The Business Behind U.S. Open Merchandise
11 days to sell 400,000 items.
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Today At A Glance:
The USGA will spend two to three years planning merchandise for a U.S. Open. The planning and execution need to be flawless to sell 400,000 items over an eleven-day period. Which results in 3,000 items per hour. Today’s newsletter breakdowns the planning and preparation that happens behind the scenes.
Read Time: 6 minutes.
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Hey Golfers —
The USGA expects to sell 400,000 items from 50 different vendors in eleven days at the U.S. Open this week.
Before we dive into the incredible logistics and planning required to sell merchandise at the U.S. Open, let’s look at some USGA numbers.
The USGA is one of the largest businesses in golf. In 2022 they did $304 million in revenue — an increase of $70 million versus 2021. Broadcast and Media Rights were the highest revenue-generating item at $114 million in 2022.
Here’s a breakdown of USGA revenue categories:
Broadcast and Media Rights — $114 million
Championship Revenue — $90 million
Corporate Partnerships — $46 million
Members and Donors — $21 million
GHIN and Handicapping — $11 million
Other Revenue — $22 million
Merchandise is a huge component of revenue generation for the USGA.
While most U.S. Open merchandise is sold in an eleven-day span, the planning and preparation is a multi-year process.
Merchandise preparation begins two to three years before a U.S. Open — it all starts with the logo design. The USGA works with the host club and an internal design team. The process takes around six months to complete. And one of the primary keys of the logo is how well it will embroider.
Once the logo design is completed, the USGA will begin sourcing merchandise. And while it may not sound like a complex process — it is. The U.S. Open hasn’t been to Los Angeles in 75 years — since Ben Hogan won at Riviera in 1948. The USGA team lacks sales data from previous championships in the area.
To tackle the creative challenge, the USGA looked at three areas to point them in the right direction.
Weather
Demographics
Market research
As part of the market research — the USGA visited local golf clubs in the Los Angeles area about a year ago to see what colors and styles sell best.
In contrast — the USGA knows exactly what will sell at Pinehurst and what won’t. For example, black and navy don’t do as well as other colors.
The USGA has a logo and merchandise to sell — now they need to figure out how to sell it.
They utilize a multi-channel sales approach.
E-commerce
In-person
And it begins much earlier than we may think. Shortly after the 2022 U.S. Open at The Country Club — the USGA began selling merchandise online in a limited capacity for the 2023 U.S. Open. And last fall, they ramped up the online presence with more products.
On the backend — the USGA utilizes Fanatics to host its website and to fulfill and ship orders from its online site.
While e-commerce is important — in-person merchandise sales far outweigh the online store.
Over 35,000 square feet will be dedicated to two Merchandise Pavilions at LACC.
The Los Angeles Country Club has limited space on the North Course, so the Merchandise Pavilion is located on the South Course. While that isn’t abnormal for a major championship — LACC has Wilshire Boulevard that separates the South Course from the North Course. The USGA constructed a fan bridge over Wilshire Boulevard to connect the North and South courses.
The main Merchandise Pavilion on the South Course is 26,000 square feet. And a smaller Merchandise Pavilion on the North Course is 9,300 square feet for a total of 35,300 square feet between the two.
The USGA has a third party build the Merchandise Pavilions in late spring, and they take possession at the end of April.
And that is when preparation begins to take shape.
A total of 21 USGA employees and 14 interns begin to work their magic. Four of them are on-site for two months. While others travel back and forth.
The USGA begins building out fixtures for the Merchandise Pavilions. They are using the same design company that built out Augusta National’s Merchandise Pavilion. The team starts to inventory 400,000 items into their database. UPS provides 20 53-foot semi-trailers to warehouse items.
The in-person selling at the Merchandise Pavilions begins Thursday before the championship. Thursday — Sunday, they are open to the public. Then the next seven days, a credential is required to purchase items.
The USGA has over 1,000 volunteers helping in the Merchandise Pavilion alone. And over 300 vendor employees are assisting in the sales and customer experience process for the eleven-day period.
If items sell faster than anticipated — the USGA will work with vendors to ship products overnight.
Even though U.S. Open tickets sold out — the USGA sold fewer tickets this year due to the size of the property. They expect the average transaction per person will be on the higher end of their typical range. And this is coming off a record merchandise revenue year at The Country Club last year.
Merchandise for the U.S. Open is a crucial revenue generator for the USGA. Other USGA Championships make up about 8% combined of what the U.S. Open does in both items and revenue.
Logistics must be dialed in to sell 400,000 items in 11 days. That is 36,000 items per day. Taking it a step further — the Merchandise Pavilions are open for 133 hours. Meaning 3,000 items will be sold every hour.
Have yourself a great Monday. Talk to you next week!
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Great article - fascinating stuff!