SBD/December 27, 2013/Marketing and Sponsorship

Sources: MLBAM Reportedly Studying Changes To Merchandise Fulfillment Process

Fanatics Inc. ships the jerseys, caps and other items sold on the shop
MLB "may take a step back from its e-commerce operation in order to boost profits," as a move to completely outsource its shop is currently "under consideration," according to sources cited by Josh Kosman of the N.Y. POST. MLB "currently operates the e-commerce sites for all 30 teams -- including inventory and pricing -- and uses a third party, Fanatics Inc., to ship the jerseys, caps and other items sold on the sites." But sources said that MLB execs "are weighing a move to have Fanatics largely run the operation." If it "outsourced the operation to Fanatics, MLB would be relieved of inventory and pricing headaches -- while gaining access to a fatter profit stream from MLB sales on the Fanatics site." Sources said that the hope is that the added revenue "from a new contract signed with Fanatics, if that’s the path chosen by MLB, would more than offset the profit margins" of as much as 20% it gets from the $100M a year it "rings up now by running itself." However, sources added that MLB "has not yet decided what changes are best." Sources said that one option is "to keep running its site while choosing a new shipper," and added that MLB is "speaking to Demandware, which does not compete with them, about replacing Fanatics." MLB has run its e-commerce site since '01 (N.Y. POST, 12/27).
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