Growing New E-commerce Tenants

Transcription

1 Growing New E-commerce Tenants Moderator: Curtis Spencer IMS Worldwide, Inc. Panelists: Steven Hong, Slyvane Hadi Irvani, PeachDish Michael Landsburg, NFI Industries

2 Curtis Spencer IMS Worldwide, Inc. Curtis Spencer is the President of IMS Worldwide, Inc., headquartered in Houston, Texas. He is a nationally regarded expert on matters related to: logistics and intermodal shipping trends, ports, inland ports and rail-served logistics centers; the development and utilization of Foreign-Trade Zones for importers and exporters; and all aspects of customs issues and compliance, specifically those related to homeland security.

3 Growing New E-commerce Tenants Moderator: Curtis Spencer IMS Worldwide, Inc. Panelists: Steven Hong, Slyvane Hadi Irvani, PeachDish Michael Landsburg, NFI Industries

4 Steven Hong Sylvane Steven Hong is the President of Sylvane.com, an online retailer that specializes in appliances in the air treatment segment. He received his bachelor s degree from the University of Pennsylvania and his MBA from New York University. He started his career as a consultant with Accenture but he has spent the last 11 years of his life dedicated exclusively to ecommerce.

5 Hadi Irvani PeachDish University of Virginia- Economics Success with Okabashi Brands $1.5M to $4M and CountryClubPrep.com $0 to $5.6M, PeachDish $0 to $100M Loves Entertaining Shipping is Key to Scaling

6 Michael Landsburg NFI Industries Michael Landsburg is the Vice President of Real Estate for NFI and has been with the company since He is responsible for managing the real estate activities for the company comprised of an owned and leased portfolio of over 23 million square feet located throughout the United States & Canada. Prior to NFI, Michael was an acquisitions and development associate for a mid- Atlantic commercial real estate company for 4 years where he was responsible for leasing transactions, sourcing and performing financial analysis for new development and acquisition opportunities. Previous professional experience also includes work at a boutique investment bank where he was an analyst for an international fixed income portfolio and work for Citigroup analyzing their real estate portfolio in Mexico, both positions located in New York, NY. Michael is a graduate of the Wharton School at the University of Pennsylvania and is a licensed Real Estate Broker in New Jersey. He is active in the industry organizations NAIOP, Corporate Real Estate Network (CoreNet), and Council of Supply Chain Management Professionals (CSCMP) along with being a Committee Chair for the Industrial Asset Management Council (IAMC). Michael also serves on the Board of The Kellman Brown Academy and is an active volunteer for Serve Philadelphia and the Boys and Girls Club. He lives in Philadelphia with his wife and 2 young children.

7 Sylvane An E-commerce Life Story

8 Agenda About Us Life Story: Changing needs for space Reliance on and experience with 3PLs Sales tax

9 About Us Online retail: Air treatment appliances Founded in 2001 in NJ Headquartered in Roswell, GA $20M+ in sales 30+ Employees

10 $20,000,000 Sales $15,000,000 $10,000,000 $5,000,000 $-

11 2001: Bedroom Office (Birth) One person & two jobs No room for inventory All drop shipments

12 2002: First 3PL (Potty Trained) Found through word of mouth Allowed minimal storage and order volume ed orders and tracking information

13 2004: Full-time (Awkward Pre-teen) Move to GA: lower labor costs Sales tax - better for us in GA Basement office

14 2005: Second 3PL Support higher volume Support higher quality of service Support better systems integration Goldilocks In northeast concentration of customers

15 2006: 1200 sq ft (Teen w/ Zits) Was at $3.5M out of my basement Needed a real office for recruiting Needed a real office for vendors Short-term lease (yearly) in Marietta

16 2007: 6000 sq ft Flex (Senior in HS) Roswell, GA Relatively near employees Atlanta & university talent Short-term lease (3 year w/ 2 yr exit clause)

17 2007: Third 3PL + Sales Tax Sales tax legislation forces a change

18 2011: sq ft Flex (College) Roswell, GA - near previous office 5 year lease (w/ exit clauses at year 3 & 4) Nicer office for recruiting Fulfillment on training wheels (high ceilings, dock high doors)

19 2015: sq ft Flex (1 st Job!) Roswell, GA - near previous office 5 year lease In opportunity zone - tax credits Spending money on a cool interior

20 2015: Utah 3PL Quicker and lower cost delivery Sales tax considerations Large enough to handle growth Okay starting small

21 3PL Lessons Learned Sales tax Goldilocks Financial stability Technical and process integration We can do it cheaper - but time to market, necessary scale, speed of delivery

22 2020 Projections (?) Sylvane will be a $50M+ retailer Customer expectations on delivery speed Additional office space. Additional 3PL usage Company-run facility out west National sales tax

23 Contact Info Steven Hong

24 A Fast Story about Gourmet Slow Food Shipped Direct to consumers for Mise En Place Cooking Fast Growing Meal Kit Industry

25 2013 June: Garage Office (Birth) Customer Focused Imperfect Focused on Packaging Innovation- PATENT PENDING Lots of Lessons learned 300 SQ FEET Mystery 3 Course Dinner

26 2013 August: Initial Outsource

27 2013 December: Move 1 Outsource Partner Focus on Recipes Leverage Amazon Payments Technology No longer a Mystery Box

28 2014 July: Move 2 Outsourcing Wasn t Working Start Farm To Table More Menu Options- Vegetarian, Choose Menus AMAZING CHEFS

29 Jan 2015 Move 3, 4 Right Sublease- Refrigerated Warehouse Clean Space Inspectors on Premise Able to Expand and Automation of Machinery 1800 plus shipments a week 5+ Menus a Week

30 Competitors Space - Growing Company Founded Space Warehouses Competitor ,000 3 Competitor ,000 4 Competitor ? 3 PeachDish ,000 1

31 2016 and Beyond Multiple Warehouses 10,000+ Shipments a Week $10-50M Business Happy Customer + Good Food NAIOP to Save $10

32 NFI Industries

33 The Retailers ecommerce Fulfillment Decision Tree In-House Hybrid Outsourced Description Typically own or lease warehouse space to fulfill online orders; may combine effort with exiting distribution center network. Typically own and manage web platform, payment processing and inventory management. Typically outsource transportation to an integrator or a last mile provider. Typically utilize a third-party fulfillment company or several companies to manage inventory and fulfill orders for some or all of ecommerce sales. May or may not own or lease warehouse space to fulfill easier managed SKUs or to diversify their supplier concentration. Elect to outsource various services. Typically utilize a third-party fulfillment company or several companies to manage inventory, fulfill orders and process payments for all ecommerce orders. May also outsource customer service function including returns and call center services. May or may not manage web platforms. Representative Retailers Typically perform most services in-house except delivery May provide one or many services inhouse, typically outsource fulfillment and delivery. Outsource nearly all services, including payment processing and in some cases, customer service.

34 Distribution/Fulfillment Center of the Future Substantial Capital investment of rack/conveyors/mezzanine/automation/parking Term commitments for 3PLs (typically 3-5 years - does not work with substantial capital requirements or specialized building improvements) Pace of change and technology improvements

35 Challenges and Opportunities of the Technology Interface Between Ecommerce and Supply Chain

36 Driver Shortage Commercial Real Estate Impacts Driver Labor Shortage & Surplus Y/Y % change January 2012 through Present Source: FTR Transportation Intelligence, Stifel Analysis What does this mean? Location impacts for site selection getting drivers home Improvements to driver facilities within the industrial complex larger & better break rooms, lounge areas, check in/out accommodations, truck queueing and parking areas

37 Campus Benefits Labor/Resource Sharing (especially during peak periods) DC/FC utilization and inventory management wholesale/retail/ ecomm dynamics

38 Q&A This is your opportunity to make this session exactly what you need it to be Ask the question. Please note that this session is being recorded, so before speaking, please either proceed to a standing microphone or raise your hand and wait until a mic runner reaches you. Thank you!

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40 Thank You! Curtis Spencer President IMS Worldwide, Inc. (281) Steven Hong President Sylvane (770) Michael Landsburg Vice President of Real Estate NFI Industries (856) Hadi Irvani Founder PeachDish