Phoenixmart Converge July 2015

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JULY 2015

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I am delighted to introduce you to the first installment of PhoenixMart’s monthly newsletter Converge. This issue symbolizes the exciting growth taking place at PhoenixMart. Just as the word “converge” describes several people or things coming together from different directions or places, PhoenixMart is the physical location where this process will happen for multiple industries, benefitting everyone involved.

STEVE GARDNER Chief Operating Officer

You’ll want to take special note of several items while flipping through this month’s pages. In one article, we have described a PhoenixMart concept—industry convergence—so that readers can understand the incredible opportunity in vending with us. Our main article features construction expert Kelly McCandless and explains who would shop at PhoenixMart and why they would go there. As one of the thousands of buyer’s representatives who are expected to frequent our corridors, Mr. McCandless points out how PhoenixMart could have saved him millions.

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This month’s issue also contains a special “PhoenixMart Focus” section where we’ll be spotlighting companies or products that are new to PhoenixMart. We’ll also introduce readers to people who are vital to PhoenixMart processes.

With our July issue I am especially pleased to see two of PhoenixMart’s newest tenants and preferred vendors taking center stage: leading signage company bluemedia and logistics efficiency finder Supply Chain Solutions, Inc. (SCS). These two topnotch service providers are superb resources for PhoenixMart tenants, vendors, and buyers.

PhoenixMart continues to lease to excellent companies from around the world. However, it will become more difficult to get premium locations as we move closer to full capacity. These are exhilarating times for PhoenixMart and for the dozens of industries represented. I am honored to be a part of such a visionary, breakthrough project and enjoy giving my best to lead this venture forward.

Sincerely,

INSIDE featured

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BUYER PROFILE: KELLY MCCANDLESS

Kelly McCandless completed the NorthPoint Apartments project in 2015 at a total cost of $55 million. Could he have built the complex for less without sacrificing quality? With PhoenixMart, Mr. McCandless believes the answer to that question is a resounding “yes.”

ABOUT PHOENIXMART

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PhoenixMart is the leading example of a 21st

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Century global commerce center combining retail, wholesale, amenities and entertainment in one convenient location. Manufacturers, distributors, wholesalers and retailers have unparalleled access to thousands of buyers within the U.S. and across the globe.

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CONTACT 7047 E. Greenway Parkway Suite #190 Scottsdale, AZ 85254 602-663-9219 info@phoenixmart.com phoenixmart.com

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Volume 1, Issue 1 July 2015 Editor/Publisher: Write Margin Media Designer: Katie VanMeter

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Industry Convergence With today’s vastly growing global market, it is no longer feasible to devote time and money to travel across the world in search of the ideal product. This is where PhoenixMart’s model of “industry convergence” comes in.

PHOENIXMART Focus Each month Converge will feature exciting companies or influential people that keep PhoenixMart running. This month Converge is proud to spotlight two of PhoenixMart’s newest tenants and preferred vendors: premier signage company bluemedia and logistics standout Supply Chain Solutions, Inc.

Community Connections: Entertainment Everyone associated with PhoenixMart has deep roots in the surrounding cities as well as the state of Arizona. In this issue, the section spotlights the entertainment dimensions of PhoenixMart.

About the cover: A conceptual rendering of the southeast exterior corner of PhoenixMart, due to open doors by June, 2016. All renderings in the newsletter are conceptual and not necessarily final designs.

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//PHOENIXMART in Brief

INDUSTRY CONVERGENCE Bringing together the personability of trade shows and the efficiency of online shopping

And while trade shows are one way that buyers and sellers can meet in a centralized location, they are far from being the most streamlined and cost effective model for consumers, including wholesale buyers, looking for a variety of high quality products. Trade shows are often specialized to one type of product, so buyers must spend more money traveling to multiple shows. And even then buyers are not guaranteed to find exactly what they need. Although the Internet may seem like an alternative solution that cuts costs and enhances efficiency for both businesses and consumers, online shops cannot replace the consumer’s ability to see products up close and talk with business owners face-to-face.

This is where PhoenixMart’s model of “industry convergence” comes in. Bringing together the personability of trade shows and the efficiency of online shopping, industry convergence provides businesses and consumers with a one-stop shop to find high quality, customizable products at reasonable prices. The easiest way to understand industry convergence is to think about your smartphone. Before smartphones we had to carry around a phone, a camera, a laptop, and many other devices to get multiple tasks done.

But now all of these separate devices have been brought together, or “converged,” into one easy

to use device. PhoenixMart is doing the same thing, but with businesses. Now instead of going to many different wholesalers and trade shows across the country, buyers can find everything they need for their business—lighting, fabrics, office supplies, print services, you name it—all in one physical location.

Industry convergence not only adds a layer of convenience and efficiency to business, but it also allows for creative collaboration. With 2,000 plus companies housed under the PhoenixMart roof, the consumer has the unique opportunity to bring businesses together to create the ideal product. Instead of being limited to each individual business’ inventory and customizing options, the consumer can choose a chair for their new restaurant in one store and then pick the perfect fabric out from another business a few storefronts down. And because buyers can see the physical products, there is no secondguessing about quality.

For consumers, the industry convergence model is the most efficient and reliable way to shop.

While for businesses, industry convergence is an easy way to cut costs: sellers no longer have to travel from trade show to trade show in hopes that some of their product will be sold, and they also have the opportunity to collaborate, which can expand the reach of their products. Serving both companies and consumers, the industry convergence model helps businesses evolve to keep up with the global marketplace.

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With today’s vastly growing global market, it is no longer feasible for companies to devote time and money to travel across the country (and world) in search of the ideal product.

The easiest way to understand industry convergence is to think about your smartphone, where all of these separate devices have been brought together into one easy to use device.

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BUYER PROFILE

Kelly McCandless Who will shop at PhoenixMart?

Why go there? These are two questions potential PhoenixMart tenants want answered.

While PhoenixMart could go on and on at length about the game-changing business model, the efficiencies to be gained, and the money that is ultimately saved, these elements are often discussed in the abstract.

The PhoenixMart “Buyer Profile” series takes a different approach. The focus here is on real people who do not work for PhoenixMart, but would love to shop there. They are all potential buyers who explain what they do and how

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PhoenixMart can help. In this “Buyer Profile” PhoenixMart introduces building construction expert Kelly McCandless.

Kelly McCandless was hired as an owner’s representative to oversee the development of a large construction project in Rexburg, Idaho.

Designed to attract college students from the nearby university, the four-building complex was to have everything the average young adult could need—and more. NorthPoint apartments would feature quiet study areas, comfy TV lounges, and large game rooms. It was even to have furnished music rooms with pianos and a state-of-the-art workout facility. Mr. McCandless completed the project in 2015 at a total cost of $55 million.

//Buyer Profile Could NorthPoint have built the complex for less without sacrificing quality? With PhoenixMart, Mr. McCandless believes the answer to that question is a resounding “yes.”

PhoenixMart Saves Time and Money

PhoenixMart interviewed Mr. McCandless about his building process and how PhoenixMart could have saved him money had it been a viable option for him when he first began planning in 2009. For those unfamiliar with the construction process of such a large operation, Mr. McCandless offered a quick set of steps that are typically found in most building projects. Speaking in broad terms, he identified seven building phases.

Mr. McCandless began with property acquisition.

For NorthPoint, phase one meant purchasing 11 different properties in Rexburg. Then came the design and conception phase. In addition to creating the blueprints and schematics, this included examining budgets and contacting the municipality. Eventually he would need to recruit various engineers, architects, and designers to advance the project into phase three: assembling the design team. It is during this phase that design details were decided, included the creation of color boards and a clear sense of conceptual unity for the buildings.

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MULTIPLE MEETINGS WITH MANY BIDDERS

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Although some suppliers were local to Rexburg, many were not. Mr. McCandless found himself

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Assembling the construction team and selecting the materials was the fourth phase. This not only included finding a general contractor or manager, but it also included finding, quite literally, the “nuts and bolts” needed for the project. This phase is perhaps the most detailed and time consuming in terms of purchases.

For Mr. McCandless, he needed bidders to understand the color boards, design, and layout, and then bid accordingly. To get a sense of this project’s scope, one may look at flooring as an example. In a typical project of this size there are several different types of flooring: tile for the front entry, tile for the public bathrooms, industrial carpet for the hallways, plush carpet in the bedrooms, and linoleum in the apartment kitchens and bathrooms. There would also be specialized flooring in the game rooms, workout facilities, and music rooms. Mr. McCandless took bids from various subcontractors who would propose flooring packages that matched his needs. He then repeated this process for every line item in the build. While packaging made things more efficient, the process still involved several bids and decisions made by subcontractors.

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traveling hundreds of miles to meet for faceto-face interviews before accepting a bid. Now imagine what the entire phase looks like when one introduces the other supplies needed for the project. Mr. McCandless accepted bids for lighting, plumbing fixtures, cabinets, doors, knobs, hardware, paint, molding, blinds, siding, rock finish, and countertops, just to name a few items that come to mind right away. This is not to mention the furniture, music equipment, exercise equipment, television sets, whiteboards, and the host of other needed items. For a project of this size, there were hundreds of line-items. When one considers that each of these items received several bids, it is easy to see why the process is so timeconsuming and sometimes inefficient. While this approach allows someone like Kelly McCandless to have a great deal of control over his selection process, it also involves a great deal of travel and takes a great deal of time to complete.

Construction is the fifth phase. Mr. McCandless hired dozens of skilled workers to execute the designs from phases two and three with the materials purchased in phase four. However, not all four buildings were built at once. Instead, the construction team assembled one structure at a time, allowing for a repeat of step four for three additional buildings. Mr. McCandless found himself securing new bids and selecting new suppliers and materials for various reasons. This involved a great deal of travel and took a great deal of time to complete. Taking additional bids also meant that there were times in the building process where workers were not operating as efficiently as they could have been. And this is not necessarily the fault of the staff. While seeking out new bids on a supply, the skilled workers sometimes found themselves waiting for additional materials or for a decision to be made about what was to happen next. Because the supply chain was sometimes inefficient or time consuming, this meant the actual building process was also sometimes inefficient and time consuming.

In 2015, North Point had finally moved into the final two phases: commissioning and A PHOENIXMART PUBLICATION

management. The buildings were opened to tenants and any remaining shortcomings were addressed quickly. Once commissioned, a general manager was hired for the complex and Mr. McCandless could call his job complete. But how does PhoenixMart fit into this process? With PhoenixMart, Mr. McCandless and the owner could visit for a week or two and receive bids from dozens of vendors, if not hundreds, without the inconvenient need to travel hundreds of miles several times. Designed to be a one-stop industry convergence hub, PhoenixMart could have saved McCandless one of the most important resources of any project: PhoenixMart could have saved McCandless time.

Mr. McCandless explained that he could have shaved a month off of his total construction time with the first building. Remember phase four of the traditional process? Rather than having to travel hundreds of miles several times to interview potential suppliers and service providers, he could have simply made one trip to PhoenixMart. With multiple suppliers in a single location Mr. McCandless could have received bids, inspected sample products, and conducted his face-to-face interviews with ease. According to Mr. McCandless, a one-stop location “could have cut out 30 days” from his timeline.

Ultimately, saving time also means the project saves money. One way PhoenixMart could have saved Mr. McCandless money relates to the savings on labor.

In the design and conception phase there are four executives involved with the project; in design team phase 10 engineers and architects are added; in the next two phases there are at least 60-100 skilled workers. Here is a conservative budget breakdown of savings according to Mr. McCandless: • 4 executives x $16,600/mo. = $66,400 • 10 design team members x $6,600/mo. = $66,000 • 60 skilled workers x $4160/ mo. = $249,600 SUBTOTAL = $382,000 While the subtotal is a welcome savings, one must remember that this is the estimate for a single building. By the time one multiplies this amount by four, the savings become quite impressive, totaling $1,528,000.

//Buyer Profile PhoenixMart would have saved Mr. McCandless money in additional ways as well. He also could have benefitted from custom products in a way that is not sufficiently captured in the typical building process. For example, coordinating the production of a unique NorthPoint lighting fixture by having a glass supplier work with a lighting components manufacturer would now be easier in the PhoenixMart scenario. These companies do not have to travel hundreds of miles to coordinate their efforts because they are already neighbors in this single location.

Mr. McCandless could have easily given several bidders the color boards and design specifications and had furniture, fixtures, flooring—everything he needed— custom made. If there was a problem communicating his message or coordinating the various suppliers, Mr. McCandless would not need to travel hundreds of miles or have them travel hundreds of miles. Instead, with PhoenixMart all parties could simply visit the mezzanine, meet, and come to an agreement. If there was a technical question someone could not answer immediately, the solution is as simple as going down the escalator to find someone who has the needed information. These customized, quality products are simply cheaper and easier to produce when the process used to build them is PhoenixMart efficient.

Total Savings? $2-5 Million

When PhoenixMart asked Kelly McCandless how much he thought he would have saved if he could have traveled to PhoenixMart when he began the NorthPoint project, he conservatively estimated he would have saved $2-5 million. Thousands of builders like Kelly McCandless understand the benefits of PhoenixMart. Thus, every builder is a potential buyer, and every buyer is a reason companies will want to be in PhoenixMart. More accurately, given the estimate above, companies will have several million reasons to visit PhoenixMart on a regular basis.

PHOENIXMART LABOR

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SAVINGS

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 EXECUTIVES x $16,600/MO. = $66,400

  DESIGN TEAM x $6,600/MO. = $66,000

      SKILLED WORKERS x $4,160/MO. = $249,600

$382,000 SAVINGS

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PHOENIXMART

An example of a

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bluemedia building wrap. (FAR LEFT) bluemedia also provides outstanding fleet design execution.

(LEFT) bluemedia’s signage for the Super Bowl.

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//PHOENIXMART Focus

FOCUS

Each month Converge will feature exciting companies or influential people that keep PhoenixMart running.

In April of 2015, PhoenixMart proudly announced Tempebased bluemedia as the official signage service for its growing list of top-tier tenants. With a primary focus on events, retail, and fleets, bluemedia is a full-service signage powerhouse, designing, printing, fabricating, and installing signage and décor for the biggest events and businesses in the world. As PhoenixMart’s signage provider and a newly signed preferred vendor, current and prospective PhoenixMart tenants will benefit from bluemedia’s resources and expert approach.

Every good marketing campaign first begins with a good idea. But what happens next? How does a company go from an idea to the creation of the right kind of signage needed to communicate that idea in the most effective fashion? With bluemedia’s award-winning team of design experts, they can make any marketing strategy look good. Whether it is a simple banner or a giant building wrap, bluemedia helps businesses solve the most difficult problems with creative signage solutions. PhoenixMart tenants will experience bluemedia’s prized design team at work first hand.

Great signage is not just about great design. It is also about installation and execution. bluemedia has spent years investing in the right infrastructure and state-of-the-art equipment to meet any kind of signage need. And once you have ordered brand specific signage from them, they will retain your design information for future use. At PhoenixMart businesses may launch one marketing campaign using bluemedia banners, and then later launch a fleet campaign without redesigning every graphic. Imagine a company that begins with store banners, but then later decides to add similar graphics to the doors of its trucks. bluemedia and PhoenixMart make the coordination and execution easy.

With bluemedia as their service provider businesses can be certain they will receive high-quality signage regardless of their project’s size. How can one be certain of bluemedia’s ability to deliver? The 17-year-old company has proven they have the passion and experience to achieve what other companies deem impossible. bluemedia’s name was everywhere last year after landing a sizable contract with the National Football League (NFL), which included the signage and décor program for Super Bowl XLIX in Glendale, as well as many of the print elements found at Verizon’s Super Bowl Central in downtown Phoenix—150,000 sq. ft. of vinyl material spread across five skyscrapers, nearly five miles of branded fence mesh, a 20-foot-tall custom fabricated football, even a crop circle bearing the Super Bowl logo. The company has since been contracted to provide the signage and décor for Super Bowl 50 in San Francisco next year, and Super Bowl LI in Houston. If bluemedia can deliver for the NFL, they can deliver for any business.

While the NFL is a great example of how bluemedia has delivered great products recently, their history is not limited to one or two high-profile companies or events. The company’s national client roster includes VISA, Circle K, Microsoft, Target, Pepsi, T-Mobile, Jack Daniels, Coca-Cola, and a variety of sports leagues and properties, including the San Diego Chargers, Kansas City Royals, as well as local favs the Arizona Diamondbacks and the Arizona Coyotes. With a superb industry track record, PhoenixMart tenants can rest assured that bluemedia services are the best offered in the country.

To learn more, or to view their latest products, services, and news online, please visit bluemedia.com.

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Two months ago Supply Chain Solutions, Inc. (SCS) became PhoenixMart’s official on-site logistics provider. A newly signed preferred vendor, SCS takes pride in finding efficiencies throughout the supply chain that save both time and money.

SCS helps “Grow your company. Reduce your costs. Deliver real value.” Based in La Crosse, Wis., SCS was ranked on the Inc 5000 list of fastest growing companies in 2014. Whether it is supply chain consulting, transportation management, or distribution management, SCS has the expertise needed to successfully meet the logistical needs of all PhoenixMart tenants. With SCS, business supply chains become efficient, value performance chains. But how do they do this?

Before a business supply chain can reach peak performance, a business must first know where it has inefficiencies and

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what goals are realistically achievable. But this is often a difficult task. Some companies are so used to “business as usual” it often prevents them from observing where they can streamline their processes. Other businesses do not know what benchmarks are standard for their respective industries.

SCS specialists have years of experience collaborating with companies to identify and maximize efficiencies. They conduct in-depth consultations to identify potential supply chain efficiency areas. When needed, they provide the necessary information about how a business can monitor and measure its progress. Not only does SCS know what benchmarks are best, they also have the technological knowhow to help PhoenixMart tenants get there. But it’s not just a matter of finding and measuring efficiencies. SCS also manages transportation and distribution.

Whether a company needs to distribute products by trucks, trains, ships, or planes, SCS offers an open book cost-plus operating model. In other words, they will deliver regular reports to PhoenixMart tenants so they can monitor their distribution channels. SCS knows which performance indicators are the keys to success. With SCS at the helm,

//PHOENIXMART Focus

deliveries are cost-effective and on time. And if a new business is unsure of which transportation mode is best, SCS provides them with the answer based on historical data and a wealth of experience. Given PhoenixMart’s close proximity to interstates, rail lines, and airways, SCS and PhoenixMart tenants are located in an ideal geographic location. SCS will even help PhoenixMart tenants select the best routes, monitor delivery status, and choose the best carriers.

SCS not only leads its field in terms of identifying inefficiencies and managing and monitoring distribution modes, but SCS also leads the way for inventory management and warehousing. With strategic partners in Europe and Asia, SCS can also handle the largest importing and exporting needs. From dock to door, SCS finds the best way to handle freight costs, port charges, fees, and insurance, all with the goal of reducing costs and saving time.

SCS has been optimizing supply chain efficiencies for years, and for some of the world’s largest companies.

Saving a Fortune 1000 company over $5 million in shipping costs by improving its supply chain is one notable SCS

accomplishment that allows them to stand out as an industry leader. In addition, SCS provided another valuable asset — a revenue sharing program — increasing the company’s revenue by over 15 percent. SCS also helped a polymers and plastics company grow from 3 employees and almost no reach to over 50 employees, global sales and distribution, and nearly half a million dollars in savings by helping the business better manage its warehousing and distribution services.

For a manufacturer of semi-trailers, SCS saved the company 12 percent over the course of a year. For another company SCS found a way to free up $22 million in cash to deal with fluctuating demand. Time and time again SCS has performed at the highest levels.

PhoenixMart is excited to welcome SCS as a preferred vendor.

Tenants will save millions of dollars and a great deal of time with SCS leading the way.

For more information about Supply Chain Solutions, Inc., visit SupplyChainSolutionsUSA.com.

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COMMUNITY CONNECTIONS

An Entertainment Destination A PHOENIXMART PUBLICATION

//Community Connections With all of the business buzz surrounding PhoenixMart, it is sometimes easy to forget that the company and employees are about more than just commerce.

Everyone associated with PhoenixMart has deep roots in the surrounding cities as well as the state of Arizona. In our Community Connections section, we wish to showcase the lighter and more personable side of PhoenixMart, one that is concerned not with how people work, but with how they live, laugh, and play.

When the plans for PhoenixMart were initially created, wholesaling and retailing were the first things that came to mind. However, entertaining was quickly added to the list. After all, what better way is there for a buyer to spend his or her evening after collaborating with industry leaders than to join them for a meal at one of the nearby restaurants? But the food and beverage services are not just for buyers and sellers. All members of the surrounding communities are welcome.

After dinner, one may also enjoy a leisurely stroll through one of the nearby open areas to view some of the many sculptures and works of art.

Perhaps the biggest entertainment advantage to PhoenixMart is its size. The town centers and exhibit hall are remarkable indoor resources that will host trade shows, conferences, public speaking events, and product launches, to name a few occasions that may be of interest to the nearby cities. Local civic and community groups are also invited to use PhoenixMart’s amphitheater and several open spaces to put on

festivals and performances. Should they find it appropriate, they may even decide to use an indoor portion of the location typically reserved for tradeshows. Does your local high school wish to have a field trip where students learn about economics and business? Does your community theater group need a place to rehearse or put on its show? Do you need a place to celebrate a milestone achievement? PhoenixMart is the ideal place for all of these events and more.

If one needs something more private, the mezzanine provides some distance between the event and passersby. Of course, all of this will depend on scheduling them in advance to avoid any conflicts. The PhoenixMart event calendar makes all of that information publicly available and easy to find.

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In this issue, our Community Connections section spotlights the entertainment dimensions of PhoenixMart and what residents in nearby towns may find beyond wholesaling efficiency and product manufacturing. Although walking the corridors of varied products from 12 different industries may be fun for the shopping, visitors will also find a location that has some of the most engaging entertainment venues in the surrounding areas.

PhoenixMart is not just a retailing and wholesaling location; it is also an entertainment destination for buyers, sellers, and members of the community.

Finally, because PhoenixMart is the centerpiece of the North American Logistics, Trade, and E-Commerce City (NALTEC), it is in close proximity to several planned developments, including a resort and spa, movie theater, and health club with sports facilities. Once NALTEC is complete, employees will proudly say that not only do they work at PhoenixMart, but they play there as well.

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7047 E. Greenway Parkway Suite #190 Scottsdale, AZ 85254 602-663-9219 info@phoenixmart.com phoenixmart.com Volume 1, Issue 1 July 2015

Preferred Vendor Program The PhoenixMart Preferred Vendor Program consists of strong relationships with world-class providers of over 100 plus services being made available to PhoenixMart tenants. The program is designed to offer cost saving, business building services so that the PhoenixMart tenant companies can focus on their core business. The program has three levels of participation; Platinum, Gold and Pearl. The program benefits are based on the level of participation and include: PhoenixMart website visibility, various online initiatives, interior and exterior signage opportunities and special inclusion in our monthly newsletter, Converge.

If you are interested in helping PhoenixMart tenants grow as well as growing your business, contact us at 602-663-9219 or visit www.phoenixmart. com/preferred-vendor-program.

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