Wool online: Sales technology for the wool industry that works

After two other unsuccessful attempts to sell wool online this new company has been successfully trialing this method of selling in the last 18 months and now has gone public.

With many more positive vibes flowing from this industry and this venture trialed extensively, this selling avenue has a good chance of success.

At this stage we are unaware of what sort of cost savings farmers will achieve, and at present the system is restricted to NZ registered wool exporting companies.

Updated: Wool Equities the partner in Woolonline estimate costs will be reduced to $30/Bale from the $40-$80 /Bale on the present auction system.

Wool Online Limited has recently announced the full release of its internet-based wool trading system which has been successfully operating in live test-mode for the past 18 months.Wool Online is a business-to-business sales system designed to facilitate the sale of greasy, slipe and processed wool to the NZ wool export sector. Wool is made available for sale by members of the WoolFirst (merchant) network, and wool exporters or processors then use the online facility at woolonline.co.nz to find and purchase the Lots of wool they require, when they require them, without being restricted to buying only at the traditional once-a-week 'open cry' auctions in Napier or Christchurch. Wool Online Co-Director Janet Udy said "We've tried to keep the system under the radar since we started operating in early 2009 to give ourselves plenty of time to test all the functions of the software and the web site, and to ensure it was going to be a success for the NZ wool industry, rather than become yet another embarrassing technological failure."

Wool Online is the third attempt at modernising the sale of greasy wool in NZ. In the early 1990's a software package was developed by Cardinal Network but this quickly founded after very few bales of wool were sold through the system. Likewise by 2003 the NZ Wool Board's 'Woolnet' e-marketplace, the first internet based wool selling system in the world, was closed down due to a lack of participation after having sold somewhere around 10,000 bales of wool.  In contrast over the past 18 months over 85,000 bales of wool have been successfully traded on Wool Online, with all major NZ exporters using the system on a regular basis.

Co-Director Greg Tibbs says "Several exporters have told us that the volume of wool we have available on Wool Online is now sufficiently large enough that they can't afford to ignore it. They're also telling us that from their perspective the system works well and it's helping to drive some efficiencies as well as providing wool on a more frequent basis."

In the past one of the main reasons for the failure of business-to-business electronic marketplaces in the primary sector has been the 'lemon effect' where buyers have been unable to adequately assess the quality of the product that has been made available for sale. Mr Tibbs notes that Wool Online has solved this problem because all wool listed on the site is independently typed and valued by his company Wool Connextions Ltd, which has a reputation amongst the export sector for consistent reliability.

Wool Online Ltd is a joint venture between Wool Connextions Ltd and Golden Micro Solutions Ltd, a Marlborough-based software development company. Golden Micro prinicpal and Wool Online Co-Director Janet Udy says "the advanced 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 both wool merchants and brokers around NZ, and it provided a solid foundation on which to build the Wool Online system. It gave us a huge head start in bringing a modern, effective and useable system to the industry".

The Wool Online auction/tender system also has the full support of the NZ-wide WoolFirst network of merchants. Using Wool Online, merchants are able to offer their clip to the export sector in a timely and cost efficient manner. Additionally growers can be assured of receiving the best price on the day, without the added expenses associated with traditional physical on-site auction selling. The use of the Wool Online system is currently restricted to NZ registered wool exporting companies who buy wool in the NZ market.

Wool Equities Limited has today announced a new formal alliance with two other partners in the wool industry which is designed to modernise the manner in which both processed and unprocessed wool is sold in NZ. Wool Equities has partnered with Wool Connextions Limited and Wool Online Limited to support a new sales system that completely bypasses the antiquated open cry auctions, and which uses 21st Century technology to improve wool logistics efficiencies and improve wool returns to growers.

Wool Equities Limited role in the new alliance is to encourage the rapid acceleration of the uptake in use of this revolutionary e-Commerce auction/tender system. Wool Equities’ 7,800 wool grower shareholders will all be encouraged to participate by selling their wool clip through the new system.Wool growers have told us the costs  they have to pay to sell their wool through the open cry auction system vary considerably from $40/bale to $80/bale.
In comparison, when growers request that their local WoolFirst merchant to sell their wool clip through the Wool Online auction system, costs will be around $30/bale. Projected savings to New Zealand wool growers based on typical auction selling costs on latest auction volumes of 550,000 bales will be a minimum of $16.5 million. And all of these savings are made without increasing the purchase price of wool, and without the requirement for growers to be locked into a pre-determined sales contract.