The Speed of Sports Logistics with Fanatics VP of Operations

In sports merch, the clock is the boss. Fanatics SVP of Operations Wayne “Skip” Lee walks through a hot-market playbook where championship buzz turns into next-morning deliveries

We hear about sunrise delivery in the winning city and why the first 72 hours/7 days decide the season’s biggest sales. Skip breaks down how they stage inventory, make halftime calls on what to print and where to ship, and use AI to set size curves, place inventory, and block bad customizations before they hit a press. 

• Watch the livestream of this episode on YouTube

Takeaways:

• Why “speed is the product” is an operating metric, not a motto
• The hot-market window: 72 hours → 7 days that drive outsized revenue
• How sunrise delivery works and when it’s worth the cost
• Network design that beats distance (local presses, nearshore partners)
• Halftime adjustments as real-time ops: re-printing, re-routing, redeploying
• Where AI actually helps: size curves, placement, and QC before print
• The fate of “loser merch” and lessons for responsible excess inventory

Links mentioned:

• The Logistics of the NFL
• Championship/Loser Merchandise

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Transcript

Blythe (Brumleve) Milligan: 0:42

All right, today's topic, the speed of sports logistics with fanatics. Hello again, I am Blythe Milligan. We are Everything is Logistics. We're probably presented by SPI Logistics, the best freight agent program in the country for 40 years and counting. And I recently attended the Florida Supply Chain Summit where this great event held right here in my hometown of Jacksonville, Florida. And also in my hometown of Jacksonville, Florida was a company that got started up, a little company you might know of as Fanatics, which is now pretty much a global empire when it comes to not just sports merchandise, but they've gotten into collectibles with their acquisition of tops. They've gotten into uh betting and uh that whole ecosystem as far as sports is concerned, and and many other acquisitions that they've made throughout the years, but you probably know them best by all of their sports merchandise and their sports partnerships with all of the major sports leagues all over. So it was really cool to have the keynote or the closing keynote at the Florida Supply Chain Summit to be held by the Fanatics team. And during that talk, it was called Inventing a Supply Chain at the Speed of Sports. And it was given by Fanatics senior VP of Operations, Wayne Skip Lee. And you could really tell by watching this talk that he knew his stuff. First of all, he was a last-minute replacement. There was supposed to be the uh COO of Fanatics, uh, had some kind of a conflict, could not come to the summit. And so subbing in for that speaker was Skip. And Skip uh gave a more than 30-minute long presentation, and he didn't have to look at his notes, he didn't have to look at any index cards once. And so you could really tell that he knew his stuff. And I recorded the entire conversation. I can't exactly share that panel discussion with you, but because I recorded it, I was able to take a lot of notes during the panel discussion, or not panel discussion, but during the speech. And now I'm going to bring them to you today, as far as this topic is concerned, because previously I have covered sort of the logistics around NFL game day, the logistics of championship merchandise and loser merchandise. A lot of that logistics process has been updated through the years since I have rec since I shared those stories, which I will link to in the show notes in case you want to check those out. Uh, but it's remarkable. And I think probably sports and medical is the most intensive when it comes to the logistics process and the speed that is required in order to fulfill that obligation. Obviously, medical shipments are a little bit more important than sports, depending on who you ask and the timing that you ask. Uh, but this is the conversation that I wanted to have today because there were a bunch of takeaways that I wanted to share with you about that whole entire sports logistics process. So let's go ahead and get into it with the number one takeaway, and that is the speed is the product and a heart hot market playbook. And that's how Skip described this during his presentation. He said that historically with Fanatics, that US delivery went from about five days to around three days, but the target for sports merchandise delivery is around one and a half days. Now, if you compare this to any other sort of global shipper or any, you know, even just take it to US base, how many other retailers can get you your product outside of Amazon within a couple of days? Uh Walmart, Target, those are you know strong contenders as well. Uh, but I don't know of any other sort of e-commerce environment where they can aim to get you your merchandise in three days or under with their goal of being a day and a half. Now, obviously, this depends on where you're located, where your the distribution process, where the distribution centers are located, which we'll get into in in just a second. But um, the speed of the sports merchandise delivery is the at most, utmost important because when you think about it, when people are ordering sports merchandise, they're likely ordering it with the idea that they have a game that's coming up very soon that they need some kind of gear in order to wear for that game. So it's time-based shipments that have to get to your door within a certain period of time, or otherwise, the you you don't really need that merchandise. Uh, if you're gonna wear it for one game, you know, one one-off kind of purchase. Um, but uh it depends, obviously, with a lot of different sports merchandise and the reasons that you're you're buying that merch, but speed is the utmost importance. In fact, after a championship, fanatics runs what's called a sunrise delivery campaign where orders land the next morning in the winning city. Now, obviously, this is referring to whenever a championship takes place. Uh, you know, we recently just in in baseball, for example, recently had the AL in the in the NL finals, not finals, uh, the the Jesus, I'm blanking on the name of it, but um, the championship series, Jesus. Um, so we had each of those series running. And so, whenever you know you had a game seven in AL, and so when you have a game seven environment, obviously both of those fan bases are very, very uh enthusiastic. And fanatics has found that if you can get them the winning team, that championship merchandise, that is key to purchases because they printed the first 72 hours and the first seven days drive the most sales during a championship sort of uh environment. And this goes across all sports leagues, not just baseball. I'm just bringing up baseball because that's the most recent in my brain. Um, but then there is another example for this year's Super Bowl where Fanatics printed a million shirts in 24 hours, where some were delivered by employees and even players, which is just an incredible, you know, logistic, logistical operation where you're not just in involving your carriers, but you're involving your employee, uh, dedicated employees and players in order to distribute your championship merchandise. So the way that Fanatics does this is that they pre-print all of the championship shirts. And when I say championship shirts, I'm referring to, you know, when you ever see like a locker room celebrations, immediately after a game is over, they have a particular kind of hat on, they have a particular kind of t-shirt on. All of them are the same. And so they take that print, and then that's the one that they're that they have ready to go for obviously for team and photo purposes. But then for all of the fans that are making purchases, they want to make sure that they have all of that same exact merchandise ready to go because within those first 72 hours, that's when the overwhelming majority of that merchandise is going to be printed. Now, the goal is around a two-day average without torching margins. So that means a smart carrier mix and local partners is key when trying to get these shipments out as quickly as possible. Another strategy that they use is they pre-print at the venue, they ramp hats out of Texas and tease out of Ohio. So they have those distribution hotspots all over the country. And that brings me into my next takeaway, which is where real-time demand shocks. So the this real-time demand that that games can flip a purchase order in minutes. Players getting traded can flip orders in a minute. If it if a player moves, then that uh it creates a level of excitement that the fanatics team has to be ready for in order to create. If a major player gets traded to a new team, they have to have that new team, that new player, they have to have that design ready to go immediately in order to uh capitalize on that movement and of that, you know, that buying cycle, that buying mode immediately when it happens. And so um they there's also a note in here that the team makes live call, the fanatics team can also make live calls at halftime and right after the final whistle in order to make those decisions on what's going to get printed and why it's gonna get printed and where it's going as soon as it is printed. So I thought that that was interesting that they they can make these live calls during the game and then print near the stadiums in order to make sure that they can capitalize on that local distribution network. And that brings me to point takeaway number three, where it's the network design that shrinks time. So they have a combination of a near shore plus US manufacturing capability where fanatics used to manufacture primarily in East Asia, and they've shifted that production over to Central America. And so they have that kind of Mexico plus one philosophy that we've seen a lot of retailers and a lot of manufacturers take on, especially in the last few years, where you're trying to get that shorter shipping time as short as possible because people want things faster, but you have the, you know, there's certain parameters that you got to put on that as far as like how fast you can go and how you know there's a lot of factors that play in that decision. I don't have to tell any of y'all that, but that just keeping that all in mind that if it might be a couple bucks cheaper to print a t-shirt over in East Asia, but if you don't have that speed, that speed to lead, especially when it comes to sports, it's really, really impactful and it can impact the business if those people can't get their championship gear or their player traded gear within that 72-hour window. So I think that that's really fascinating that Fanatics was ahead of the curve in that regard, especially getting ahead of some of the complications that we've seen, you know, with US-China relationships and then also with, you know, tariffs, uh, especially when it comes to clothing in particular, where it might not make the most sense for you know US-based manufacturers to be having, you know, stitching together clothing and things like that, especially when it comes to fast fashion, but it's completely flipped when it comes to sports. And so I think that that is the interesting takeaway there. Uh, another note that they that they had is that they've had to move some launches from a year out to one to two weeks. A recent rivalry jersey sold 10 times the forecast. The network absorbed it by retooling their capacity on the fly. And so they also balance overlapping seasons, where it's the MLB, the NHL, the obviously the NFL, um, NBA, they all have fanatics, meaning they all have teams that are monitoring the performance of those teams and those star players in order to make sure that they can hit demand whenever it arises and hit it immediately. And this brings me to my next point because AI is obviously very helpful when it comes to making these inventory predictions and these buying predictions because they have a layer of AI that sits on top of the on-demand and the on-demand personalization when it comes to their merchandise. So uh they said during the talk, or Skip said during the talk, that AI decides where to place inventory and how many of each size to make, which is another big indicator because you you never really know how many of you know a size small versus an XXL, like how many of those shirts do you need to get printed? If it's an XXL, obviously it's gonna cost a little bit more as far as a printing is concerned because it's more fabric that you're using. And so when you think about it from that lens, as a as a business, fanatics doesn't want to overprint a certain size shirt or underprint a certain size shirt and lose out money or you know, have a bunch of extra inventory that is sitting everywhere that either has to be trash, it has to be burned, or it has to be donated, or even heavily discounted. And so they use AI to decide where to place that inventory, how many of each size. And when a size sells out online, there are systems that auto-trigger domestic reprints and near shore backfills, where on-demand jerseys run through a computer vision to catch misspellings and block slang and profanity before it's even pressed onto the shirt itself, which I imagine could be really helpful from a customer experience standpoint, where customers make mistakes, they input, you know, customizations wrong, especially when you're dealing with names and slogans and things like that. Obviously, fanatics as a company doesn't want to print anything highly offensive. Like you can't get, you know, like a Hitler shirt on a baseball jersey. Like they're not gonna print things like that. Uh, but on the flip side, where you have families that are wanting to get personalized jerseys, uh, maybe a couple or maybe a family is taking a trip to Disney and they all want matching t-shirts for their favorite sports team, uh, you know, all of that. Uh, they want to try to catch misspellings before that t-shirt reaches the customer doorstep. Because what happens whenever a customer, even if it's the customer's fault, what happens is they open up their package. They're so excited to open up their package and get their new gear, and then they open it up and they see the mistake. And it it just probably puts a huge damper on the day, on the event of where they wanted to wear this shirt, and it creates a level of frustration that fanatics likely wants to avoid. And so having that additional AI layer over the customization aspect of their sports merchandise goes a long way to prevent problems before they become a problem. And and they want you know the best experience possible, and they want people to be able to uh, you know, order things at ease and get them quickly, and then so they become repeat buyers and they trust the process and they trust the shipping process, probably more importantly than anything. Now moving on to the next takeaway is scale equals options, and it's the backbone of the fanatics uh shipping process because their value, and it's proven because their valuation has grown from 700 to 800 million dollars, as was estimated in 2015, to roughly $31 billion today. They have 100 million fans in their database, they have 900 partner facilities, and they're shipping to 180 plus countries. They have 2,000 retail doors via Lids, and that means you know, retail locations. Lids is the hat manufacturer, the hat company that's been around for a while, but uh that was another one of the Fanatics acquisitions, uh, along with uh the you know, obviously their e-commerce division, the tops collectibles we had mentioned earlier, betting gaming, and then also stadium retail. So the Fanatics also has a retail footprint inside of stadiums all over the country. And then in addition to that, they have those individual locations with lids that they can sell their merchandise at. So the scale equals the option, it's the backbone of the company and probably a huge reason why they went from you know around uh $800 million valuation in 2015 to over $31 billion. That is absolutely insane. Uh, but that takes us to our next takeaway, and that's called governance, risk, and post-peak flow. So each league, the NFL, the MLB, and the NCAA, have different approval rules for all of their merchandise. Forecasting and AI helps keep approved SKUs moving into production. Now, for folks who may not know, a SKU is typically a you know, a t-shirt and a certain design. Um, and then they have various sizes, all of those various sizes for that one design, that one material, that one t-shirt counts as a skew. And so when you think about how many SKUs that they likely have for every team across every league, across 180 plus countries, that's a hell of a lot of SKUs to be managing. And so they have to have some kind of AI on top of all of their different data sets in order to be able to forecast appropriately because their target is to sell 90 to 95% of their sell-through rate and then reorder that merchandise that performed well. I've experienced this personally with Erin Andrews. She has a great female sports line. Uh, it's called Where by EA. And she's partnered with Fanatics with a lot of different sports leagues. And so with some of her Jaguars merchandise, they only have maybe like a handful of these items available, a handful of these SKUs available. So I have to around the August time frame, whenever Erin Andrews and her company decides to release all of the new designs for the new football season, I have to make sure that I'm on it in order to make sure that I get the gear that I want to get. Because I'll never forget, two years ago, I tried to get this Jaguars windbreaker and it's I waited a little bit too long, go back to buy it. It's sold out, it's never been restocked, and it haunts me in my brain. And so I wanted that jacket so bad. And now I see a couple of girls here and there, very sporadic because they didn't make that many uh at Jaguar games, and I just kind of want to just steal the jacket off of them. But I know that's not right, so I'm not gonna do that. Um, but I am, you know, mad respect to them for being on top of it. And that was a lesson learned from me that I need to be able to get this gear quickly because for smaller market teams like the Jaguars, Aaron Andrews is not gonna be printing the same amount of merchandise as say the Giants or the Steelers or you know, God forbid the Steelers, Jesus. Um, uh another story. Uh but from a Jaguars fan perspective, I know that I have to kind of be on top of it. So that is the philosophy, though. And I get it from a business standpoint that you don't want to overprint because then you're going to be sitting on top of a ton of merchandise. And if it sells out, if it hits that 90 to 95% sell-through rate, then you have an opportunity to analyze on if you want to reprint those items. Are they in high enough demand so that you are there enough people that are on the wait list to justify another reprint of those items? And so all of that comes into play, and that's all that they're able to make these decisions, not necessarily on the fly, but make more educated decisions on where they should choose to you know put their efforts as far as printing and merchandising and distribution and all that good stuff, because all of the leftovers, and we've talked about it in the other episodes, all of those leftovers, uh the merchandise that doesn't get sold, it has to end up somewhere. And so, for a lot of uh the this merch, you know, historically what has happened, especially during championship games, is that there's two sets that are printed. One team is obviously going to win and the other team is going to lose. And so, what happens to that loser merchandise is historically it's been donated to an emerging country somewhere around the world. Um, I do remember this great story that we covered in uh the championship uh merchandise episode. And you remember the perfect season or the almost perfect season with the Patriots versus the Giants, and Elaine Manning had that incredible throw and an even incredible, you know, the helmet catch. Uh, you know, the Patriots had or the fanatics had these shirts that were printed for that game for the Patriots for their perfect season. And because of that, it never happened. All of that limited run merchandise that was eventually donated to, I believe, a soccer team in Haiti. It was a girls' soccer team, young girls' soccer team. I think it was like, you know, the 13 to 10-year-olds that were playing. Well, that team ended up, and this is a great story, but that team ended up wearing those perfect season Patriots shirts for as their jerseys for the entire season. And that girls' soccer team went on to win their championship wearing that uh gear that was meant to be for the Patriots. So I think it's just kind of a cool story that, you know, in situations, rare situations like that, where you have a ton of merchandise where some companies look into Burberry who will burn their merchandise just because they don't want excess inventory to, you know, reach the little guy, they don't want it to reach the poors or anything like that, um, or anybody, you know, below their kind of ideal shopping demographic, Burberry will just burn that merchandise. Whereas you have situations like this with sports merchandise where it's donated instead of burned, and then you have a great story that comes out of it where you have this girl soccer team that was able to win a championship, unlike the team that the shirts were originally printed for. So I thought that was a great story, and uh it kind of brings us into that modern day because we're probably going to see less and less outside of those particular situations where you have to print it both teams no matter what, because you have no idea who's going to win. And in fact, in that Patriots and Giants game, they had brought out the Patriots championship merchandise, it was on the sidelines, and they had to bring it back out and bring out the Giants merchandise because of what had happened in that game. Everybody thought that the Patriots were going to win until that incredible catch. And so there was a lot of logistics process that was going on. So you'll always have to have, I think from a sports lens, you'll have to have that those instances where you know you have to print both of them. You can't print on demand immediately after the game is over because immediately after the game is over, they got the boxes on the sidelines and they're handing everyone hats and their t-shirts. A lot of times they're putting those t-shirts over their pad. So they haven't even taken their equipment off yet. Um, but they're just already like ready to celebrate. And so you're gonna have those moments where the team is is there, there's gonna be a losing team and there's no way to avoid that losing merchandise. But in sort of the the model that Fanatics seems to be moving in, you're gonna have a lot less of that loser merchandise being printed because of their capabilities of printing near shoring in the US, localized print shops, print shops inside of the stadium so that they can print them out, you know, as fast as possible. And so I think that that's a really interesting evolution of what's happening to different um sports merchandise and whether to print it, not to print it, and how and why, and you know, all of those good, you know, and all of those interesting decisions that go into play. Now, there's also a kind of a last few takeaways here, but uh, fanatics is also really obsessed with the fan first moments that travel. So thinking like wedding rushes, funeral rushes, um, same-day heroics, these all of these making sure that you can get, you know, great customer service and you can get these items in the hands of fanatics for lack of a better phrase, uh, for those sports fans out there. And if you can make those moments happen, then it's more likely that, especially during you know, a funeral or during a wedding, these sometimes especially a wedding is a celebratory, you know, occasion. Sometimes funerals are celebratory occasions as well, but you can make those emotional moments, especially when it involves a sports team, it's it's much more easily to be shared to social media. And so that generates a ton of brand awareness and a ton of brand sentiment um around the team and the company fanatics that made it happen. So these stories set the bar service bar internally and create word of mouth externally, is what Skip described in his presentation. So just to kind of recap a lot of the different points that uh or a lot of the different takeaways that we've made during this episode. And is for fanatics, it's from five days to a day and a half. That's the real product. Championships don't give you a week, they give you hours. Near shore plus domestic isn't about cost alone, it's about clock speed. AI watches the size curve so you don't break it. And scale isn't vanity, it's optionality. And so Skip closed out this speech with answering some QA. And I was able to ask my sports merchandise uh QA. So that was one of the items that I listed as far as a takeaway in here. Um, but there was another one that he answered that he said that which I thought was super interesting because when they uh when fanatics first started, 65% of their purchasing of what they sell used to be, or no, I'm I'm sorry, I'm I I'm actually I got those stats mixed up. 85% of what fanatics used to sell, it was all NFL. And since they've introduced more countries and more sports and gotten more deals, it's now dropped to 65%. Uh, but still, that's an incredible amount of purchasing behavior or purchasing power that the NFL has when it comes to fanatics. 65% of all of their purchases are NFL related, and it's down from 85%, but that's it's only down because it's relative to the 180 plus countries that they're now shipping to. And you got to think about, you know, obviously soccer and cricket, some of the biggest sports in the world. I think those are like 1A and 1B, as far as most popular sports in the world is cricket and football, the or soccer. I'm gonna call it soccer. And then the NFL is right after that. So real football in my American mindset is um probably around three, but it is 65% of what the fanatics sells still to this day. So um, yeah, the NFL is uh is a powerhouse as far as purchasing is concerned. So um they they made a great emphasis on operational efficiency and creating those special, you know, sort of fan moments. And I just loved this discussion. So shout out to Florida Supply Chain Summit uh for making that discussion happen in the first place. And also I thought it was really smart from a summit perspective to put them as the closing keynote because you've all we've all been at conferences where you know it's the last day, it's the right before, you know, the last couple of panels. It's you know, it's not uh it's not too popping in there for the conference goers. And uh so for this one to put that keynote at the end kept a lot of people there, kept a lot of people interested. And so shout out to Skip for making it worth our while in order to stick around to the end of a conference, which I think you should do anyways for a lot of conferences, obviously travel and your business permitting. Um, but there's a lot of work that goes involved, and it's always a little depressing, um, at least for me, when I'm at a conference for a couple of days, and then it comes down, you know, kind of down to the wire. And it's like you're so used to just running around everywhere. And then when it comes to a close, it's like, oh wow, I don't think I was ready for it to come to a close. And that was my feeling after this speech. And so uh shout out to Florida Supply Chain Summit again for um having a fantastic event and then also to Skip for giving a fantastic fanatics presentation where we got to learn a lot more about the sports logistics process. Um, like I said earlier in the show, I will link to those other episodes that I've done in the past because it what one aspect that I think is really interesting, especially when it comes to sports logistics, is a lot of these overseas games that take place. You know, there it's not just London, but it's Germany, I think Mexico City, also Brazil. They're all of these different locations that are now hosting regularly um NFL games. And when you think about the stadiums that these NFL games are being uh held in, they're not necessarily built for the NFL. And so the shipping process of what these teams have to do whenever they find out that they're going to be playing in a different country is that they have to load essentially a shipping container months and months in advance with all of the equipment, the pants, the shirts, shoelaces, cleats, helmets, uh repairs to each of these different types of equipment. And not just that, but some of these countries that they're going to, London, uh, don't necessarily have you know good spices or um good flavor, yeah, you know, good uh probably not good flavor, good spices, because it is, I think, getting a little bit better. Not necessarily like traditional UK food. Sorry to all the UK people out there, but if you've seen some of those videos where like the children from the UK try like American barbecue for the first time and their minds are blown, that's that's the kind of food I'm referring to when I'm I'm joking about this. But NFL teams have to prepare for those dietary conditions months and months in advance. And so they're they're getting the condiments, they're getting the spices, they're getting dietary restrictions that they have for each of their players, and they have to also make sure that all of those things are in the container as well. And obviously, I don't have to tell you that you know, containers uh take a little longer to ship versus you know private airlines and things like that. So there's a lot of logistics process that goes into the overseas games as well. So I'll link to it in the show notes in case you want to check out those previous episodes. I think they're rather short, under you know, 10 episodes. But then I also want to give a shout out to the NFL because they have a series called NFL Explained, and they just dropped a video about playing an overseas game in Germany. I have it saved to my watch later list inside of YouTube, but just go to YouTube and look it up in case you want to check it out. Uh, I'm sure there's gonna be a ton of useful and interesting information in there. But that about does it for this episode. Hopefully you enjoyed my little deep dive into fanatics. Obviously, I am um I'm wearing a Jaguars shirt. I'm a big Jaguars fan. If you've been living under a rock and never listened to this episode before, um, but uh used to work in sports broadcasting here locally in Jacksonville at the same time that I was working at a 3PL as an executive assistant. So I love doing sports logistics stories like this because it kind of feels like a full circle um career moment for me. So um thank you for listening to this episode. That about does it. If you want to check out any of my work, head up everything islogistics.com. That's where all of our socials and past episodes are can are all hosted. If you want to find the podcast, it's available wherever you get your podcast at, and then also find the video versions over on YouTube. But until next time, go jacks. Thanks for tuning in to another episode of Everything Is Logistics where we talk all things supply chain for the thinkers in freight. If you like this episode, there's plenty more where that came from. Be sure to follow or subscribe on your favorite podcast app so you never miss a conversation. The show is also available in video format over on YouTube just by searching Everything is Logistics. And if you're working in freight logistics or supply chain marketing, check out my company Digital Dispatch. We help you build smarter websites and marketing systems that actually drive results, not just vanity metrics. Additionally, if you're trying to find the right freight tech tools or partners without getting buried in buzzwords, head on over to CargoRex.io where we're building the largest database of logistics services and solutions. All the links you need are in the show notes. I'll catch you in the next episode and go Jags.