May 20, 2019

Fanatics is dominating the sports apparel market

Illustration: Sarah Grillo/Axios

Fanatics is an online retailer that has, through a combination of technology, manufacturing and licensing deals, muscled its way to the top of the sports apparel world.

Why it matters: In the past, big-box retailers like Dick's had to choose which jerseys to stock prior to the start of the season. This led to excess inventory when those players didn't perform or got injured, while leaving them poorly positioned to meet demand for breakout stars and traded players.

How Fanatics is different: Similar to fast-fashion retailers like H&M, Fanatics controls the entire value chain (manufacturing, point-of-sale, distribution, etc.), making the company incredibly nimble. It also has licensing deals with all four major sports leagues, MLS, NASCAR, the PGA and over 500 colleges that give it the exclusive right to print jerseys made for order.

  • Result: There's no need to stockpile inventory, zero chance Fanatics runs out of stock and, most importantly, the company is always prepared for unexpected surges in demand. When Odell Beckham Jr. was traded to the Cleveland Browns, for instance, Fanatics was ready to ship jerseys within seconds.

The big picture: Fanatics is to sports apparel what Amazon is to, well, everything else. They make it, they sell it and they run the website where you buy it.

  • Prime example: After the Washington Capitals won last year's Stanley Cup, Fanatics produced the gear the team wore as they celebrated, stocked the store in the Capitals' arena, stocked the NHL's official online store and ran its own retail sites. Again, this is happening in every major sport.

The bottom line: Most small businesses that want to sell products online use Shopify or a similar service. Similarly, most sports leagues (and even some teams) that want to sell apparel online are now signing deals with Fanatics — and then handing over the reins.

Watch: Michael Rubin on Fanatics' backstory; how it can compete with Amazon

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