New e-commerce giant
New e-commerce giant
plans big input savings
Globalfarmers.com is set to
drive down the cost of farm
inputs. It will have 100 staff
SAVING costs is a phrase farmers have been all too aware of in recent years as the slump in incomes across all sectors of agriculture has continued.
But although computer packages and the internet have been used by some, either to improve on-farm record-keeping or to market farm produce direct to the public, agriculture, so far, has not been top of the list when it comes to e-commerce.
That, however, is all set to change, says Jonathon Land, chief executive of globalfarmers.com.
Having secured £3.6m start-up funding earlier this year – Scotlands largest deal to date for establishing a new internet business – globalfarmers.com will "go live" within the next few weeks.
Based at the Royal Highland Showground at Ingliston, the firm already has 50 staff and plans to create another 50 jobs by the end of the year.
"Our simple aim is to deliver a trading platform that will drive out inefficiencies and cost from the agricultural industry in order to help sustain an industry in dire need of assistance," says Mr Land.
Foregone conclusion
His absolute determination to make the business succeed is apparent. And the enthusiasm of the farmers son from the Borders, who left a job with PricewaterhouseCoopers in the US late last year to return to Scotland to set up globalfarmers.com, seems infectious. The team he has built includes farmers, computer experts, sales professionals and others with a range of international business experience. None questions whether or not the venture will succeed – thats a foregone conclusion.
"For far too long farmers have been buying retail and selling wholesale," says Mr Land. "The farming crisis has meant that industry just cannot support the current inefficiencies in the supply and marketing sectors."
The trading platform that will be launched within weeks, which is entirely free of charge, will allow farmers to buy what they need for their businesses mainly direct from manufacturers. "The days of buying everything from sales reps who drive up the farm road are gone," Mr Land says. "That way of doing business is too expensive and farming cannot bear the costs anymore. We need to strip out costs, and buying direct from the manufacturer is certainly going to do that."
In the US, where some direct-buying sites are already available for farmers, savings on inputs of about 30% are being reported, he says.
There will be an option to buy anything, from machinery to sheep wormer, with various payment methods, including credit and debit cards, offered.
And while internet trading might mean goodbye to farm reps, and some merchants, Mr Land insists that farmers co-operatives can benefit from the e-commerce opportunities that globalfarmers will roll out as time goes on.
"At the moment, the co-ops are all competing against each other to sell, for example, their members grain. What the internet will allow is for each of them to submit details about how much they have on offer and when, then the large buyers can come to the site and bid for what they need to meet their orders."
Special deals
Globalfarmers will take commission, ranging from 0.5%-2.5% from the seller only. That, says Mr Land, is enough both to maintain the business and allow it to grow. Special deals on computers will be available for farmers, as will cost-savings on mobile phones that have internet access.
After the initial launch of the buying platform in the UK and Ireland, attention will turn to international opportunities. From there, offering farmers the chance to sell their output on-line will be the next major step. "Farmers have never been too good at co-operative marketing in this country. And if you just look at prime stock, 50% goes direct to abattoirs at the moment. Thats not a market. Animals are taken from the farm to the abattoir and then youre paid a price based on carcass classification.
"What we want to see is bidding on-line. Let the buyers have to compete with each other. There is no reason why farmers cant offer stock for sale, with a description of the animals and even pictures, on the internet," he says.
The failure of electronic livestock auctions in the past does not deter Mr Land. "That was too fragmented and it was also the wrong time – everyone was still making money when it was tried before so people didnt really need to use it. There was no scope for using pictures either," he points out.
Aberdeenshire farmer Harry Emslie has been involved with globalfarmers from the outset. His livestock expertise is complemented by the knowledge and industry contacts provided by other leading farmers, such as Barclay Forest, Marie Skinner and Richard Price.
"Id never used a computer or the internet before I spoke to Jonathon," says Mr Emslie. "Then I went home, tried it, and realised just what an opportunity it offered."
And he refuses to believe that farmers will be slow to adopt e-commerce. "If its going to save you money, youll use it," he says. "I used to have nine sales reps coming to see me every week. That took up a lot of time, and just think of the cost. I want to buy what I need, when I need it, and with unbiased choice."
Jonathon Land plans to have 100 staff by the end of the year.
Harry Emslie expects take-up of the internet-based service to be swift.