Used Golf Balls (Replay)

Summary

Summary of "Used Golf Balls (Replay)" Episode of The Economics of Everyday Things

Published on February 24, 2025

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Introduction

In this episode of The Economics of Everyday Things, hosted by Zachary Crockett of the Freakonomics Network, the focus shifts to a seemingly mundane yet economically significant subject: used golf balls. Through engaging discussions and insightful interviews, Crockett unpacks the multifaceted world of lost golf balls, exploring their economic impact, the burgeoning market for used balls, environmental considerations, and the adventurous individuals involved in their recovery and resale.

The Prevalence and Cost of Lost Golf Balls

The episode begins with an introduction to LeSean Wanigatunga, a dedicated golfer who candidly discusses his struggle with losing golf balls on the course.

[00:02] Zachary Crockett: "By his own admission, LeSean Wanigatunga is no Tiger Woods."

[00:08] LeSean Wanigatunga: "I've been, let's say a struggling golfer for a long time, lost a lot of golf balls."

Wanigatunga loses approximately six balls per game, a figure slightly above the average golfer's loss rate of four to five balls per round. The cumulative effect is staggering, with estimates suggesting that over 25 million Americans lose about 300 million golf balls annually. This not only represents a significant financial burden for golfers but also poses an environmental challenge for golf courses dealing with the accumulation of lost balls.

[00:36] Zachary Crockett: "By one estimate, golfers in the US lose 300 million golf balls every year. If you could find them all and lay them end to end, the line of golf balls would stretch from New York City all the way to Hong Kong."

The Emergence of the Used Golf Ball Market

The narrative transitions to the evolution of the used golf ball market, highlighting how technological advancements and the rise of e-commerce in the early 2000s catalyzed its growth.

[03:02] Zachary Crockett: "But thrifty golfers have another option. They can go online and buy used golf balls for a fraction of the price."

The introduction of high-performance golf balls like the Titleist Pro V1 revolutionized the market. These balls, renowned for their durability and consistent performance, increased the viability of used balls by maintaining their quality even after prolonged use and exposure to harsh conditions.

[03:58] LeSean Wanigatunga: "I think a few things happened, right? The advent of the Internet and e-commerce. And at the same time, the technology behind golf balls increased and it made the golf balls much better."

Key Players in the Used Golf Ball Industry

LeSean Wanigatunga and Two Guys with Balls

LeSean Wanigatunga co-founded Two Guys with Balls, a company specializing in the collection and resale of used golf balls. Initially sourcing balls from personal collections, Wanigatunga scaled his operations by tapping into a network of golf courses and existing ball retrieval systems.

[05:37] LeSean Wanigatunga: "I was hanging out in the garage of a neighbor who lived down the street. He had a bunch of golf balls that he had collected playing golf and we were looking at the balls and thinking, what do we do with all these balls?"

[05:54] LeSean Wanigatunga: "When we started, the way we got our golf balls was by finding golf balls when we played golf. But that was not sustainable when we needed thousands of golf balls."

Wanigatunga emphasizes the dual benefits of his business model: offering golfers affordable alternatives to new balls while addressing environmental concerns associated with lost golf balls.

[15:23] LeSean Wanigatunga: "All these golf balls going into the water, getting lost. Golf balls don't degrade. They are in there for a long time. So it's more sustainable to reuse, recycle, you know, everything in general, but I guess more so for golf balls."

Todd Hutchinson and Ballhacker

Another pivotal figure featured is Todd Hutchinson, the proprietor of Ballhacker, a recovery and recycling company for golf balls. Transitioning from a career in the tobacco industry, Hutchinson now dedicates his efforts to managing the supply chain of used golf balls.

[06:30] Zachary Crockett: "Todd Hutchinson spent more than 20 years working as an executive in the tobacco industry. To unwind, he'd go for walks on the golf course behind his house in Florida. And he started finding so many golf balls that he decided to change careers."

Hutchinson's operations involve securing exclusive contracts with golf courses to collect lost balls, which he then thoroughly cleans, sorts, and sells. His company handles tens of thousands of balls per visit, particularly focusing on those lost in water hazards where retrieval is both challenging and lucrative.

[07:00] Zachary Crockett: "The recovery process begins with a contract. Hutchinson typically signs a two year agreement with a golf course, giving him the exclusive right to collect balls on their land."

Economic Dynamics of the Used Golf Ball Market

The used golf ball industry is valued at approximately $200 million, with major players like PG Golf—owned by the same conglomerate as Titleist—dominating the market by selling around 50 million used balls annually. However, the market remains fragmented, with numerous smaller companies such as Golf Ball Planet, Golf Ball Monkey, and Golf Ball Nut contributing to its diversity.

Wanigatunga's enterprise benefits from this fragmentation by purchasing bulk-used balls from divers and small collectors, offering them at competitive prices to golfers seeking cost-effective options.

[14:02] Zachary Crockett: "For every million of these top end balls sold, a company like Ballhacker might expect to make around $400,000. But only around 20% of the recovered balls are in flawless condition."

Operational Challenges and Risks

The retrieval of golf balls, especially from water hazards, is fraught with dangers. Hutchinson details the perilous nature of blind diving, involving low visibility and the constant threat of encountering wildlife such as snakes and alligators.

[10:25] Todd Hutchinson: "There's no visibility on all the ponds. Once you stir up the bottom, it starts coming up. So basically, eight hours to 10 hours a day, you don't see anything. You're only going by fill."

Safety incidents are a grim reality in this line of work. The episode recounts the tragic drowning of William Rainerson in 2021, an employee of Ballhacker, underscoring the inherent risks associated with golf ball retrieval.

[09:32] Zachary Crockett: "In recent years, at least half a dozen divers have died while attempting to retrieve golf balls."

Environmental and Social Implications

Beyond economics, the episode highlights the environmental significance of the used golf ball market. Reusing and recycling balls mitigates their long-term presence in water bodies, reducing pollution and preserving aquatic ecosystems.

[15:07] LeSean Wanigatunga: "I sell them on my website, netting a margin of around 50%. And golfers get a more affordable alternative to buying new. But no matter how much he sings the praises of used golf balls, some golfers will always be skeptical."

Despite initial skepticism regarding the performance of used balls, informal experiments suggest minimal impact on a golfer's game, reinforcing the viability of used golf balls as a sustainable alternative.

Community and Culture

The used golf ball industry fosters a unique community culture, where enthusiasts and professionals alike engage in what Hutchinson describes as an "Easter egg hunt." This communal aspect is further enriched by collaborations between companies and individual ball collectors, blending business with recreational pursuits.

[16:22] Todd Hutchinson: "It's like Easter egg hunting. I promise you it is for the."

Conclusion

The episode effectively demystifies the economics behind a commonplace issue in the golfing world—lost golf balls. Through the stories of Wanigatunga and Hutchinson, listeners gain a comprehensive understanding of the industry's operational intricacies, economic benefits, and environmental impacts. Moreover, the narrative sheds light on the adventurous and sometimes perilous efforts undertaken to sustain this niche market. Ultimately, the used golf ball market exemplifies how everyday challenges can spawn innovative economic solutions that balance profitability with sustainability.

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Notable Quotes:

• LeSean Wanigatunga at [00:08]: "I've been, let's say a struggling golfer for a long time, lost a lot of golf balls."

• Todd Hutchinson at [08:48]: "So we were swimming and I was out there and I felt safe. And I go underneath the water and I hit something and I look up and what do I see? The silhouette of the lips, you know, they're white. Oh, my."

• LeSean Wanigatunga at [15:23]: "All these golf balls going into the water, getting lost. Golf balls don't degrade. They are in there for a long time. So it's more sustainable to reuse, recycle, you know, everything in general, but I guess more so for golf balls."

Key Insights:

• Economic Impact: The used golf ball market represents a significant economic opportunity, valued at around $200 million annually, with both large and small players contributing to its growth.

• Environmental Sustainability: Reusing golf balls reduces environmental pollution by preventing millions of balls from remaining in natural water bodies indefinitely.

• Operational Risks: The retrieval process is inherently dangerous, involving blind diving and exposure to wildlife, which has led to fatalities and underscores the need for stringent safety measures.

• Market Dynamics: The market benefits both sellers and buyers by providing affordable golf balls to players and offering a sustainable business model for collectors and companies.

• Community Engagement: The industry fosters a unique community culture centered around the thrill of ball retrieval and the shared goal of sustainability.

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This comprehensive summary encapsulates the essence of the "Used Golf Balls (Replay)" episode, providing an informative and engaging overview for those who haven't listened to the podcast.

Transcript

[Zachary Crockett]

By his own admission, lesean Wanigatunga is no Tiger Woods.

[LeSean Wanigatunga]

I've been, let's say a struggling golfer for a long time, lost a lot of golf balls.

[Zachary Crockett]

In fact, you might say that Wani Gatunga is an expert in losing golf balls. He loses around six of them every time he goes to the course. His shots end up in the woods, somewhere in the rough or at the bottom of a pond. And as it turns out, that's not much worse than most golfers fare.

[LeSean Wanigatunga]

On average, golfers lose four to five balls a round. If you're a really bad player, that number goes up. If you're a really good player, that number goes down.

[Zachary Crockett]

When you consider that more than 25 million Americans golf each year, well, that is a lot of golf balls. By one estimate, golfers in the US lose 300 million golf balls every year. If you could find them all and lay them end to end, the line of golf balls would stretch from New York City all the way to Hong Kong. For golfers like Wani Gatunga, this is an expensive problem. Buying new balls can add up. And for the golf courses, all those lost balls are a never ending environmental nuisance. So golfers and courses would both like to recover those lost balls. And if you're willing to brave the alligators, rusty beer cans and murky waters, there's money to be made.

[Todd Hutchinson]

When you dive, it looks like just pearls, just the white spot just showing. You can do it every three months and load up 20,000 golf balls.

[Zachary Crockett]

Almost guaranteed for the Freakonomics radio network. This is the economics of everyday things. I'm Zachary Crockett. Today used golf balls. As any golfer knows, new golf balls don't come cheap. On the low end, you can buy a dozen for $20 or so. But a lot of golfers don't mess around with the low end. They like the good stuff at the highest end.

[LeSean Wanigatunga]

We could call them the tour level performance golf balls. So these are balls like the Pro V1, the Callaway chrome.

[Zachary Crockett]

So of the tailor made DP5 again, that's Lashawn Wanigitunga.

[LeSean Wanigatunga]

These balls would cost on average $50 a dozen.

[Zachary Crockett]

The best golf balls work out to around four to five dollars each. If you have a bad day out on the links, you can easily hack away 20 or 30 bucks worth of balls in a few hours. And when you lose one, you can't spend a whole lot of time looking for it.

[LeSean Wanigatunga]

If you're playing a competitive tournament, then I believe it's three minutes or something like that. If you're playing with a group of friends. It's until your buddies start yelling at you, saying, hey, come on, let's keep things moving. The etiquette is even if it's a five dollar ball, just move on.

[Zachary Crockett]

But thrifty golfers have another option. They can go online and buy used golf balls for a fraction of the price. Now, people have been foraging for lost golf balls for more than 100 years. In the early 1900s, so called ball hawkers would train dogs to find balls. They'd sell them for 10 cents apiece at the clubhouse. Most of these entrepreneurs didn't have permission from the courses to romp around on the greens. And they were seen as petty thieves. Over the years, a few businesses made deals with courses to collect and sell lost balls. But it wasn't until the early 2000s when the used golf ball market really took off.

[LeSean Wanigatunga]

I think a few things happened, right? The advent of the Internet and E commerce. And at the same time, the technology behind golf balls increased and it made the golf balls much better.

[Zachary Crockett]

One golf ball in particular really changed the game. The Titleist Pro V1. Its solid core construction and urethane coating made it more consistent and durable than other golf balls. And soon other equipment makers started to compete for the high end of the market.

[LeSean Wanigatunga]

After the Pro V1 was launched, a lot of the golf ball manufacturers started using better material, better technology in making sure the COVID of the ball was really insulated. So what that meant was when a golf ball was lost or when it went in the water, those balls will last a really long time without it being damaged or without the performance being impacted.

[Zachary Crockett]

Today, it's estimated that used golf balls are a $200 million industry. More than a dozen companies now retrieve, clean and sell them on the Internet. The biggest of those companies is called PG Golf. They sell around 50 million used balls every year through their website, lostgolfballs.com PG Golf is owned by the same conglomerate that owns Titleist, the maker of the Pro V1. So they get to sell the same balls over and over again. But the rest of the used ball market is fragmented, made up of much smaller companies with names like Golf Ball Planet, Golf Ball Monkey and Golf Ball Nut. In addition to being a struggling golfer, Wanna Guetunga runs one of those companies himself. It's called Two Guys with Balls. He got into the business seven years ago.

[LeSean Wanigatunga]

I was hanging out in the garage of a neighbor who lived down the street. He had a bunch of golf balls that he had collected playing golf and we were looking at the balls and thinking, what do we do with all these balls?

[Zachary Crockett]

Wanigetunga set up a simple website and started selling them.

[LeSean Wanigatunga]

When we started, the way we got our golf balls was by finding golf balls when we played golf. But that was not sustainable when we needed thousands of golf balls.

[Zachary Crockett]

So Wane Gitunga started working his way up the used golf ball supply chain.

[LeSean Wanigatunga]

I'd go to golf courses and ask them, who retrieves your golf balls? Can you put me in touch with them?

[Zachary Crockett]

What he found was a large and thriving ecosystem of people who make a living hunting and diving for golf balls.

[Todd Hutchinson]

We had like 30,000 golf balls in the garage.

[Zachary Crockett]

That's coming up. Todd Hutchinson spent more than 20 years working as an executive in the tobacco industry. To unwind, he'd go for walks on the golf course behind his house in Florida. And he started finding so many golf balls that he decided to change careers.

[Todd Hutchinson]

I own the company Ballhawker. We're a recovery and recycling company for golf balls.

[Zachary Crockett]

The recovery process begins with a contract. Hutchinson typically signs a two year agreement with a golf course, giving him the exclusive right to collect balls on their land. Ballhacker now has deals with 70 golf courses in Florida. They get a little money, but not much.

[Todd Hutchinson]

I Normally pay them 12 cent a ball.

[Zachary Crockett]

But Hutchinson says that most courses aren't motivated by the money.

[Todd Hutchinson]

The courses that we have, that means very little to them. When your members have to give a million dollars just to join up, the.

[Zachary Crockett]

More valuable service is the free cleanup. Because we're not talking about a few golf balls here and there. On many courses, there are tens of thousands of them at any given time.

[Todd Hutchinson]

You can just sit there for 20 minutes just digging in one pile of golf balls. It's like a graveyard.

[Zachary Crockett]

Hutchinson and his crew visit each course three to four times per year. On each visit, they can collect anywhere from 20 to 40,000 balls. Some of those are sitting right out in the open, in the woods, or on preserves next to the green. But the real hauls come from the water.

[Todd Hutchinson]

Most people are right handed, so golf balls tend to go right. If the lakes are on the right hand side, you're going to load up.

[Zachary Crockett]

Some companies use tractors to recover golf balls from the water. But most of them, like Ballhacker, enlist the services of freelance golf ball divers.

[Todd Hutchinson]

This type of diving is not for everybody. If you do commercial diving in the sea, at least you can see what you're working on, right? But this you don't see. It's just blind diving and it spooks a lot of People divers are hooked.

[Zachary Crockett]

Up to floating oxygen tanks called hookahs. For several hours, they repeatedly dive down into the cloudy water, scraping the bottom of the pond with a lobster trap. Each two minute dive can yield 300 golf balls. That's not the only thing they find.

[Todd Hutchinson]

Were cleaning out the ponds. Not just golf balls, but trash. I mean, cell phones, umbrellas, old dial phones. Someone throw a bong in. We find so many clubs, it's crazy. I guess some family got an argument, a man and a wife. And I was pulling clothes out of the lakes that were still on hangers. I mean, it's amazing. A whole wardrobe.

[Zachary Crockett]

Hutchinson says he pays his divers the same thing he pays the course. 10 to 12 cents per ball. On a good day, a Diver can recover 7,000 balls and earn around 800 bucks. Divers who retrieve golf balls full time can make six figures a year, but it's dangerous work. In recent years, at least half a dozen divers have died while attempting to retrieve golf balls. One of those divers was William Rainerson. He was working for Ball Hawker when he drowned at Ponte Vedra Inn and Club in 2021. Baulhacker was later fined $56,000 by OSHA for failing to follow proper safety procedures. Hutchinson says he now employs someone full time to monitor the divers from land. But conditions in the water still pose a threat.

[Todd Hutchinson]

There really is no visibility on all the ponds. Once you stir up the bottom, it starts coming up. So basically, eight hours to 10 hours a day, you don't see anything. You're only going by fill.

[Zachary Crockett]

That also means that divers can't see the threats that lurk beneath the surface. Hutchinson is a diver himself, and he's had a few hairy encounters with snakes and alligators.

[Todd Hutchinson]

So we were swimming and I was out there and I felt safe. And I go underneath the water and I hit something and I look up and what do I see? The silhouette of the lips, you know, they're white. Oh, my. So for safety, we have a paintball gun and we scare them off like that.

[Zachary Crockett]

As well as creatures of the deep, companies like Hutchinson's have to contend with human rivalspeople who hunt for balls on golf courses without permission. They're known as nighthawks. And collecting balls is something between a hobby and a side hustle for them. They try to play golf without buying any new balls. Some of them donate their extras to junior golf programs. There's a cottage industry of companies that sell products to these nighthawks. Special glasses, flashlights, and binoculars that make it easy to spot balls. For many golfers, These ball hunters are a nuisance, but Hutchinson says they're not really a threat to his business. In fact, he often works with them.

[Todd Hutchinson]

There's a lot of people that sell us golf balls that live on the courses. They also can subsidize their living by picking up golf balls and selling them to someone like me. You'll have guys bringing in golf balls constantly, all the time. 5, 10,000.

[Zachary Crockett]

Once Hutchinson and his team have finished scouring a course, the day's haul is put into giant tubs. Then they're loaded up into a box truck.

[Todd Hutchinson]

We keep them in the 20 gallon trash cans. They have holes in the bottoms because you don't want the water to sit there and stink up everything. The smell's horrible. Then we'll bring them back to the shop.

[Zachary Crockett]

From there, the balls are taken to a cleaning facility.

[Todd Hutchinson]

I use a potato washer for the golf balls. It will do 4,000 golf balls in five minutes. So you're constantly scooping. I think it's 12 rollers that has brushes on them and it's just rotating them and cleaning them at the same time.

[Zachary Crockett]

Once cleaned, the balls are sorted by brand and model. And that's no small task because each brand of golf ball might have up to 20 different models. Other balls are one of a kind.

[Todd Hutchinson]

I have over 10,000 golf balls that I saved with people's pictures or comments or whatever it may be. They may have gotten married, it may be their bachelor parties. You see pictures of golf balls that you won't show your kids. You see a lot of crazy stuff.

[Zachary Crockett]

The final stage is categorizing every used golf ball by condition. Hutchinson can sell the highest end balls like Pro V1s for around $2 each online, around half the price they go for brand new.

[Todd Hutchinson]

Some of the bigger companies don't like that. But when you're selling a product that costs $60 a dozen, brand new, and you're selling the same year and the same model golf ball for $30, it's a win win.

[Zachary Crockett]

For every million of these top end balls sold, a company like Ballhacker might expect to make around $400,000. But only around 20% of the recovered balls are in flawless condition. Most of them are a little rough around the edges and those tend to be sold wholesale to guys like LeSean, Wannegatunga, Wanegatunga's company, two guys with balls, bypasses the divers, the golf courses, the cleaning and the sorting, and buys pre processed balls in bulk. He pays a flat rate based on the brand and quality.

[LeSean Wanigatunga]

I buy balls anywhere from 15 cents a ball going all the way to A$25 for the top quality.

[Zachary Crockett]

Go V1 Wani Gatunga says the economics are a win win. He sells them on his website, netting a margin of around 50%. And golfers get a more affordable alternative to buying new. But no matter how much he sings the praises of used golf balls, some golfers will always be skeptical.

[LeSean Wanigatunga]

I think there will always be a group of golfers, regardless of skill level, who will feel that the used golf ball, you know, because it's used, because it's been in the water for whatever reason, will not perform as well.

[Zachary Crockett]

There have been a few informal experiments comparing the performance of used and new golf balls, and most of them have concluded that used balls don't really have any impact on a golfer's game. But beyond the price savings, Wani Gitunga says the real benefit of buying used is environmental.

[LeSean Wanigatunga]

All these golf balls going into the water, getting lost. Golf balls don't degrade. They are in there for a long time. So it's more sustainable to reuse, recycle, you know, everything in general, but I guess more so for golf balls. And, you know, some of the golf balls that I get have probably gone through that process several times where it could well be that people who bought balls from me lost them and the divers retrieved them, sold it back to me, and I sold it back to them.

[Zachary Crockett]

For others, like Todd Hutchinson, it's all about the thrill of the hunt.

[Todd Hutchinson]

It's like Easter egg hunting. I promise you it is for the.

[Zachary Crockett]

Economics of everyday things. I'm Zachary Crockett. This episode was produced by Sarah Lilly and mixed by Jeremy Johnston. We had help from Daniel Moritz rappers.

[LeSean Wanigatunga]

And I think one of us said, hey, we are just two guys with balls trying to sell some balls. And then that's kind of how the name stuck.

[Zachary Crockett]

The Freakonomics Radio Network the Hidden side of Everything.

[Todd Hutchinson]

Stitcher.