Scratching the surface - Online golf retailer’s sales drives getting longer
The Suffolk warehouse storing RockBottomGolf.com’s product inventory can look typical on first glance.
Brown cardboard boxes are stacked all over with golf clubs, golf balls, golf bags and other merchandise sticking out. A gray conveyor belt snakes around the 35,200-square-foot building, stacked with products ready to ship.
But that’s about the extent of a typical warehouse. Every so often, the shades of brown and gray are replaced by reddish-brown signs and banners. Somewhere on the signs is “Scratch,” a cartoon-looking, red-bearded caveman and the Internet golf retailer’s company mascot. Scratch’s face is surrounded by slogans like “A Clean Cave Is A Happy Cave” and “A Happy Rock Head Stays A Rock Head.”
“We try to brand it not only for the customers, but for the employees,” said Todd Rath, 30, RockBottomGolf.com’s chief operating officer and local partner.
“Rock Heads” are how the company refers to its 155,000 dedicated international customers, who have helped to spur sales from $3.1 million in 2002 to a projected $24 million this year.
That estimate would be above last year’s $18 million, which placed RockBottomGolf 276th in Inc. magazine’s 500 fastest-growing national private companies.
While RockBottomGolf is headquartered in Rath’s native Rochester, N.Y., its three partners – all high school friends – and 25 employees are split across two states. Todd runs operations with 16 employees in Suffolk and Virginia Beach; Shannon Smith, chief financial officer, is in Rochester, and Tom Rath, chief executive officer and Todd’s older brother, is in Lake Placid, N.Y.
Following the model of low-price retailers Big Lots and TJ Maxx, RockBottomGolf buys leftover products from golf manufacturers and re-sells them at discounted prices. Golfers may recognize the brand names TaylorMade, Adams Golf, Izzo and Titleist among its inventory.
“Chances are if anyone can find a home for it, we can,” said Tom Rath, 33. “Some of our critics refer to us as the ‘graveyard of golf.’ Oftentimes, we may be selling the last 3,000 drivers a manufacturer has ever made.”
And as Todd Rath explains, the choice of Hampton Roads as the product warehouse and shipping hub was not at random.
“We can get all the way to Chicago and back in two days ground service,” he said.
Via contracts with UPS and FedEx, the company, which takes more than 5,000 orders a week, estimates it can ship from Hampton Roads to 62 percent of the U.S. population in two days.
As each of the partners describes, the idea and original product for RockBottomGolf almost literally dropped from the sky, and into country club ponds.
Smith, Tom and Todd Rath all went to Wheatland-Chili (pronounced “Chai-lie”, not like the food) High School outside of Rochester. Tom Rath spent many summers and late nights during high school and college at Purdue University, which he and Todd attended, scuba diving for golf balls.
“We paid our college tuition that way,” Tom Rath said.
The golf balls were then cleaned and re-sold. In 2000, the Raths were IBM software consultants and Smith handled financials for another consulting firm. But the “dot-com” industry collapse soon left all three unemployed, yet with another idea on the tee.
“It was all eBay,” Smith, RockBottomGolf’s CFO, said. “eBay was hot back then. Money was to be made.”
In 2002, eBay was where the partners established RockBottomGolf as a retailer, and it now plays a minor role in its operation. Beyond its early growth past eBay and now in its sales, the partners don’t plan to stop at just golf.
Web sites like rockbottomskis.com or rockbottomsports.com now default to RockBottomGolf’s Web site. Eventually, RockBottomGolf wants to become RockBottomSports, with many other sporting goods products available.
The Raths are optimistic about that goal. Todd, pointing toward the west end of the brown box-filled warehouse, said, “We’re pretty expandable here.”
“If it wasn’t for the Internet,” Tom said, “I couldn’t compete head-to-head with big sporting goods.”
The partners have tapped into a golf equipment industry that had $3.5 billion in sales last year. But Larry Weindruch, spokesman for the Mt. Prospect, Ill.-based National Sporting Goods Association, says that number doesn’t completely reflect the market.
“The last five years have not been the best years for golf,” he said. “The market has not been really conducive.”
The issues, he said, relate to sliding popularity and equipment expenses. An individual golf club can sell for $200 to $1,200.
While unfamiliar with RockBottomGolf, he did say sporting goods retailers are making a slow shift to the Internet, introducing features such as online orders for in-store pickup.
But there are very few, he said, who are Internet-only, let alone sell closeout merchandise.