create a thriving golf business – and they have. Joe and Leigh’s Discount Golf Pro Shop now occupies 8,000 square feet of retail space and 1,000 square feet of office space.

One key to the shop’s growth, said Bader, was the fact that from the beginning, Joe and Leigh’s took trade-ins of used equipment. “It never occurred to me that it wasn’t an option,” he said. “I grew up playing [with] used equipment.”

The downside, however, was that it was hard to determine the value of the trade-ins – unlike in the auto industry, where the Kelley Blue Book does that. As a result, Bader and Ricci might pay $50 for a set of clubs they couldn’t resell for more than $25.

So they devised a solution. It took six years, said Bader, but by 1990, they had collected enough data on their shop’s sales to create their own value guide: The Green Book.

“It didn’t start out as a grand scheme,” Bader said. But their resale business grew – enough that soon, they’d branded a mini-shop in their pro shop Joe and Leigh’s Golf Swap Shop. And the clubs just kept on coming.

In 1998, one of Pine Oaks’ assistant golf professionals – an avid collector of Anaheim Ducks hockey memorabilia, and an avid user of eBay – saw a pile of equipment in the back room of the shop and asked whether it would be OK to list the items on the Web site, then a novelty.

Everything they posted sold. In fact, in six weeks, the shop had sold every piece of used equipment in the shop, including the inventory on the floor. “Clearly, it was an opportunity,” said Bader. “If we could get more used equipment, we could sell it on eBay.”
The Pine Oaks team reached out to other golf pros in New England, asking for their used clubs. They made a deal with a Northeast golf retailer, then with national sports retailer Dick’s Sporting Goods.

In January 2000, Bader and Ricci incorporated, and in June they hired the venture’s first employee, current general manager Alex Choi.

Bader estimates there is about $4 billion worth of saleable used golf equipment out there – more than the $2.5 billion in new equipment sold in the United States every year.
He approached eBay with the idea of creating an online value guide based on data from golf gear auctions on the site. It was something eBay had never done – license transactional data to a third party. But his persistence paid off.

By early 2001, Bader had a deal to create an online version of 3balls’ golf-equipment guide, using eBay’s hundreds of thousands of data points to constantly update the Green Book’s snapshot of the used equipment market.

Meanwhile, the PGA of America had issued a request for proposals for a tool to help its members – club pros like Bader – to access the used-gear market. Bader offered to have 3balls serve as the risk-free liquidator of PGA pros’ used inventory, and use the eBay data to guide the company. All a pro would have to do was ship the items to 3balls, and the pro would receive cash in return, which he could use to incentivize customers wanting to buy new equipment.

The PGA signed on, and in December 2003, it went live with its Value Guide – a descendant of the partners’ Green Book. The PGA Trade-In Network soon followed.

Since then, 3balls has further refined the system, and has hired a team to manage shipments in and out of its Raynham facility. The only place you’re ever likely to see as many golf clubs in one place is at a golf-equipment manufacturer’s warehouse.

And what does the future hold?

“Our growth is limited [only] by us,” Bader said. Not bad for a golf shop at a 9-hole course in southeastern Massachusetts.

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