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Analysis of the Economics of a Golf Cart Cooler on a Golf Course

I only know of one potentially profitable proposition that comes as close to a guarantee for a golf course, and that is outfitting your rental fleet with coolers in order to maximize beverage sales on course. Let me share this with you:

Please take a close look at the report below. As you'll be quick to discern, the benefit of coolers on a rental fleet car at a golf course are immediately self-evident. The input numbers on the template can be adjusted to accurately reflect actual circumstances at your particular golf course. I believe I used conservative assumptions in my template, and the returns to the golf course on and of investment are enticing if not compelling. For example, I state the course makes a minimum of $1.00 per beverage sold, when in reality, margins are significantly greater. Take beer for example, courses pays roughly $0.75 per can, and it's rather difficult to purchase a can of beer for less than $3.00 on any course. Moreover, I assume only half the golfers purchase 2 beverages each on both the front and back 9, for a total of 4 beverages each per round. This begs the question: If golfers only consume 2 beverages on the front 9 and 2 beverages on the back 9, why do golf courses insist on purchasing only 12-pack coolers? I get virtually no demand for 6-pack coolers; in fact, Igloo stopped making their Legend 6 cooler last year which would not be the case had there been sufficient demand.

With all due respect, I know many courses have roaming Beverage Carts in lieu of coolers; however, if I personally owned a course,  I'd pass on the Beverage Cart and stick with rental fleet coolers. Here's why: 

1. The Beverage Cart is rarely present when you want a cold drink, and golfers are reluctant to purchase more than one beverage at a time without a cooler because the additional aluminum-canned beverage(s) get to sit in the drink cup holder on the dash and conduct heat, rendering these drinks lukewarm within 15 or 20 minutes. Lukewarm beverages are simply not refreshing; only Brits drink warm beer! As a consequence, without coolers on the rental carts, the course will not approach anywhere near its unit beverage sales volume potential. 

2. A Beverage Cart represents a capital outlay of at least $5K or $6K, while the labor to operate a cart 40 to 60 hours a week has to be at least $500.00; sadly, these expenditures detract from the profitability of the venture. The good news is that the purchase of a Beverage Cart is entirely optional!

3. Lastly, every time the beverage cart operator stops to conduct a transaction, course play is slowed accordingly. In my imperfect wisdom, a course is much better off having a stocked concession stand that golfers can access before beginning the round, and again at the turn prior to beginning the back 9.

Golf Car Cooler Economics 101

 

As per the economics of outfitting a leased or purchased fleet of golf cars with beverage coolers, let’s make the following assumptions, which I believe are representative of courses located in Florida or Southern California. Needless to say, you can adjust these figures and/or relax the assumptions to better reflect factual circumstances, as they exist at the prospective course.

Assumptions

  1. The average 18 hole course in the United States plays 30,000 rounds per year according to the National Golf Foundation (www.ngf.org);
  1. Golfers consume two (2) beverages on the front 9 and two (2) beverages on the back 9;
  1. The golf course makes a minimum of $1.00 of Gross Profit on each beverage sold;
  1. The golf course has a seventy (70) car fleet;
  1. The course purchases 70 Coolers @ $60.00, or $4,200.00;
  1. The course is open 300 days per year; i.e., the course averages 100 rounds per day (30,000 rounds/300 days = 100 rounds per day), yet only 50% or 50 rounds per day use the coolers;
  1. The course averages $400.00 per day in Gross Profit from beverage sales ($4.00 per round x 50 rounds = $200.00).

The Math

Question: How lucrative is outfitting the rental fleet with Coolers?

Answer: $200.00 per day x 300 days = $60,000 less $4,200 in Capital Costs = $55,800.00

Question: How quickly does the course recoup its initial $4,200.00 capital outlay?

 Answer: $4,200.00 divided by $200.00 of daily Gross Profit = 21 days!

$64 question: Where else can you find an investment that’s “legal” where you achieve the payout in less than one month and generate over 13 times your initial capital outlay annually? Let’s face it, in today’s bleak economic environment; coolers on leased or purchased fleet of golf cars are an essential revenue-generating-asset for all golf course!

Grandy Trading Co.

PLEASE NOTE: Custom VINYL imprinted coolers are also available for a modest additional fee.

Copyright © Granby Trading Co., Inc.
203 Oak Bluff Dr.
Palm Harbor, FL 34683
coolertray@tampabay.rr.com
727-934-9426
Cell: 727-667-3287
FAX: 305-768-0150