INTERNET SALES OFFER ADVANTAGES TO BUYERS AND SELLERS

by: Clifford Mitchell

Technology has certainly changed the lifestyle of most Americans. E-mail transmissions and texting have almost made the personal phone call obsolete. Upgrades to cell phones have taken the mammoth bags that were limited because they had to be plugged in to sleek pieces that can browse the internet, chat, make reservations, get directions and many other tasks.

Upgrades to the system has made high speed internet possible for many rural communities. These services match the cowboy to the computer to facilitate business. Who would have thought most ranchers would carry cell phones a few years back? The internet is rapidly becoming another tool that allows ranchers to become more efficient.

“Technology in rural America is definitely more user friendly than it was two years ago. We can broadcast sales or cattlemen have access to the internet that didn't have it,” says Bret Spader, Director of Marketing and Special Services, DV Auction.

“It was a natural evolution for us. We made the commitment to having internet sales and we have definitely had growing pains fine tuning the technology and educating our customers,” says Todd Clemons, Producers Cattle Auction and Okeechobee Livestock Market, Okeechobee, Florida.

Utilizing the World Wide Web to market products is nothing new. Getting cattlemen to browse the internet was a challenge. Convincing some producers the internet could be as vital to their operation as a good working chute took time. Technological glitches in rural areas hindered some from taking advantage of an opportunity.

“We used to have board sales and we called them that because all the information was written on a poster board for the potential bidders,” Clemons says. “The internet is now our vehicle to market those calves. Dial up connections were obviously too slow for internet sales and we had some other problems with our system. I think the technology has finally caught up with the people we do business with because they trust the system and we are seeing more numbers with our sales.”

“Buyers make the internet sales work and we have to gain their trust,” Spader says. “We have seen the progression where cattlemen will preview the sale online and then phone in their bids maybe the first year; to trusting the system enough to bid online. The dollars generated from online sales increases every quarter.”

Consumer comfort or that trust factor is an important part of any business, but cattlemen are sometimes the last to take advantage of something new. For some, information based marketing helps producers reach some sort of comfort level before the product is purchased.

“Each online bull or production sale we broadcast has a link to the actual sale catalog and contact information. When a potential customer calls on a product he's already an educated consumer,” Spader says. “We have to pride ourselves with customer service and if there is a glitch in the program we have to fix it. We have a video tutorial to help first time users and we seem to be gaining trust. When someone signs on and watches an online sale, more than likely they will buy online in the future.”

“We knew the internet was a wave of the future and we had to bite the bullet. We have concentrated on building relationships and trust,” Clemons says. “There are a lot of advantages with internet marketing. All the information is right there. It helps buyers and sellers become more efficient.”

“We formed Florida Heritage Beef, LLC which consists of eight ranches to market cattle. We handle cattle the same from a Beef Quality Assurance (BQA) standpoint and have similar genetics. The internet is a good venue to market our cattle,” says Mike Milicevic, Lykes Bros. Inc., Okeechobee, Florida.

Research or as most say “doing your homework” is still a big part of the equation. Internet sales could be convenient for some, but a certain level of confidence must exist when commercial operators are buying or selling.

“I want to know the people I am dealing with if I purchase bulls through an internet sale. When I look at a DVD or video online of the bulls selling, I can see conformation, but I can't see soundness or frame size,” Milicevic says. “I have to trust my seedstock provider and he needs to know what I want. It's definitely a good tool, but go visit these ranches, see their cattle and build a relationship before you buy.”

“Looking at the bulls that are available and their information is a very helpful tool in the selection process. Potential customers can log in, see the cattle along with the relevant information,” Spader says. “Our site is also a good tool for commercial cattlemen to monitor the feeder calf market and view a real time market report.”

Some advantages to using the internet to purchase seedstock or market the calf crop seem obvious to the cost conscious cattleman. The expense side or cost of production is currently in a fit of variability, any savings or eliminating a step in the process should help producers.

“When producers sell cattle off the ranch, they save some in expenses. The internet is lower commission than we charge here at the barn. Age and source premiums are also available for those willing to the extra work,” Clemons says. “We try to do whatever we can to get producers the most for their calves. There is a lot of flexibility with internet marketing and producers can sell when they want to take advantage of the market.”

“If I have to buy a $500 or $600 plane ticket or buy $3.50 per gallon gas to go buy bulls it adds to my expenses. Buying bulls on the internet is easier in a lot of ways, but I still need to know my seedstock source,” Milicevic says. “Marketing calves via the internet is easy on my management team. I look at when we work calves, work toward a target weight and plan accordingly. I can pre-plan a shipping schedule based on when we market and it works great. I like the flexibility when I am selling calves because you can get in and out of the market.”

“The bulk of our business is aimed specifically at commercial cattlemen. We have three different camera angles when we broadcast a sale or the bulls have been pre-recorded,” Spader says. “We broadcast a weekly sale from 52 different livestock auctions around the country. Commercial producers can see how calves are selling in his area.”

Time constraints are another restraint for most cattlemen. Demands from both the ranch and family sometimes overwhelm even the most organized operator. Viewing internet sales and conducting business in this manner will hopefully free up some weekends.

“In addition to expense, time is a big deal for me. I can spend two hours watching a sale buying bulls vs. travelling one day then the sale and travelling another day. The nearest airport is two hours away and if I get in late, it's not very convenient,” Milicevic says. “It doesn't enter my mind to pay a little more for a bull if I don't have the extra expenses, but I am probably willing to give a little more for a bull if I get to spend more time with my family. Bull sales, unfortunately, happen on weekends when there are family activities planned, if I can do both it's a lot better.”

“Commercial cattlemen can shop for bulls any time they want and not have to spend time or money travelling to the sale,” Spader says. “Buying bulls via an internet broadcast is a safe, convenient way to do business.”

The educational process of utilizing the internet as a marketing tool did not begin and end with the customer. Experienced sale staff had to change the way they conduct a sale to help potential bidders follow the auction.

“With our system buyers can bid as the sale happens. We had to make our system more user friendly and there is always someone available to answer questions through private chat,” Spader says. “Auctioneers had to train themselves to communicate with the internet audience so the person online knows exactly where he stands.”

“Our system is automated and triggered by buyer activity,” Clemons says. “This works well and we usually sell a lot about every two minutes when we have our internet sales. The sale doesn't drag out and cause people to lose interest.”

Finding the right audience is a challenge in any market endeavor. The internet provides advantages some venues do not have access too. The extra promotion garnered through this web based marketing tool is hard to put a dollar figure on.

“We offer exposure to more buyers and it's a good tool for the livestock auctions to promote to wider audience every week,” Spader says. “Buyers are very comfortable bidding online.”

“We're trying to get our name out there, when we market calves under the Florida Heritage Beef name. The internet exposes our product to more people and the video on the calves shows we have top end cattle,” Milicevic says. “To get the most for our calves, it takes everybody from the small farmer feeder to the large commercial feedlots. The internet helps us reach that audience.”      

Even though internet auctions may not be the traditional “block and mortar” sale barn way of conducting business, capturing value for a group of like managed calves is still the goal. Unlike some programs in the beef business, internet sales are not biased toward smaller producers.

“Larger producers that market a good group of calves will attract a lot of buyers and this helps the smaller ranches. There is a little more work involved in marketing loads of cattle on the internet, but it's usually worth it,” Clemons says. “If you are set up to market calves in the country our venue is a little cheaper and will expose your calves to a lot more buyers.”

Technology definitely plays a role in everyday lifestyles. Whether it's information on the weather, mapping a trip or ordering flowers for that special someone, it's usually only a “click” away. Cowboys monitoring bull sales or order buyers burning up data cards instead of the road may have been “Buck Rogers” like just a few years ago.

As producers struggle to swallow rising input costs, the World Wide Web or being computer savvy will become just as important as knowing breed average Expected Progeny Differences or pre-purchasing next years feed or fuel supply in the management scheme.

“We have a wide spread viewership and know how many people actually log in and watch a sale,” Spader says. “We have to sell convenience and our clients know they aren't out the expense to travel to the sale.”

“Our site and broadcasts are nothing fancy, but we are very good at attracting buyers and our system is very user friendly,” Clemons says. “The Okeechobee Livestock Market has been here a lot of years, but we have to stay up on current technology. We take advantage of the social media outlets like Facebook and have lots of followers. No matter how we sell them, it is our job to get top dollar. We know our representatives, they do business the way we do business and that's really important.”







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