News

AuctionsPlus leader preparing online wool auction interface

Terry Sim, September 11, 2015
Anna Speer

AuctionsPlus CEO Anna Speer

AUSTRALIA’S online livestock and wool selling company AuctionsPlus is developing the systems needed for a live web-based interface with the nation’s physical wool auctions.

AuctionsPlus chief executive officer Anna Speer believes the company’s physical livestock interface sales could work efficiently with Australia’s physical wool sales and would like to provide this service as a pilot project — offering buyers a choice to be physically present at the sale or to bid online.

But as debate continues about the value and early findings of Australian Wool Innovation’s Wool Selling Systems Review among brokers, exporters, woolgrowers and AWI, Ms Speer believes there is a need for more collaboration and facilitated discussion on phased piloting of new initiatives.

AWI chief executive Stuart McCullough last week pre-empted the WSSR’s final report in November by offering to fund a new Wool Exchange Portal (WEP) if growers agreed and Australian Wool Growers Association Robert Ingram claimed there had been a market failure with only one system to sell wool online – Wooltrade, that he wanted to see opened up to competition. Mr Ingram also wanted the WEP discussed by AWI’s Woolgrower Industry Consultative Committee.

Ms Speer said she has seen many people take positions or make emotional responses on issues raised in the Wool Selling Systems Review discussion paper at a recent Melbourne forum.

“And we didn’t actually stop to enquire and understand what the real root cause and the real issues are here.

“Has there been a market failure? I don’t know,” she said.

Need for more education and collaboration

Ms Speer said perhaps Mr Ingram was unaware that wool was also sold through the weekly online AuctionsPlus Wool sales as well as the bid-and-offer board, Wooltrade. But she does not believe the WEP is being developed to compete with the AuctionsPlus wool marketing systems.

“I think there is a need for more education and more collaboration to really understand what the problem is.

“Is it the perception of competition that we are looking for? Is it that some people are ready to change and some people aren’t?”

Ms Speers believed the industry needed to conduct a session led by a strong leader and facilitator to try to understand what the root problems are and look at “piloting new initiatives that don’t disrupt the existing marketplace”.

“One of the things we would really like to do and I haven’t started the ball rolling on this at all.

“I’ve dropped it in conversation with a few people, but haven’t started pursuing it aggressively or progressing it in any way, shape or form — is just to provide an online component to the physical sale – the same way as we do our interface sales with livestock.

“So that everyone who visited a physical auction can continue to do so, but the people who want to try something a bit different can sit in their office or home and participate,” she said.

“Because by opening up wool to a national market or lowering the barriers to entry, but still doing what we do traditionally, we are trying a few new things and we are potentially getting more competition.

“Then just slowly build on it; one of the things that we try to do in this industry is find the complete solution without a little trial and error,” she said.

“We are better placed to pilot a few small initiatives without overhauling the existing structures to identify what might work and that way we can get buy-in from all participants and work together to identify the best initiatives moving forward.

“The open cry auction system is efficient, but the market has shown that we are highly sensitive to China – if we had more national or international competition would that have changed?” Ms Speer said.

Physical auction sales is good starting point

Ms Speer said with 95 percent of Australia’s wool going through the physical auctions, that’s where the industry needed to start.

“How do we get more people into say the Melbourne physical auction, is it through putting an online interface to that so that anyone in Australia can bid?

“Is it giving more people from India, from Europe access to be able to bid?”

Ms Speers said for the WEP initiative to succeed AWI needed to be bringing all industry stakeholders “along for the ride”.

“I can’t see that happening at the moment; why would a broker hand over to the WEP what they are charging people, what’s their incentive?

“We will support the WEP as I feel it is good for people to know what is available to them, to provide choice and exposure for AuctionsPlus,” she said.

“It’s good for me to show that by opening to a national market you get better prices and certainly we see that with livestock.

“I think they would be better off going back to basics and saying OK what are some of the little things we can start changing, then review them and keep building and building,” she said.

“It is teaching the whole team to collaborate.”

Prototype interfaces with auctions being considered

Ms Speers said the current sequential auction system would work as an interface with the physical wool auctions.

“We are just designing a new interface for that at the moment, we are actually looking at prototypes today.

“I haven’t started anything with the people who actually run the physical auction software and interface that you provide there,” she said.

“But we can set it up in much the same way that you would do with a physical stud sale, low cost and no impact to the existing system.

“We could do it as a pilot or proof-of-concept where we would just someone in the room taking all the online bids and pushing it up in the room,” Ms Speer said.

“And then get a feel for that; does it work, do people like it, is anyone using it?

“If the answer is yes, then let’s start automating it,” she said.

“We are just sitting here quietly agitating and saying, `hey guys, we can do this, we can do this tomorrow if you want to do it’, but there has got to be the interest in it.”

“There needs to be a bit of want to go down that path – otherwise why do it?”

Online interface doesn’t need the WEP

Ms Speer said an online interface with Australia’s physical wool auctions could be established independent of a WEP.

“It should be, it should be piloted and tested so that we get really good industry engagement for support, but also you need to engage with the people who are on the ground day-to-day to make sure that your systems work.

“There is no point building a giant solution and saying ‘Here, look at this, it’s awesome’,” she said, then taking it to the market and finding it is not wanted or used.

“That’s why it is so important to just do bite-size chunks.”

Ms Speers said AuctionsPlus’ new bidding system is being trialled by 10 top sheep and cattle buyers for feedback before it is rolled out further.

“There is no point doing these things unless you are going to engage with industry.

“I think the WSSR guys were engaging with industry,” she said.

“But where we started to struggle was being able to facilitate that review with exporters, brokers and growers with everyone having an emotional link to a component of the supply chain and not setting that up in a way that it was going to succeed.”

Initiatives needed to build trust and understanding

Ms Speer said the wool industry did not need to have a “whole solution” to all its selling system issues.

“You need to have a couple of initiatives that start to build trust and understanding.

“A lot of the people that we are dealing with aren’t really tech-savvy, so giving them a solution that they go onto the Internet to find the solution, probably isn’t the best solution,” she said.

“We are not good at working together and we are really not good at listening.

“Anyway we can try to help people slow down, understand and look at all the different things and slowly make changes; don’t try to change the world overnight,” Ms Speer said.

“Because you won’t get the buy-in in our industry, because we don’t like change.

“It’s a good start, at least everyone is talking.”

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Comments

  1. Peter Moresky, September 15, 2015

    There is one key difference between stud livestock and wool sales that will be difficult but not impossible to overcome for Auctionplus.

    In livestock sales, the auctioneer calls the bid. In wool, they are merely keeping up with the room. You will need to put mikes on the whole room to relay that back to online bidders as the buyers are calling the incremental bids, usually without whole numbers.

    Visiting a wool auction would tell you that this is not feasible as the current auction stands and sounds rather amateurish. I agree with the waffle statement above.

  2. Edward H Wymer., September 14, 2015

    Allan Udy, you say that Wool Online Ltd has been selling wool successfully? All that means is the wool has sold. At top prices, without a sample, who knows?
    Nearly half of the submissions to the Wool Selling Systems Review were from wool buyers. All wanted wool samples displayed, most very strongly, would you discard their opinions. woolman.biz

  3. Allan Udy, September 14, 2015

    Wool Online Ltd has been successfully selling wool (at top prices) to all New Zealand wool buyers and exporters, WITHOUT a sample since 2009. The fact that we use the Australasian EDI standards for wool industry data interchange also ensures that data is easily exchanged between growers, merchants, brokers, test houses and buyers. It’s not an impossible task to drag the wool industry into the 21st century, you’ve just got to know how to do it successfully. Check us out our sample video at http://www.youtube.com/watch?v=VRCi0lW-wGE

  4. Edward H Wymer., September 12, 2015

    It is a shame Terry Sim’s story quoting Ms Speer is far too long and full of waffle. Not one word on the wool sample. No genuine wool buyer is going to sit in an office or sale room, and buy wool at top prices without a sample. Wholesale change as proposed, is wrong and dangerous. Remember there have been approximately 80 major reports into wool marketing since the Philip Report in 1962, none have accomplish much, except feed the proponents. woolman.biz

  5. John Wyld, September 12, 2015

    CALM (AuctionsPlus) designed a wool selling programme in the 1990s – pre-Internet. It was a sophisticated system designed around buyer requirements, allowing them to bid for their orders by simply entering the quantity and detailed specs, with the software interrogating the catalogue and keeping the buyer updated during a simultaneous auction. The buyer could change his specs to suit the state of the market. John Walker was the designer, and the system was successfully demonstrated to industry. The sale could be run with or without samples. CALM had wide support for this vastly improved and efficient system, except where it mattered – the wool trade!
    It will be interesting to see how much has changed, if anything.

  6. Alix Turner, September 11, 2015

    With due and sincere respect to Anna, there can be a glass ceiling to the process of trying to make improvements “in bite sized chunks”.
    For instance, the AWEX experiment in computerising the sequential open cry auction process in the 1990s was declared a failure. However, does this mean that modern day computer technology cannot be harnessed to optimise the matching of wool supply with demand with a level of win/win efficiency that is simply outside the tunnel vision of the rank and file of today’s operators?
    If this is the case, and it is all but inevitable that it is, then perhaps the potential of the innovation may be completely overshadowed by the need for education.
    Whether we look at the industry’s previous failure to recognise and effectively capitalise on the concept of objective clip preparation, or on Dalgety’s regrettable termination of lateral thinking incorporated in the computerised sale-by-tender mechanism developed by Computer Sciences of Australia for EWP following the publication of the 1972 AOMP Report, we are reminded that the industry has an unfortunate record of failing to recognise and capitalise on all but the simplest variations in procedure.

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