Marketing Pulses Digitallly - PulsePoint
September 21, 2017
Online grain marketing businesses take the guesswork out of marketing your crop
by Megan Madden
The internet has not just changed the way you read your news, talk to peers, or laugh at cats.
It has also changed the way you can market your pulses and other grains. Competitive options, speed, convenience, and transparency are all reasons that online shopping has taken over our retail market, and grain marketing is no different — it is not just about price.
Enter online grain marketing businesses like FarmLead and Ag Exchange Group.
“What intrigued me was being able to list commodities in a place that is public, to be seen by buyers we might not already have personal contact with,” says Outlook area farmer Clint Ringdahl, a happy Ag Exchange Group customer. “We sold feed durum to a buyer we knew but did not know dealt with
feed. They found our listing on Ag Exchange Group, so we connected. Being able to buy and sell specific to quality and quantity is a great benefit. We do not just have to sell on price and location.”
That is exactly what the founders of Ag Exchange and FarmLead had in mind when they developed their digital marketplaces.
Mike Witkowicz, Vice President of Strategy and Business Development at Ag Exchange Group says the business was founded on the idea of connecting farmers to grain buyers in a more efficient way. The business started when single desk marketing was eliminated.
“The Canadian Wheat Board knew the quality and quantity of grain across Western Canada, and when it left, this created an information gap, and the grain companies had to improvise,” says Witkowicz. “Merchants needed a way to source x amount quality and quantity, and representatives had to call
individual farmers to build the sale — we have eliminated the phone tag element of marketing.”
Similarly, farmers find the benefit in taking negotiations online as opposed to having to call multiple buyers. “I posted my lentils, durum, and mustard on FarmLead because it was easy and convenient,” says Craig Onerheim from Frontier, SK. “Buyers are available 24/7 and I have increased my marketing reach and power, and I am earning more doing Free On Board deals so I am not having to truck all the time. Customer support is awesome — their guys know the ag industry.”
FarmLead is a digital marketplace that allows buyers and sellers to list, negotiate, and finalize grain deals. Available online and as a mobile app, FarmLead increases market reach, provides 24/7 access, and reduces brokerage fees.
“Instead of dealing with a couple of people whom you know personally, use the internet to showcase your grain to as many potential buyers as possible,” says Brennan Turner, FarmLead Founder, President, and CEO. “More eyes on deals leads to better deals. You are either going to find a better deal
than locally, or confirm that your local deal is the best.”
While Ag Exchange Group and FarmLead offer similar services, their businesses are structured differently, so farmers have several options that suit their farms and their marketing preferences.
Ag Exchange Group has no transaction fees but is subscription based, offering a six-month complimentary trial before charging based on the service level growers choose. Options include $500 to receive bids, $1,000 to receive bids and interact with asks, and $1,500 featuring both bids and asks, with the add-on of grain inventory management.
Conversely, FarmLead has no subscription but charges a fee upon the successful closing of a deal. The buyer and seller pay the same fee upon closing a deal successfully which equates to one dollar per tonne on the first 80 tonnes, and $0.25 for every tonne over this amount. “We sell sellers to buyers and buyers to sellers,” says Turner.
The anonymity and relationship levels also differ between the two companies. Ag Exchange Group is transparent wherein sellers and buyers can share contact information right away, putting a name to the listing and adding the element of personal relationship into the deal. “We are the Match.com of grain,” jokes Witkowicz. “This allows the same relationship level of an offline transaction with the convenience of doing it from your phone.”
If anonymity is preferred, FarmLead does not allow buyers or sellers to see who they are dealing with until the deal is confirmed. Turner explains that this allows both sides to focus on the terms of the deal: quality, quantity, and location, without making the relationship (good, bad, or otherwise) a factor.
Where both of these companies align is on ease of use, usable mobile technology, and online security for their customers. “Our offers are always safe and real,” assures Witkowicz. “Ag Exchange Group uses a secure password, and PIN technology and the technology makes accepting or bidding simple, and once a bid is accepted it is a binding contract.”
FarmLead also conducts credit analysis of its buyers every three months and is always transparent about whether the buyers are bonded. “Farmers always know they are getting a safe, secure, real deal when they sell with us,” says Turner. “With over 2.3 million tonnes successfully negotiated on
FarmLead now, and over $500 million paid to farmers, we think both buyer and seller alike have a good experience.”