Bringing the age-old experience of selling a horse through a sales ring into the digital age has presented its fair share of challenges, but the growth of these platforms, in particular the quality of stock they are offering, is an example of the resonance they are having in the marketplace.
The early stages of the online bloodstock sales experience were very much akin to that of the classified, with horses at the lower end of the market posted for sale at a set price.
However, in the past three years, as two of the biggest bloodstock companies in this region, Inglis and New Zealand Bloodstock sensed an opportunity to offer an online auction experience, the nature of what is on offer has changed significantly.
Nick Melmeth is the Business Manager of Inglis Digital and oversees their monthly auctions as well as the day-to-day operation of Bloodstock.com.au, Inglis' ongoing trading platform.
For Inglis, the monthly auctions have assumed the space which used to be occupied by the mixed sales dotted throughout the calendar. The growth in the popularity of those online auctions, which are usually scheduled to run towards the end of each month, has been a tremendous success story.
"A lot of this was driven by (Inglis Managing Director) Mark Webster. Having bought Bloodstock.com.au, a classified thoroughbred site back in 2011, it got to the position where it was clear there were external competitors looking at this space and we felt there was an opportunity there," he told TDN AusNZ.
Inglis purchased bloodstock.com.au in 2011
"When the Newmarket complex was closed, we didn’t have a ring to sell in, so we decided to give it a try back in May 2017."
"It was pretty humble, we had good numbers, but due to the fact it was our first ever and it was free entry, it hit about 30 per cent clearance rate and turnover was $285,000 in total, so it was pretty modest."
Fast forward two years and the auctions are delivering turnover about $1 million a month, with a peak of $1.75 million in January.
The NZ solution
New Zealand Bloodstock had already begun offering regular online auctions through the gavelhouse.com platform some 12 months earlier.
gavelhouse.com General Manager Haylie Martin explains that the New Zealand market needs trading to ensure there is fluidity.
The previous classified approach didn’t provide the dynamic environment to ensure that the market could keep moving, but a simulation of the auction environment in the online context allowed for this to happen.
"It gave putting a horse up for sale a bit more urgency and finality rather than just being put on a site where it could potentially sit there forever," she said.
"That sense of urgency and giving people a chance to trade in and out of horses a lot more quickly was the way it needed to go." - gavelhouse.com General Manager, Haylie Martin
"The market in New Zealand has been contracted for some time, although we are seeing some recent changes that are giving everyone hope. That sense of urgency and giving people a chance to trade in and out of horses a lot more quickly was the way it needed to go."
Waikato Stud recently sold their weanling draft through gavelhouse.com
"We launched as an auction site in April 2016 and are already in the fourth winter with some really obvious cyclical patterns now evident in supply and demand."
The advantages from a vendors' point of view is obviously cost. In an online environment, there is no transportation or staffing costs. Lowering the barrier of entry to an auction sale has led to a lot more horses being offered for sale.
Bringing new product to the market
As Martin points out, one of the interesting impacts in New Zealand has been the access to horses that may have never made it through a Karaka sales ring.
"There are a lot more horses in remote areas around the country that we have had the opportunity to sell that might not have ever justified being put on a truck and taken to Karaka, while it’s also proven a great tool to expose quality fillies off the track to a big market and get a good result quickly," she said.
"There are a lot more horses in remote areas around the country that we have had the opportunity to sell that might not have ever justified being put on a truck and taken to Karaka." - Haylie Martin
"Why not have a crack and chuck it on gavelhouse.com is something we often hear. We are finding those horses who may have just sat in the paddocks of farmers who may have had two or three broodmares on dairy, sheep or beef farms, and may have just stayed were they were, are more likely to be offered for sale."
Removing the wait
One of the great advantages to the auction format that Melmeth sees is the immediacy of it. The dynamic nature of the online environment means it can be far more responsive to the marketplace than the traditional sales calendar.
The online environment can be far more responsive to the marketplace than the traditional sales calendar
"If you've got a partnership that needs to be dissolved or a horse that just needs to be moved on, there is no time period to wait," he said.
"The alternative is that you wait, which costs you more agistment, and then take it to a sale, where you have to have transport to get it to a sale, then pay staff and entry and commissions. Ours is a lower price point, in that the entry fee and commission are lower than most sales would be."
"The convenience is there. We open on a Friday and close on the last Wednesday of the month. Horses might still race on the Saturday or Wednesday for their old owners and be sold by Wednesday night."
"Ours is a lower price point, in that the entry fee and commission are lower than most sales would be." - Nick Melmeth
"People don’t have to take their horse out of work from stables or anything, and if it doesn’t sell, they haven't suffered the inconvenience, and that cost has been kept to a minimum."
Both Inglis Digital and gavelhouse.com have the advantage of being attached to brands with strong reputations. That allows them to lean on Inglis or NZB for auxiliary, admin or marketing functions.
Melmeth feels that also gives the buying bench confidence that they are no worse off than if they had gone to a sales complex and put their hand up for a bid.
"I suppose it’s built its own growth in that regard. It’s seen as a genuine platform for selling thoroughbreds, rather than what it used to be considered as, where online selling was at the lower end."
Continuing to increase the quality
He sees the key to Inglis Digital's continued growth to be in the quality of what is on offer. Lots have sold up to $210,000 earlier in the year. The June Online Auction, which closed on Wednesday where Arrowfield Stud offered a blueblood Snitzel filly from the family of Shantha's Choice (Canny Lad), Set Goals. She sold for a record $321,000 to Cannon Hayes Stud,
Set Goals, from the family of Shantha's Choice
"She was the perfect product offering to see if we can generate that interest and we can go back to the market and say 'See what we can do, you can support us with that type of horse'," he said.
"We are only playing with a certain size pie, so relying on growth of numbers won’t sustain our growth. But if you grow the quality of it and the focus of it, that’s where you can see things continue to develop."
Getting the vendors involved
The big vendors are certainly seeing the advantages, and recently Arrowfield sold its entire 2019 weanling draft of 24 through Inglis Digital's Scone Online Thoroughbred Sale.
Waikato Stud did the same thing through gavelhouse.com earlier this month, offering its 26-strong draft with an average of just over $9000 and a top price of $47,500.
"When you have innovative farms like Waikato Stud, who do such a good job of presenting their horses online, offering a whole draft, people really stop and take notice. It was not just a success from the sale side of things, they were also getting people onto the farm for parades while offering the chance to see the stallions, entertain them and generally showcasing why they’re so good at what they do," Martin said.
"A few of the other farms have seen that exercise as a really good way of getting in front of clients." - Haylie Martin
"A few of the other farms have seen that exercise as a really good way of getting in front of clients, especially with the timing going into the breeding season and it’s potentially something we may see more of down the track."
Melmeth agrees these types of specialised sales are an opportunity moving forward.
Both Inglis Digital and gavelhouse.com are very much focussed on continually improving their platform to make them as easy as possible for their users, while providing additional information. The opportunities for vendors to add additional information, such as x-rays, photos and videos are increasing with every iteration.
All of this is done with the end user in mind, keeping the technology simple and straightforward for any potential buyer.
"That's been one of the biggest challenges is educating that generation and being patient and holding their hands," Martin said. "It can be daunting. But we’ve got a 98-year-old in Sydney who buys horses off the site and doesn't have problems. He's the poster child for a lot of the people who tell us they find it too hard!"
The future
Both are also committed to continuing to innovate in the future, but in different ways, reflective of their respective markets.
Inglis' immediate focus is continuing to expand the quality of the auction catalogues while ensuring it is reaching as broad an audience as possible.
"You think about the old traditional Mixed Sale, it would be capped by the amount of people who could physically get to the sale. What the online auction is providing us with is a much broader bench of buyer. We have people enquiring from Hong Kong and Singapore. Perth has been a big supporter, those people wouldn’t have been at a mixed sale and that's what can generate better results," Melmeth said.
"What the online auction is providing us with is a much broader bench of buyer." - Nick Melmeth
International expansion is also on the cards at gavelhouse.com, although more so in how it leverages the platform. Already moving into offering a standardbred product itself, it also plans to offer a 'white label' solution to other jurisdictions to utilise.
"The beauty of it is, because we have created it ourselves and it is specialised and bespoke, we can offer it as a white-label type product to other parties and we are working with a couple of other countries at the moment who are looking to do that," she said.
"We can manage the system in almost a licensing type of agreement. That's probably where we foresee the most development."
