December 23, 2009, 12:00 AM

Dreams expects to bring in $15 million from services to other retailers

Dreams is using its technology platform and fulfillment service to build up a bigger third-party services operation. The company now hosts sports-oriented e-commerce sites for more customers such as NCAAFootball.com.

Dreams Inc. is using its e-commerce technology platform and fulfillment service to build up a bigger third-party services-what it terms web syndication-operation. The company hosts sports-oriented web sites and provides additional services such as fulfillment for a growing list of partners such as NCAAFootball.com. Dreams, which operates the sports apparel site FansEdge.com, expects its services revenue to top $15 million for 2009, up by 400% from $3 million in 2008, according to a presentation to shareholders earlier this month. The company has 50 third-party service accounts this year compared with 31 in 2008.

Dreams and FansEdge.com is No. 217 in the Internet Retailer Top 500 Guide (a PDF version of the company’s financial and operating profile can be ordered by clicking on its name).The company also expects:

  • E-commerce sales of about $60 million in 2009, up 27.9% from web sales of $46.9 million in 2008.
  • E-commerce revenue will likely account for 68% of projected total sales of $88 million for 2009, compared with 57% of total sales of $82 million in the prior year.
  • The Internet is projected to contribute about 81% of total retail sales of $74 million for 2009, compared with 74% of $63 million in 2008.
E-commerce is a steadily growing channel for Dreams, and Kevin Bates, president of Dreams Retail and co-founder of FansEdge, expects that momentum to continue. “We’ve always had a strong focus on e-commerce and it’s been an explosive part of our overall business,” he tells Internet Retailer. “Over the past five years our e-commerce revenue has increased 13-fold. Our focus will include continuing to expand our syndication client base, differentiating our e-commerce brands and investing in the research and development of our proprietary e-commerce platform.”

Dreams had been planning to enter the services business for a long time, Bates says, but didn’t want to accelerate the business plan before this year. “We spent years developing a very scalable e-commerce platform, integrated back-office systems, and a set of marketing tools and services that we felt would be superior,” he says.

More services revenue will represent the majority of Dreams’ 2009 growth, Bates says. “By partnering with so many well-known brands we have been able to reach a much larger audience,” he says.

For their part, Dreams’ third-party services customers can shop more than $20 million worth of products, Bates says. Dreams has handled all fulfillment operations for its clients to date, but will accommodate any future customers that wish to manage their own fulfillment, he says.

Dreams has 22 Field of Dreams stores, eight of which are franchise-owned, and six FansEdge stores in the Chicago area. Future plans include expanding FansEdge stores in Chicago and pushing into other thus far unnamed markets.

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