Navigating ONLINE SALES

for The Stockman by B. Lynn Gordon

The use of online technology to sell purebred cattle has exploded in the past five-to-10 years, and there appears to be no end in sight to the continued growth in this marketplace. The ease of being able to bid, view, and buy cattle online is overtaking the time it takes to attend a sale in person, not to mention the travel time and expense and the challenge of being away from your ranch is a convenience many producers can take advantage of.

The Stockman visited with three leading online auction companies and their owners/representatives to get the pulse of how the adoption of online technology continues to infuse into the marketing of purebred cattle and genetics, Christy Collins, Fredrick, OK, CCI.live; Cody Lowderman, Macomb, IL, Lowderman Auction Options,; and Dustin Layton, Edmond, OK, SmartAuctions. This update focuses on the merchandising of show heifers and breeding females, which comprises the bulk of Fall online sales.

CCI.LIVE-- Collins reports the advancement of technology in the last five years have improved to the level that ‘buying online’ in any marketplace has now become a way of life, even in the livestock industry on our hand-held devices. The implementation and growth in support of government initiatives to improve internet services via fiber optics in rural areas has created a positive mark in the ability to sell livestock online from rural and remote areas where livestock breeders are often located.”

Lowderman Auction Options-- Lowderman sees the comfort level rising from both the buyer and the seller. “The lower costs generally associated with hosting an online sale versus a traditional live auction, combined with the ability to host a variety of genetic or live animal sales at different times throughout the year, plus convenience are all a driving force in their popularity,” he says. One trend this Illinois-based company has witnessed is the sale of top-tier genetics being sold via online auctions. “We continue to see the gap get larger between dollars paid for the ‘top-tier’ cattle, meaning those who excel in performance, or EPDs or have showring potential.”

SmartAuctions-- “Online auctions have become a perfect fit for producers who do not have enough product to sell to justify a conventional auction and all the costs associated,” reports Layton. Selling bulls, females or frozen genetics online has opened the door for producers to sell their genetics at different times throughout the year, creating cash flow outside the timeframe of their conventional auction “There are enough advancements in the technology and the process, that I believe we are at the point where the majority of buyers and sellers are contented conducting business online.”

CCI.LIVE-- Collins initially envisioned online bidding to be a vehicle to handle the cattle industry’s growing buyer base. She admits she was hesitant in the beginning, due to the value she placed on the personal acquaintance established from traditional face-to-face selling. Over the years, she learned a great deal from countless phone calls, listening to people and hearing what they were looking for in cattle, their program goals, and along the way, she met many great people. But, as time progressed and the buyer base grew exponentially, Collins, could see the struggle that developed trying to accommodate so many buyers via phones during an auction. Now, she tells breeders/sellers to use the online marketplace, first, as a tool that can make bidding on your product simple and convenient for buyers, and second, as a marketing tool.

Lowderman Auction Options-- Building relationships with the people you do business with is critical. When discussions begin with a potential seller, Lowderman, gathers information from the seller such as, what kind of customer base do they want to target, what breeds will they be selling, what best describes their offering, e.g. show versus performance-oriented cattle, etc. He encourages sellers to do their homework. “Don’t be afraid to ask for references from the online company. Reach out to friends or peers who have had online sales and ask questions about the sale company and format. Make a list of the pros and cons you hear.” Then, he suggests, take that information to make your own decision. What works for one breeder might not fit everyone. The company must have your best interest in mind. Plus, he emphasizes, don’t overlook professional photos or videos, they are imperative in marketing online, and they must reflect a true version of the animal you are selling.

SmartAuctions--Layton reminds breeders that preparing for an online sale is no different than a conventional auction. A marketing plan needs to be put in motion, the approach on selling commercial bulls and show heifers for example is drastically different. It is important to have all cattle registered before the bidding starts. Whether selling bulls or females it is a wise investment to have the cattle parent-verified. By doing this it instills even more confidence in the buyer and prevents mishaps. In addition, the cattle need to be prepped as far as condition, clipped, and high-quality pictures and videos are of utmost importance. “There is a reason some people take pictures and videos for a living and sellers need to understand it is a wise investment if they plan to have an online sale, and even more important if it’s an online-only sale. Lastly, when selecting an online platform, Layton reinforces the seller needs to go with the with the company or representative they feel most comfortable with or have a current working relationship with. “I feel the seller needs to understand the technology and outreach of the platform they are going to use.”

CCI.LIVE-- From her many years’ experience in the industry and marketing cattle, Collins has witnessed that people with good livestock and sound principles have the most success with any type or kind of auction, no matter what platform they use. “You have to trust the seller, the online company, and the breeder you are buying from first and foremost,” reaffirms Collins.

Lowderman Auction Options-- It all comes down to doing your homework notes Lowderman. Sellers should understand buyers will gravitate towards people they trust and are comfortable with. He encourages potential buyers if they are unable to view the cattle themselves, that they reach out to someone in the industry they trust and respect or visit with someone familiar with the seller’s breeding program. Visiting directly with the seller is another good step. “All too often I see people who buy cattle without looking at them or having someone else view them or fail to contact a sales representative or owner.”

SmartAuctions-- “We work diligently to acquire top-notch producers that not only have good cattle but have good character. We are no different than the buyer, we are selective in who we team up with,” says Layton. But he reassures buyers those who are not honest and focused on a positive outcome for the buyer, have sorted themselves out over time. “The majority of livestock producers are very genuine, hard-working people that have high-standards. It is our role as an online sale provider to stay connected with the producers/sellers understanding their programs which allows us to receive calls directly from buyers so we can be a resource to answer questions.”

CCI.LIVE-- “In March our office was chaos. It mostly stemmed from the unknown and people just wanting to discuss options.” Many dates were moved, some sales canceled, and some new ones added. Those who have been hesitant to add online marketing into their auction format, have now gained that extra nudge to consider the technology after seeing the restrictions put in place due to COVID-19. Collins reports the demand for seedstock has stayed strong through the pandemic, which has been positive for the livestock industry, especially the sellers.

Lowderman Auction Options-- Lowderman witnessed several breeders cancel their live production sales and shift to online-only or a blended format due to the restrictions. With a great deal of uncertainty as Fall approaches, he believes online sales will continue to be viable and popular options to merchandise seedstock. “Change is inevitable, and COVID-19 has made the industry adjust and change a bit more than we might like, but, the agriculture industry is no stranger to adversity, and those involved in the cattle business are known for being some of the most down-to-earth, resilient, common sense-driven people.”

SmartAuctions-- “Several conventional auctions contacted us to transfer over to an online platform, because they needed to generate cash flow, and in some cases, it was the only way they could effectively sell their livestock, due to travel restrictions and crowd limitations,” says Layton. Other sellers have downsized the number of lots offered and some Fall scheduled live sales are booking online now due to uncertainty. With many unanswered questions on restrictions, travel options, and people’s level of comfort traveling, Layton is confident the future will see more sales conducted via online-only. This he believes is not all due to COVID-19, but also due to costs associated with conventional annual sales.”

Jake Weber, a third-generation stockman from Southwestern Minnesota, has walked in the footsteps as a buyer and seller, utilizing technology to participate in online auctions.

“We switched from telephone bid-off to an online sale about eight years ago to gain more exposure for our breeding program and to speed up the process of selling,” says Weber. The traditional phone-bid-off system could often drag out up to week long and with an online sale, in one evening the sale is wrapped up. Through the online auction, Weber and his family expanded their marketing outreach. “It’s amazing the number of people you can reach. We have sold cattle on both coasts and to many repeat buyers.” However, fear of losing that personal connection with buyers is the only hesitation Weber has with online auctions, therefore, he takes extra steps to keep that communication flowing and is aware superior customer service is one way of doing so.

“As a seller, you have to sell animals you stand behind.” Weber wants buyers to be repeat customers, and when they purchase something that meets or exceeds their expectations, then he knows even if they purchased online, sight-unseen, he has represented his cattle with authenticity. One way to do that is with photos, videos, and information that is accurate and a true representation of the animal.

Weber sells females in a September and November online auction, selling about 25 heifers in each sale, representing his Angus and Simmental genetics. His focus is to offer females that will make mother cows but understands that at least 50% of his buyers are also looking for heifers to start in the showring. Many of his customers are families trying to find show animals for their children, and the real-time, online auction system allows families to be able to manage their purchase process better than the phone-bidding system he used to use. “They know where they are at with online sales, they don’t have to worry if they are the going to bid on several animals, in multiple bid-off sales, over multiple days.”

Weber has also bought many cattle online. He is comfortable with most of the platforms used in the industry and in an ideal world they would all be the same, but he finds most of them quite user-friendly. He particularly likes the ones where he knows without a doubt if he has the leading bid.

As a buyer, he researches the animals, the breeding operation, and the online system before he purchases an animal. He tries to view the cattle he is looking to purchase ahead of the online sale, visiting the ranch or asking a sale representative or a fellow stockman he trusts. Likewise, he encourages buyers of his sale offerings to view the cattle before his sale or at least reach out with a phone call to ask questions. “I don’t want cattle buying or selling online to become like Amazon. It’s still a people business and we don’t want to lose that.”

Looking ahead, Weber advises sellers to utilize every platform they can to promote their online sales and the company you hired to host the sale. “With so many online sales now, you have to find ways to separate yourself.” The dollars shift from the sale day expense to added marketing and promotion, but overall, he sees online sales as more economical way to manage the unpredictable factors like weather and COVID-19.