Wool Online Ltd is a joint venture between Wool Connextions Ltd, a Canterbury-based wool broker, and Golden Micro Solutions Ltd, a Marlborough-based software development company.
Wool Online co-director Allan Udy says online wool trading has been dragging the chain over the past 10 years, but covid-19 has made people think outside the box.
Wool Online is the first online selling platform to gain a level of acceptance within the NZ wool industry. In the early 1990s, a software package for selling wool was developed by Cardinal Networks, but this quickly foundered after very little wool was 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 due to a lack of participation after having sold just 10,000 bales of wool.
In contrast, Wool Online has been enabling the sale of four or five times that volume, every year, having pushed through one million bales since 2010.
Covid-19 has almost doubled the Wool Online statistics.
“A number of brokers are talking to us now about the move to online instead of using the open-cry of the Napier and Christchurch wool auctions,” Udy said.
“On June 3 when we ran our weekly auction, which included some of the North Island brokers for the first time breaking with over 150 years of open-cry auction tradition, we sold 935 bales on that one auction and 700 bales on tender.
“In total from June 3 to October 22, Wool Online sold 23,104 bales on the auction and 13,000 bales on tender.”
With the North Island brokers on board, capacity and volume has almost doubled.
“From our perspective, we initially developed and have continued to enhance Wool Online so that it’s a tool that all sellers of wool in NZ can use to get in front of all the major NZ wool buyers,” he said.
“Online is the direction for the industry to move forward and we’re committed to continuing to develop the platform to make it work for the entire industry, including growers.
“Wool Online is a cost-effective trading platform for all parties and if our tools can help the industry on the return to all-round prosperity, even in a small way, we’ll be happy.”
For the past decade, Wool Online has listed wool sourced exclusively from merchants of the WoolFirst network, NZ’s federation of smaller, independent wool buying businesses dotted up and down the country.
Canterbury-based wool broker Wool Connextions Ltd aggregates the various lots from the participating merchants into a single sale catalogue and has been selling to the main NZ exporters on a weekly basis.
Over the past year, the Wool Online software has been upgraded to enable any wool broker to list and sell on the platform.
A new auction mechanism has been developed, which more closely mimics the way an open cry auction proceeds and this, along with other changes has made the system, is more effective for both buyers and sellers.
“The covid-19 crisis has made everyone realise that there can be situations when it’s simply not feasible or desirable for brokers and buyers to travel to Napier or Christchurch for the traditional open-cry auctions,” he said.
The Level 3 and 4 lockdowns helped focus the industry’s mind on the possibility of increasing the volume of wool traded online.
Wright Wool (Waipukurau), Kells Wool (Napier) and East Coast Wools (Gisborne) all listed catalogues of wool for sale post-covid and despite the depressed market, they were happy.
Group spokesperson Philippa Wright says it was great to finally make use of the platform.
“We’ve been watching Wool Online develop over the years and have always thought that there’s a need for the industry to move toward more efficient selling,” she said.
“That (June) sale demonstrated how simple and effective online sales could be, for everyone.
“I’m well aware of the difficulties that change brings, but it does prove that Wool Online is a suitable option that the industry can confidently get behind.”
Ryan Cosgrove, a buyer from NZ wool exporter John Marshall & Co, also supports the new online sale model.
“The additional ability of this new sale model to scale with extra volumes of wool means that it’s a logical progression to make use of the system on a regular basis,” he said.
“With the additional support of more brokers, merchants and buyers, this certainly has the potential to be a staple method of sale in the exchange of wool in NZ.”
Wool Online plans to further enhance the system as it works in conjunction with brokers and exporters to ensure it continues to provide a selling mechanism that works well for the entire industry.
