A new crop of B2B e-marketplaces lure manufacturers, wholesalers and distributors with promises of new markets and growth—but they can also represent tough new ...
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Tracking to profitability
While Global Sports makes the web sites look and feel different from each other, some observers say the similarities may eventually catch up with them. Lovett cautions that if the sites have mostly the same products, displayed in similar ways, it may be harder for the stores to differentiate. The Athlete’s Foot’s Corliss counters that consumers just want to buy from a retailer they’re familiar with, regardless of product redundancy on competing sites. “It’s transparent to the consumer,” he says.
Unlike many e-commerce businesses, Global Sports is in a good financial position. With $100 million in cash, the company is on track to become profitable by the end of 2002, according to industry analysts, a projection the company is comfortable with. For the third quarter, the company reported revenue growth of 16% over the second quarter, from $7.75 million to $9 million.
Rubin cites the company’s move to its own warehouse, as well as new deals with FogDog, Excite and Toysrus as examples of the Global Sports’ endurance in the financial department and as proof that the business model is sound and working well. “I feel more confident about our business than ever,” he says. “We’re perfectly positioned.”
Rubin plans for Global Sports to grow in three ways. The company will identify sites that want to sell sporting goods, including more sporting goods retailers, specialty retailers and online media and content companies. It also will identify within those categories companies that could sell sporting goods, such as its November deal with Bally Total Fitness. And it will look for other vertical markets where it can apply the same approach it has applied to sporting goods-although Rubin says there are no solid plans in that area yet.
Global Sports’ acquisition of FogDog allows the company to learn techniques and tactics that it can pass on to clients, making them and Global Sports more successful.
Global Sports also handles all online advertising and promotion for its partners, while relying on partners to advertise and market offline. Its onlineduties include making arrangements with AOL, Yahoo, MSN and most recently Excite. Those portals all give the Global Sports web sites priority billing on shopping and sports sections.
All the fans who clicked on the Yankees merchandise buttons at any of those sites in late October were clicking through to Global Sports. “I love the Yankees today,” Rubin quipped the day after the World Series.