Will Online Sales Last?

I have been getting bombarded all fall with emails for pasture bidoff sale and online sales.  Most of these coming in the form of e-blasts.  I got 2 emails from from farms I have never heard of for cattle that I don't want in just the time it took me to write my blog.  Enough is Enough!  I personally think people are going to get sick of having to bid on every animal they purchase, and those that are patient will see their business slowly come back from these weary customers that just want to do business the way they are used to.  You can find my whole opinion on my blog at www.zntcattle.com.

What is everyone's opinion on Steerplanet.  Will the online auctions and bidoff's continue, and where do you think we go from here?

IMO online auctions are a joke. Anybody that buys a calf from a video or pic is only foolin them selves. Been doing the bid off for a long time and its frustrating. Some of them you can't trust, and others play favorites and only call back when the price is way to high and there only one guy left, like i'll buy that. But the days of walkin a mans pasture and buying a calf outright are over. It seems that there less professional jocks and more wanna bee's. Hell its tough selling the few calves we raise without these guys filling buyers heads with all this political bull.

I prefer privately and then online next.  It sounds bad but I'd rather not let either the seller or any other buyers know that I'm bidding.  I've seen too many bids get run up on buyers that don't like to lose bids.  I'm not one of those people, but it has made me a little gun shy is a public setting. 

Online sales are where it's at.  I love looking at the pictures and the videos, but even I admit, I'd never buy one without seeing it in person.  Likewise, I'd say most other bidders have also seen the calves in person.  Like ZNT said, it's really dangerous buying a calf based on a video or, worse yet, just a picture.   

I also like being able to watch the bids (and their associated bidders).  There is still room for fabricated bids, but seems safer than telephone auctions. 

I just had to say something on this one.  The biggest thing is buying cattle from people you have a relationship with.  You can get ran on cattle in a live auction, private treaty bid off or espicially the internet.  You can even get squeezed purchasing cattle privately.  You need to know and trust the people you buy cattle from. 

Joshua

"Fabricated bids" to say the least!  If you know how these auctions work, the auctioneer and seller can see exactly who is bidding what throughout the whole process.  They are able to run you up probably even easier than in a public setting through the use of multiple bidder numbers.  They can control who gets what calves by running up a "bad" home or let them go to a "good" home.  Sales results can be inflated through under the table deals and calves can be held back if they don't bring the sellers reserve.  I enjoy looking at the photoshopped pictures just as much as the next guy and then wonder why they look so different in the videos (they never seem to be quite as deep, have as much bone, or are as pretty fronted as those photos!)  I have to see a calf in person and deal directly with the breeder/jock, but maybe I'm just old fashioned.  All this being said, yes it is another avenue to market your cattle to buyers who normally wouldn't see your stock.  In a business with limited customers (fewer everyday), getting your product as much exposure as possible is a must for many to make a profit.

I was speaking of an online auction format - not an online private treaty.  If the seller can organize a posse to bid up an animal in an online auction format while that animal is selling real time than more power to him.  I've purchased through the edjecast sales and it didn't seem like that would be as likely but hey what do I know. 
I could see where that would happen pretty easily through the private treaty online sales depending on how ethical the auction company was.  It certainly does validate the private dealings with the seller as being the ultimate way to purchase. 

I would love to be able to go to a farm and buy a calf I can see in person over any kind of bid-off but where we live thats hard to do. So I like the on-line sales with the videos. I do not like the telephone bid off sales at all and will never buy that way again.

forcheyhawk said:

I was speaking of an online auction format - not an online private treaty.  If the seller can organize a posse to bid up an animal in an online auction format while that animal is selling real time than more power to him.  I've purchased through the edjecast sales and it didn't seem like that would be as likely but hey what do I know. 
I could see where that would happen pretty easily through the private treaty online sales depending on how ethical the auction company was.  It certainly does validate the private dealings with the seller as being the ultimate way to purchase. 

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Forcheyhawk ~ I'm talking about a live auction online as well.  The administrator of the auction (auctioneer) is sitting at the kitchen table of the breeder/seller and they track every animal as it is being bid off.  The auctioneer has all the info on who is tied to every bidder, therefore so does the seller.  In this way the seller can run someone up as the live auction is taking place.  The auctioneer will assist because as the sale price goes up, so does his commission.  They have access to multiple "buyer" numbers so they can run up multiple lots without you, the honest bidder being able to identify this because you just think its another honest bidder.  They can use multiple numbers on the same lot so you think someone else dropped out of the race and someone new is now on the calf.  If I'm going to get run up, I'd rather be able to look across the auction block and be able to look the $#!&% in the eye!

I'm talking about a LIVE online auction that is also LIVE audience.  So, I still don't think we are talking about the same thing.  There's no seller sitting at the table with the auctioneer.  I've been both live and participated online.  Take for instance the Damar sale last weekend.  The live auction was almost too quick for the online part.  That's what I'm talking about.

showgoer said:

forcheyhawk said:

I was speaking of an online auction format - not an online private treaty.  If the seller can organize a posse to bid up an animal in an online auction format while that animal is selling real time than more power to him.  I've purchased through the edjecast sales and it didn't seem like that would be as likely but hey what do I know. 
I could see where that would happen pretty easily through the private treaty online sales depending on how ethical the auction company was.  It certainly does validate the private dealings with the seller as being the ultimate way to purchase. 

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Forcheyhawk ~ I'm talking about a live auction online as well.  The administrator of the auction (auctioneer) is sitting at the kitchen table of the breeder/seller and they track every animal as it is being bid off.  The auctioneer has all the info on who is tied to every bidder, therefore so does the seller.  In this way the seller can run someone up as the live auction is taking place.  The auctioneer will assist because as the sale price goes up, so does his commission.  They have access to multiple "buyer" numbers so they can run up multiple lots without you, the honest bidder being able to identify this because you just think its another honest bidder.  They can use multiple numbers on the same lot so you think someone else dropped out of the race and someone new is now on the calf.  If I'm going to get run up, I'd rather be able to look across the auction block and be able to look the $#!&% in the eye!

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Having been involved in a recent online sale, I can assure you that nobody is "running" anyone up, and the auctioneer is not at the kitchen table with ya!  The computer software is such that you can put in a max bid, but could buy that lot for much less then that.  Just like any sale, it takes 2 interested parties to determine the price.  Floor prices are determined by the sellers, and like anyone would expect, you aren't going to sell your calves for $700 when they are worth $800 at the sale barn.

We like the options that the online sale offered our group of consignors.  Our priorities were to get a bigger national audience, and limit our upfront expenses to conduct a sale.  Our online sale did both of that.  If anyone has ever had to put on a live sale with auctioneers, ringmen, food, etc...you certainly know it's not cheap!  For the lots that did not sell, we weren't out much, and the commission was acceptable for the lots that did.  We thought it was a success for our first time out, and have some ideas and plans to make our second sale more successful next year.

I don't dispute at all that the online sales are good for the sellers. The savings are unbeatable, and he exposure can't be beat, but if it is getting to the point that someone can't purchase a good one without having to bid against the world, are we creating a positive environment for the buyer, or encouraging potential newcomers to the cattle world to take the leap?  The best transactions are the ones where both the seller and the buyer are satisfied. Can this same loyalty which creates repeat buyers be achieved online?  Or will the buyer just move on to the next auction down the road the next year?

With the online sale i think it is to going to be to hard for you to get repeat buyers, because people are not getting off the sofa to come look at calves.  Its so much easier to just get on the computer look at 100 calves in an hour compaired to getting in the car and going out and driving to a couple farms.  we just recently had an online sale, reasons were we are just getting started and do not have a customer base so we thought this was the way to get ourselves noticed.  But the problem we found out of the calves that sold only one was actually baught by someone that came and looked.  I dont think we will ever do the online deal again but i think it is a good option.  I think that people are starting to get tired of having to compete for a calf and would much rather have a price and take the calf home, and personally i think thats how we need to do business from now on.  Our goal was to not only sell calves but to meet more cattle people make friends and connections, which is hard to do online.

I just watched some videos for an online sale and i don't know if they are selling show prospects or stocker calves?

if people with money buy online, then that means better calves are available for everyone else as they will pay more? and not have so much to buy more calves and sift?

doesn't bother me at least not yet.  it just means different calves go different places.  is the same money being spent?  it's a finite market.  it's not like arab oil is spoiling the whole thing.

Of the four options, the one I am least comfortable with is the standard auction. I prefer to think through my decision without the added pressure of perhaps hundreds of staring faces and a loud auctioneer with a time constraint.
I do hope, however, that the standard auction never goes away. They can be a lot of fun for me when I don't plan on buying anything.

knabe said:

if people with money buy online, then that means better calves are available for everyone else as they will pay more? and not have so much to buy more calves and sift?

doesn't bother me at least not yet.  it just means different calves go different places.   is the same money being spent?  it's a finite market.  it's not like arab oil is spoiling the whole thing.

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I work and travel. I make arrangements to view the calves and talk to the breeder. When I am on the road I don't have to continually make phone calls to enter a bid. I don't have to arrange time off work to make it to the sale I can just power up my laptop with wireless and bid where ever I am. Its not a "lazy" thing its a convieance thing for us. I feed the input to the operation $$$ so I have to work. I am lucky to have a family to provide the labor.
What I did notice this year- felt like there were some calves that went cheaper because it was an online auction. Lets face it, some calves do not photo graph and you can't appreciate them from video. I can't imagine buying one without taking the time to go see it. I have only done that once and built trust in the breeder. As the younger generation enters the market they do everything through text and email. The kids can be sitting in the same barn and will text one another. CRAZY. but thats the future.

Online sales are no different than traditional auctions in that they can be honest or frought with deception and dishonesty.  It all depends on the breeders involved in the sale.  That said, I have to agree with OH Breeder that they online format is more convenient and probably the way things will be done in the future.  I bought a bred heifer this summer though an online auction.  I made sure to see her in person and am happy with my purchase.  It was very nice to be bidding from my laptop in the comfort of my air conditioned home as opposed to a very hot outdoor auction.

I have had two online auctions of my own for embryos, pregnancies and flushes and have consigned to a few others. I know this is a little different than having live auctions for live animals but there are some similarities. As a seller, I have found them to have some excellent factors.

In both the auctions I ran, I completely set up the sale process. I was able to decide a base price under which I would rather not sell each lot. In my case I set this price at a very reasonable amount in order to try to entice bidding. I know some people start with their minimum selling price. I decided to start with a starting bid below where I hoped to end up. I have always thought that people will bid more often if they decide to start bidding.

In my online sales there is no one bidding up the buyer. The sales did have the option for a bidder to automotically put in their maximum bid so that they could come to the sale site when the sale started and place a maximum bid and not have to sit by their computer all day and watch. This is particularly good if a person is tied up in the few hours near the end of the sale and will not be near their computer. As a seller, I did not know who had placed maximum bids or what they were. I remember one particular lot where some bidders thought they were being run up as everytime they bid, there was an almost instantaneous bid higher. This happened because a bidder had put in a rather high maximum bid, and could not be around when the sale ended. He had posted a high bid as he really wanted these embryos. He purchased them for $1000 per embryo, and after the sale was done, he told me he had put a maximum bid of $1500 per embryo on them.

I still prefer live auctions the best, but I cannot attend even a fraction of the sales held these days. I think most people are far too busy these days, and it is difficult to find the time or the money sometimes to travel. As far as getting run on my bids, I have accepted the fact that it happens at live auctions and before I bid on any lot, I decide in my own mind how far I will go. If I am able to purchase the animal for less than I decided prior to the sale of this lot started, I accept it. If it sells for more, I also accept it and make another selection.

In regards to bidding on animals, I have worked many sales as a sales consultant and think I have seen most everything happen. A few years ago, I received a phone call from a breeder who was interested in buying a particular bull in a sale. He gave me a substantial bid, which I thought would certainly purchase this bull. In our conversation, he said to me, that I was to make sure that I did not buy the bull for much less than the bid that he had given me. I was a bit confused by what he meant so I asked him to explain himself better. He said, I was to make sure he did not buy the bull too cheap, as he did not think it would be good for his own bull sales, if people knew he was using cheaper priced bulls.He said that a breeder buying cheap herd sires was only a allowing people to expect some cheaper priced bulls in his own sales.  Since he had given me $10,000 on the bull and also gave me flexibility to go higher if I thought a few more bids would purchase him, I was very uneasy with this situation. I asked him again exactly what his wishes were. He said that under no circumstances was I supposed to purchase this bull for less than $6000. I told him, that he was going to have to set something up himself with another person, as I was not real comfortable with running his bid, even though I had his approval. I asked him to contact another sale rep and give him a bid at which he did not want to purchase the bull and I did not want to know what this price was. When the hammer fell, I did purchase this bull for this bidder, and he sold for $8750 and as it turned out, the runner up bidder was in the seats. This is one time, I actually had a bidder who wanted to be run up if it was necessary. I am telling this story, only to point out how differently people think about these things.

Private treaty is a most people's preferred method of buying I think but I also suspect we would all go out of business if we had to rely only on private treaty sales. Personally, I think online auctions will remain a part of this business. Like has been stated in a previous post, I think it is best to know who you are dealing with and if possible have seen the cattle or have another opinion on them. It just removed some of the doubts.