Costcos Kirkland golf balls back in stock despite lawsuits

Costco Golf Ball

 

Costco’s Kirkland golf balls, which made headlines and resulted in a lawsuit when they made their debut in stores in 2016, are back in stock after almost a year’s absence.

Costco, the wholesale membership club, upset the golf world in 2016 when it started selling its Kirkland Signature (KS) golf balls at about $15 per dozen, a quarter to a third the price of popular top-ranked balls. Industry insiders called it a “miracle golf ball” for its great performance and low cost.

By the time most golfers heard of the Kirkland ball being sold at a ridiculously low price of just fifteen dollars a dozen, most stores were out of stock and available online only.

It took just a few more days before the online inventory was depleted as well.

Costco said they had no idea the balls would be such a hit. Evidently there are no serious golfers at Costco headquarters.

The Kirkland Signature was seen being re-sold on eBay for as much as $129 for two dozen after Costco sold out of them, with many banking on the ball being a one and done ball, expecting it to never return and a great value for collectors.

Golf equipment magazines, blogs, and players all weighed in on the new ball with 99% of reviews being very positive. The most common reviews compared them to Titleist which has owned the golf ball industry for years and has been the No. 1 used ball on the PGA Tour for many years. Many compared it to it’s most successful ball, the ProV-1.

The quality and materials used to make the Kirkland ball,(video), were almost identical to Titleist, but that is where the similarity stopped. The Costco ball now sells at twelve dollars,(three dollars cheaper than when they were introduced in 2016), a dozen or $1.00 per ball, comparable to driving range balls in price. The Titleist balls sell for $52 dollars a dozen on their website.

The original Kirkland ball was a four piece ball. The current one in stock is a three piece.

Costco Kirkland Golf Balls

Why are the Costco balls so inexpensive?  First of all Costco has an ongoing policy of not marking up any item in their stores, or online, more than 15% above their actual cost.

Costco is large enough that one order would generate a tremendous increase in sales for any manufacturer, and therefore give Costco tremendous buying power resulting in the lowest price possible. The box says they are made in China. Last year they were reportedly made in Korea.

Costco will go to any length to keep prices low.  They are famous for their foot long hot dogs. They sell a foot long along with chips and a soft drink for $1.50.

Years ago their hot dog supplier notified Costco they would have to raise their price due to market conditions. Rather than pass the price increase along to consumers, Costco built their own hot dog manufacturing plant, producing millions of hot dogs per year, which enabled them to keep the price at $1.50.

This example of keeping prices low led to speculation they were going to build their own golf ball factory. So far that has not happened.

If you go to Costco’s site you will notice they also sell Callaway’s Supershot 55 for 59.99 for four dozen, ($15.00 per dozen).

In 2016 when Costco introduced the Kirkland ball, Acushnet which owns Titleist, sent Costco a letter alleging false advertising and patent infringement.

Patent infringement on golf ball performance and how it stacks up against competitors is a serious issue, especially when a company’s reputation is on the line.

Costco in return is suing Acushnet in hopes of getting a ruling that will silence the accusations.

In the suit, Costco makes a case for why it hasn’t violated 11 of Acushnet’s patents and why its Kirkland Signature guarantee, that all products “meet or exceed the quality standards of leading national brands,” isn’t false advertising.

“Costco has never publicly compared the KS ball with any Acushnet ball, including Acushnet’s Pro V1 golf balls,” the suit says.

Costco does say that the balls were praised by reviewers and golf pros and were compared to more expensive “tour quality” balls sold by brands like Titleist, Callaway and TaylorMade.

While Costco denies the violations, lawyers for Titleist’s parent company, Acushnet, ultimately filed a countersuit in August accusing the Kirkland Signature ball of violating 10 Acushnet-held patents.

A lot remains to be decided before the case goes to court. One of the major issues: Which case is actually going to be heard.

Attorneys for Costco argue its case should take precedence. Acushnet lawyers say the Costco case should be dismissed on a technicality.

It appears U.S. District Judge Richard A. Jones will now have to make a decision on whether Costco’s case will move forward.

The two parties are expected to have completed private mediation by December 2018.

Acushnet has managed to muscle out other upstarts easily, simply by filing complaints.

Tiny manufacturers who can’t afford to litigate have been forced to fold based on Acushet’s accusations alone, with no proof of infringement. For example in 2015, Acushnet sued five small golf-ball makers.

While Titleist is a large company, Costco is much bigger and has the financial rescources to keep this suit going for years to come and shows no signs of backing down.

All the while, fans of the Costco ball will be the real winners if Costco can keep the ball in stock.

 

 

 

 

 

 

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