Direct-to-Fan: How Athletes Can Transcend Retail Sales [Exclusive]
In the age of direct-to-consumer commerce, backed by the Internet and changing consumer behaviors, trends and expectations, it has never been easier and more business-savvy for athletes to create and sell products directly to their fans.
By removing every "middle man" from the equation, athletes and their representatives can leverage the Direct-to-Fan Model to achieve:
📊 HIGHER MARGINS
Research by Digital Clarity Group shows the direct-to-consumer model can double net margin dollars.
💥 MORE CREATIVE FREEDOM
Athletes retain greater control over their athlete brand, including how associated products are designed, manufactured, branded, marketed and sold.
🛍 GREATER PRODUCT VARIETY
Athletes are no longer limited by "shelf space" or brand partners that don't see the value in a wider product assortment. NFL wide receiver Julian Edelman, for example, sells a host of products on his website, such as apparel, books, headwear and accessories.
♻️ ENHANCED FAN ENGAGEMENT & LOYALTY
Athletes can use the data they collect about their fans' spending habits to drive more fan engagement and loyalty, which will result in future sales, additional products, personalized promotions, and highly lucrative opportunities within the seven other digital profit centers.
🌎 ACCESS TO NEW TERRITORIES
Why limit an athlete's products to physical locations that require people to walk in and purchase them, when the athlete could sell them to virtually anyone across the world? The Direct-to-Fan Model enables greater reach to more fans and, therefore, more sales.
Big Baller Brand, even with its wrinkles that need to be ironed out, has already proven this model is the future of the sports industry — and it's only a matter of time before more forward-thinking athletes and their representatives get in line. The only question is, how long will the line be when they do?
To more precisely understand the intricate process involved with the Direct-to-Fan Model, we prepared this six-step guide:
1. Product Conception and Design
Start by outlining the types of products the athlete wants to create and sell — whether it's white-labeling everyday products like beer koozies or cell phone cases, developing a clothing line, or designing footwear.
To most effectively determine a product or set of products, consider products the athlete uses in her or her day-to-day life. This way, the athlete can seamlessly and authentically feature the product(s) through strategic placement in the athlete's content experiences, thereby increasing exposure and sales building.
Be mindful that not all products have to be physical in nature. There are plenty of options within digital products, which offer benefits of tremendous scale, no inventory, and potentially fewer requirements of resources and overhead. Examples of digital products include video training guides, original music, and ebooks.
Once an athlete sets his or her mind on a product or set of products:
- Hire a product designer, and ensure proper agreements are enacted to protect ownership and confidentiality of intellectual property.
- Complete and submit potential patent applications to your country's official trademark and patent office (e.g. U.S. Patent and Trademark Office).
- Develop potential brand names and trademarks for the product(s), based on their appeal and potential strength of the brand as a trademark.
After a list is drafted, clear each option by searching the database of your country's official trademark and patent office (as well as other sources, such as domain name registrations and business listings) to identify if they are available for use and registration.
Trademark applications should be filed at your country's official trademark and patent office, once a brand name is determined and cleared.
2. Sourcing & Manufacturing
For athletes who choose to sell physical products, seek out and enter into discussions with local, regional and/or overseas manufacturers.
While the manufacturing process isn't one to be taken lightly, it is also not as complicated as it sounds. There are many consultants who specialize in the manufacturing process — especially when engaging with overseas suppliers — as well as many online marketplaces (e.g. Alibaba).
However you approach sourcing and manufacturing, ensure proper agreements are drafted and signed by the athlete's brand managers, the manufacturing company, and any third parties, in order to protect the athlete's brand, intellectual property and confidentiality.
In these agreements, ensure there are adequate:
- Provisions that enable the athlete's brand managers to pre-approve all uses of the brand, as well as production of articles using it, so that quality control is maintained over how the brand is used and presented to consumers and partners
- Nondisclosure provisions to protect trade secrets, such as proprietary design of products, manufacturing processes, et cetera
3. Distribution / Point-of-Sale
After you dive into the manufacturing process, consider how you prefer to distribute the product(s). In essence, there are two options:
- The athlete's personal website, or
- A third-party website developed specifically for the product line
Since the athlete behind the athlete brand is one of the main reasons that fans will purchase these products, we recommend building an e-commerce platform into the athlete's personal website. In this case, there are a few options from which to choose:
- E-commerce platforms such as Shopify, Magento and WooCommerce
- Do-it-yourself website platforms such as Squarespace and WIX
- Turnkey solutions such as Officialize Media
Again, ensure proper agreements are drafted and signed by the athlete's brand managers and all third parties, in order to protect the athlete's brand, intellectual property and confidentiality.
When dealing with website developers and any other third-party content producers, it is imperative to ensure there is confidentiality to protect the proprietary aspects of the athlete brand's business. Additionally, ensure agreements explicitly state that all work product created is owned by the athlete, and not the creator, including prospective assignment language. Adequate copyright provisions are critical.
4. Sales Channels
Since most athletes will sell their products through the Internet, the main channels through which they can drive scalable traffic to their e-commerce platform include:
- Social Media
- Email (e.g. Mailchimp)
- Affiliate Networks (e.g. CJ Affiliate, ShareASale)
- Custom Affiliate Program (e.g. Everflow)
- Guest Publishing (e.g. The Players' Tribune)
- Search Engines
- Paid Media (e.g. Google Display Network, social media)
5. Branding and Protection
If the brand is not yet in use, work with a qualified attorney to file for an intent-to-use trademark application with your country's official patent and trademark office, as well as other trademark applications in other countries, as early as possible — so as to obtain a priority date against potential future infringers.
Proceed by prosecuting the application through to approval by the office and deal with any issues the office's examining attorney may raise during the process, until commercial use of the brand has commenced. Common issues during this phase include:
- The examining attorney doesn't like how the goods or services are listed.
- The examining attorney cites a prior application or registration against the current application because he or she thinks it's too similar.
- The examining attorney thinks the applied-for trademark is merely descriptive — meaning, it does not function as a trademark absent secondary meaning or acquired distinctiveness as a source identifier, or as a brand, in the eyes of the public.
Once this happens, an attorney representing the athlete's brand typically goes back and forth with the examining attorney, sometimes filing a legal brief that contains arguments and evidence to make the case.
Next, implement protocols to police the brand and trademark across all relevant channels, such as social media, websites, and third-party marketplaces (e.g. Amazon).
Consider engaging the services of companies like Thomson Reuters, CSC or Wolters-Kluwer, which provide reports of new trademark applications, business uses, and domain name registrations that are similar to the trademark they have been engaged to "watch." An attorney can use these reports to decide if any potential infringements arise.
In cases where the brand and/or trademark is improperly used or infringed upon via social media, use the given social media channel's tools to flag the content for takedown. Depending on the nature of improper use or infringement, a cease and desist letter may be appropriate as well.
In cases where a domain name has been illegally obtained by a third-party individuals, demand they return the domain name to you effective immediately. If they do not comply, consider filing a Uniform Domain-Name Dispute-Resolution Policy proceeding, or other action, to recover the domain name via legal process.
6. Marketing Strategy
To maximize sales, word-of-mouth, repeat customers and lifetime customer value, an e-commerce marketing strategy should include:
- Social Media Marketing (Facebook, Twitter, Instagram, Pinterest, YouTube)
- Content Marketing
- Email Marketing
- Affiliate Networks (e.g. CJ Affiliate, ShareASale)
- Custom Affiliate Programs (e.g. Everflow)
- Co-Branding and Influencer Marketing
- The Converged Media Model
- Guest Publishing
- Search Engine Marketing
- Paid Media (e.g. Google Display Network, social media, native advertising)
- Third-Party Marketplaces (e.g. Amazon)
- Giveaways, Promotions and Gamification
As with any marketing strategy, the goal is to sync and systematize each of the individual parts, so as to increase the value of the whole.
About the Authors:
This article was co-written by Gregg Sultan, a Los Angeles-based lawyer who brings more than 20 years of experience to handling trademark, copyright, intellectual property, and new media and technology transactions; and Josh Hoffman, the Chief Strategy Officer at The Institute for Athlete Branding and Marketing.