Independent Wool Brokers Make Successful Transition To Online Wool Auctions
The North Island's independent wool brokers have made a successful transition to online trading this week by selling some of their wool on the Wool Online platform (www.woolonline.co.nz) rather than listing their entire catalogues at the traditional 'open-cry' auction held in Napier. While the market is still relatively low due to the on-going effects of Covid-19, the sale on Wednesday afternoon confirmed the platform is more than capable of handling larger quantities of wool offered by multiple brokers. A technical issue in the first few minutes of the sale resulted in it being reset and restarted, but thereafter the auction proceeded well with more than half a dozen of New Zealand's major wool buyers purchasing Lots.
This week's sale was the first time that independent wool brokers have utilised the system, breaking with over 150 years of open cry auction tradition. Wright Wool (Waipukarau), Kells Wool (Napier), and East Coast Wools (Gisborne) all listed catalogues of wool for sale, and despite the depressed market they were more than happy with the way the sale went. Group spokesperson Philippa Wright said:
"It was great to be able to finally make use of the platform. We've been watching Wool Online develop over the years, and have always thought that there's a need for the industry to move toward more efficient selling. Yesterday's sale demonstrated how simple and effective online sales could be, for everyone."
The brokers continued the tradition of displaying samples in the Napier showroom prior to the online auction for those buyers who wanted to physically see the wool, and Wright commented that "we'll continue to provide this option for as long as the buyers see the need. We'll keep the lines of communication open as we move forward."
For the past decade Wool Online has listed wool sourced exclusively from merchants of the WoolFirst network—New Zealand's federation of smaller, independent wool buying businesses dotted up and down the country. Canterbury-based wool broker Wool Connextions Ltd aggregates the various Lots from the participating merchants into a single sale catalogue, and has been selling to the main New Zealand buyers (exporters) on a weekly basis.
Ryan Cosgrove, a buyer from John Marshall & Co Ltd, one of New Zealand's wool exporters, said he was very happy with the way this week's auction went.
"We've been using Wool Online for years to purchase from Wool Connextions' weekly catalogue, but the additional ability of this new sale model to scale with extra volumes of wool, and the recently enhanced user interface of the platform means that it's a logical progression to make use of the system on a regular basis."
"With the additional support of more brokers, merchants and buyers this certainly has the potential to be a staple method of sale in the exchange of wool in New Zealand. We hope that widespread adoption will help reduce costs while maintaining the same price discovery and transparency for growers, with the same efficiency for buyers, as open-cry auctions do."
Over the past twelve months the Wool Online software has been upgraded to enable any wool broker to list and sell on the platform. A new auction mechanism has been developed which more closely mimics the way in which an open cry auction proceeds, and this, along with other changes has made the system even more effective for both buyers and sellers.
Wool Online co-Director, and Director of software development company Golden Micro Solutions Ltd, Janet Udy said,
"The online technology of the Wool Online system sits on top of the 'Fleece' wool purchasing and sales software that Golden Micro initially developed in 1995. That software is used by wool merchants and brokers around New Zealand, and it provided the foundation on which we built Wool Online. It gave us a huge head start in bringing an effective and usable online system to the industry."
"The Covid-19 crisis has made everyone realise that there can be situations when it's simply not feasible or desirable for brokers and buyers to travel to Napier or Christchurch for the traditional open-cry auctions. The Level 3 and 4 lockdowns has helped focus the industry's mind on the possibility of increasing the volume of wool traded online. Obviously Wool Online is well poised to play a central role by providing a modern and independent online platform, as we move forward."
The company plans to further refine and enhance the system, and will work in conjunction with both brokers and exporters to ensure it continues to provides a selling mechanism that works well for the entire industry.
Responding to a question about the future of the open-cry auctions Philippa Wright said:
"This week's sale doesn't mean we're going to completely move away from the traditional open cry auctions immediately. I'm well aware of the difficulties that change brings, but it does prove that Wool Online is a suitable online option that the industry can confidently get behind."