How online competition has cut cost of ag-chem buying

22 March 2002

How online competition has cut cost of ag-chem buying

By Andrew Swallow

WOULDNT you like to know you have bought your inputs at the best price your chosen suppliers can offer, without having to spend all day on the telephone beating them down to it?

Suffolk farmer Sam Fairs does, thanks to an ingenious internet tendering system that turns web trading on its head. Prices achieved are, on average, at least as competitive as buying group or trust deals, he believes.

Instead of suppliers posting chemical prices or availability on the web for all to see, Mr Fairs puts his input shopping list onto his own site (

Suppliers registered with his site then use their individual password and usernames to log on and post prices they think will win his business. By showing the best offer to date, without disclosing who made it, suppliers can gauge where to pitch their offer.

"Prices can be updated as often as they like," he says. And all Mr Fairs has to do is log in on the day he is buying, see who is cheapest and either e-mail or phone through the order.

However, as his list is posted at the start of the spring campaign and again for the autumn campaign, he often sends out an e-mail a week or two before making an order to remind suppliers to update their offers.

"Generally there is enough competition that I can be confident I am buying each chemical near the bottom of the market."

Fax quotes and phone calls may achieve the same result but the time commitment required by both farmer and distributor is considerable. With 1620ha (4000 acres) of arable crops to manage, that time is now put to better use, says Mr Fairs.

For suppliers, the site is a useful tool allowing them to gauge the market, he adds. However, only those he gives a password and username to so they may tender for his business, can take advantage of that.

So far he has only used the system for ag-chem purchasing, but the site is set up to take tenders for seeds, fertilisers, fuels and even machinery parts.

"I could ask for quotes on anything, even sausages. All I have to do is get the suppliers I might want to trade with set up with a password and username." &#42


&#8226 Farm-dedicated purchasing site.

&#8226 Select suppliers and register.

&#8226 On-line competition cuts prices.

&#8226 Grower selects and orders.

&#8226 Time and probable cost savings.

Grower offer

Having overcome some initial teething problems two years ago, Mr Fairs used for nearly all his ag-chem purchasing last year. Now, he feels confident enough to offer it to other growers. "I will go and see them if necessary, help them get the chemicals put on, and make sure their preferred distributors are set up with passwords and usernames." Cost will be about 35-50p/acre, he anticipates. "Thats about 1% of the chemical cost on a typical cereal farm."

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