There is no conspiracy issue. Sales rep usually don't know anything about procurement and are told that their product perform within spec (a certain spec tolerance.) I have not been in Penn's manufacturing facility in China but I would bet that machines in that plant are of different age in different lines. As business grows, new machines must be added which translates to new lines of production etc. Tennis balls have a tight tolerance which means it is more difficult to manufacture than say a plastic fork. We can feel the difference in ball performance easily don't we? Just read the threads on different tennis ball performances..To think Head/Penn has created a separate line for the specific purpose of producing "substandard" Championship balls for Costco (and other big box distributors) to sell for a slightly lower price is just idiotic from a business perspective. The simple reason that distributors like Costco and Walmart have lower prices is that they are the 900 pound Gorillas who have the ability to grind out good deals from their suppliers, not because they purchase substandard products. In the case of Costco's practices, it is actually quite the opposite. Likewise, it makes no sense for Head/Penn to have identically branded substandard products in a very competitive marketplace.
Just for yuks I posed the question to a Head/Penn rep and they stated that all balls for each specific product line are exactly the same, irrespective of distribution channel.
Years ago, when they were initially consolidating ball production to China there were plenty of inconsistencies in QC across the board, which may have contributed to idea that failure of balls purchased at Costco were unique to that company. I have know people who experienced flat tubes purchased at Costco at that time. At the same time, I experienced defective product purchased through other distributors such as pro shops and big box sporting goods stores. It was a brand wide issue, with the exception of the then US made Pro Penn balls.
Currently, there is no difference in the quality and incidence of defects among Penn Championship balls at Costco vs anywhere else -- unless you have a conspiracy theory.
Any manufacturing process deal with tolerances in spec. Age of machines on the tennis ball line (especially their moulds for balls) make that slight difference and they must have multiple production lines within a factory producing balls for the volume Penn requires. It will not be the first time that lower value orders get allocated to older/aging machines. I see it all the time across various industries in my line of work.
I import 300+ different items from 25 countries around the world. 25% of my annual purchasing budget goes to China. I see factories all operate the same way from producing Walmart/Costco orders to someone else willing to pay a slightly higher price, Apple or Samsung headphones, sewing machines production allocation for clothes, using less experienced labor to producing processed foodstuff and the list goes on. It is just us humans working with the resources on hand to satisfy demand.