AgriWorld seeks to change the buy-sell equation
AgriWorld seeks to change the buy-sell equation
It is a tall order, but the principals at AgriWorld Exchange believe their on- line trading platform will change the way the fresh fruit and vegetable industry does business.
They know this has been tried before -- and has failed fairly magnificently. But they say that times have changed and so has the industry.
In the mid-1990s, a host of dot-com entrepreneurs decided that the produce industry needed to modernize its trading practices. A number of outsiders were able to lure some insiders into their vision with promises of stock options, and soon industry conventions and meetings were littered with future dot-com millionaires touting their various on-line produce-trading platforms.
What Amazon.com was able to do with books, Buyproduce.com and Produce_online.com were going to do with broccoli, apples, pears and lettuce. Millions of investment dollars later, most of these companies are just a memory.
The buyers and sellers in the industry proved that they were not yet ready to give up the phone and the personal connection on which the fresh fruit and vegetable industry was founded.
However, the effort to move the industry on-line was not altogether unsuccessful. The auction concept didn't materialize, but buyers and sellers who were already doing business did start using the Internet to consummate transactions. Electronic data interchange has become commonplace, and more buyers and sellers are finalizing their transactions via the Internet each day.
It is exactly for this reason that E. Arlin Torbett, founder, chairman and chief executive officer of AgriWorld, based in Menlo Park, CA, believes the industry is ready to take the next step and actually negotiate via the Internet for the buying and selling of fresh fruits and vegetables. "There were [various] reasons that those other companies failed," he said. "They had a poor business plan, the technology wasn't where it is at today and the industry wasn't ready for it."
A decade later, he said the technology has improved tremendously, and virtually everyone in the industry is now computer- and Internet-savvy. To launch a successful on-line trading platform, he said that it is not necessary to spend millions of dollars to build a brand-new system from the ground up as was necessary a decade ago. Creating a system to enable buyers and sellers to interact is fairly easy and has been done for many different applications.
"This works because we have created a platform that emulates the way people already do business," said the company's founder, who has a background in Internet business development. "We have created a global community that allows buyers and sellers to communicate with each other and negotiate just as they do today over the phone."
Mr. Torbett believes that one of the major downfalls of the earlier on-line trading platforms was that, in essence, they created an auction-type system. A seller was expected to put his products for sale on-line and the product would be bought by the highest bidder. "That is not the way fresh fruits and vegetables are bought and sold. It is a negotiation process, and that's what we offer," he said.
In layman's terms, AgriWorld Exchange is much like MySpace or Facebook, in that it enables a buyer or seller to create his or her own community on-line. Once the community is created - which is what AgriWorld does - the buyers and sellers can communicate with everyone in their community or specific people within that group. They can negotiate the sale of a particular product with one customer or they can put an offer to sell on their page for everyone to see.
As AgriWorld signs up buyers and sellers, those specific buyers and sellers invite their customers and/or suppliers to join their community. For example, a retailer theoretically would invite all its suppliers to join its community and then would do all its business on-line with those various suppliers. A supplier, in turn, would invite all its customers to join its community and could then communicate with each of them individually or in groups.
Mr. Torbett said that users of the system currently are paying a $200 monthly charge, which entitles them to 300 transactions. Additional transactions will be billed at 67 cents each. Research showed the AgriWorld executive that the average buyer or seller, using the system continuously, would conduct about 300 transactions per month, hence the standard $200 charge.
"This will fundamentally change the way produce is bought and sold," he said. "When we present this to growers and shippers and they find out that they can do each transaction for only 67 cents, they say that is amazing."
AgriWorld, which has only been up and running for about six months, has successfully signed up a number of shippers who like the concept. The Internet company touts its relationship with Mission Produce Inc. in Oxnard, CA, and Pioneer Growers Cooperative in Belle Glade, FL.
Ross Wileman, vice president of sales and marketing for Mission, agrees that it is an attractive idea, but he admits that he does not know if the industry is ready to accept this system. "I'm not sold on it yet, but I think it is worth a try," he told The Produce News.
He said that the $200 per month that it is costing Mission to give the idea a try is well worth the money. "We spend that on dinner [with one customer]," he quipped.
Mr. Wileman said that if such a system was adopted by many of his customers, it would be very easy, less costly and less time-consuming to send out information each day letting his community of buyers know what Mission has to offer that day, and then making the sale.
Mission has broadcast some information about its product to its community, but Mr. Wileman said that he does not believe the company has consummated a transaction through the system as of yet.
The Mission executive fully expects that if this system is adopted industrywide, it will be an evolutionary process and will take some time. But he reiterated that the investment required by his firm is very small to give this idea an opportunity to work, even if it takes a couple of years.
J.D. Poole, vice president and sales manager of Pioneer Growers, said that his company views this as "another avenue to use to sell our produce." He said in mid-April that the firm had sent out an invitation to its buyers to join its AgriWorld community, "but we haven't talked to them yet and so I do not know if anyone has joined."
He added that he does not expect Internet transactions to replace the current way of doing business, but it seems like a very good idea and the company wants to explore the opportunity.
Vince Ferrante, director of business development for AgriWorld, has spent more than 20 years on sales desks in the produce business, most recently handling international sales for Fresh Kist in Salinas, CA. He believes that companies can reap huge savings by transitioning to an Internet-based sales system. "I've talked to a large tomato grower in Japan who has 26 salespeople. He said he can reduce that by 50 percent if he gets all of his customers on this system."
Mr. Ferrante understands that the industry is skeptical that this will work, but he said that he has no difficulty making believers out of anyone who takes a look at it. He said that it is very simple to use and enables a buyer and seller to negotiate in a very efficient and time-saving manner without much of an investment.
Mr. Torbett believes the low cost of the system is a major selling point. Unlike the earlier on-line trading efforts, neither the buyer nor the seller has to invest in costly software or hardware to use the AgriWorld system.
They know this has been tried before -- and has failed fairly magnificently. But they say that times have changed and so has the industry.
In the mid-1990s, a host of dot-com entrepreneurs decided that the produce industry needed to modernize its trading practices. A number of outsiders were able to lure some insiders into their vision with promises of stock options, and soon industry conventions and meetings were littered with future dot-com millionaires touting their various on-line produce-trading platforms.
What Amazon.com was able to do with books, Buyproduce.com and Produce_online.com were going to do with broccoli, apples, pears and lettuce. Millions of investment dollars later, most of these companies are just a memory.
The buyers and sellers in the industry proved that they were not yet ready to give up the phone and the personal connection on which the fresh fruit and vegetable industry was founded.
However, the effort to move the industry on-line was not altogether unsuccessful. The auction concept didn't materialize, but buyers and sellers who were already doing business did start using the Internet to consummate transactions. Electronic data interchange has become commonplace, and more buyers and sellers are finalizing their transactions via the Internet each day.
It is exactly for this reason that E. Arlin Torbett, founder, chairman and chief executive officer of AgriWorld, based in Menlo Park, CA, believes the industry is ready to take the next step and actually negotiate via the Internet for the buying and selling of fresh fruits and vegetables. "There were [various] reasons that those other companies failed," he said. "They had a poor business plan, the technology wasn't where it is at today and the industry wasn't ready for it."
A decade later, he said the technology has improved tremendously, and virtually everyone in the industry is now computer- and Internet-savvy. To launch a successful on-line trading platform, he said that it is not necessary to spend millions of dollars to build a brand-new system from the ground up as was necessary a decade ago. Creating a system to enable buyers and sellers to interact is fairly easy and has been done for many different applications.
"This works because we have created a platform that emulates the way people already do business," said the company's founder, who has a background in Internet business development. "We have created a global community that allows buyers and sellers to communicate with each other and negotiate just as they do today over the phone."
Mr. Torbett believes that one of the major downfalls of the earlier on-line trading platforms was that, in essence, they created an auction-type system. A seller was expected to put his products for sale on-line and the product would be bought by the highest bidder. "That is not the way fresh fruits and vegetables are bought and sold. It is a negotiation process, and that's what we offer," he said.
In layman's terms, AgriWorld Exchange is much like MySpace or Facebook, in that it enables a buyer or seller to create his or her own community on-line. Once the community is created - which is what AgriWorld does - the buyers and sellers can communicate with everyone in their community or specific people within that group. They can negotiate the sale of a particular product with one customer or they can put an offer to sell on their page for everyone to see.
As AgriWorld signs up buyers and sellers, those specific buyers and sellers invite their customers and/or suppliers to join their community. For example, a retailer theoretically would invite all its suppliers to join its community and then would do all its business on-line with those various suppliers. A supplier, in turn, would invite all its customers to join its community and could then communicate with each of them individually or in groups.
Mr. Torbett said that users of the system currently are paying a $200 monthly charge, which entitles them to 300 transactions. Additional transactions will be billed at 67 cents each. Research showed the AgriWorld executive that the average buyer or seller, using the system continuously, would conduct about 300 transactions per month, hence the standard $200 charge.
"This will fundamentally change the way produce is bought and sold," he said. "When we present this to growers and shippers and they find out that they can do each transaction for only 67 cents, they say that is amazing."
AgriWorld, which has only been up and running for about six months, has successfully signed up a number of shippers who like the concept. The Internet company touts its relationship with Mission Produce Inc. in Oxnard, CA, and Pioneer Growers Cooperative in Belle Glade, FL.
Ross Wileman, vice president of sales and marketing for Mission, agrees that it is an attractive idea, but he admits that he does not know if the industry is ready to accept this system. "I'm not sold on it yet, but I think it is worth a try," he told The Produce News.
He said that the $200 per month that it is costing Mission to give the idea a try is well worth the money. "We spend that on dinner [with one customer]," he quipped.
Mr. Wileman said that if such a system was adopted by many of his customers, it would be very easy, less costly and less time-consuming to send out information each day letting his community of buyers know what Mission has to offer that day, and then making the sale.
Mission has broadcast some information about its product to its community, but Mr. Wileman said that he does not believe the company has consummated a transaction through the system as of yet.
The Mission executive fully expects that if this system is adopted industrywide, it will be an evolutionary process and will take some time. But he reiterated that the investment required by his firm is very small to give this idea an opportunity to work, even if it takes a couple of years.
J.D. Poole, vice president and sales manager of Pioneer Growers, said that his company views this as "another avenue to use to sell our produce." He said in mid-April that the firm had sent out an invitation to its buyers to join its AgriWorld community, "but we haven't talked to them yet and so I do not know if anyone has joined."
He added that he does not expect Internet transactions to replace the current way of doing business, but it seems like a very good idea and the company wants to explore the opportunity.
Vince Ferrante, director of business development for AgriWorld, has spent more than 20 years on sales desks in the produce business, most recently handling international sales for Fresh Kist in Salinas, CA. He believes that companies can reap huge savings by transitioning to an Internet-based sales system. "I've talked to a large tomato grower in Japan who has 26 salespeople. He said he can reduce that by 50 percent if he gets all of his customers on this system."
Mr. Ferrante understands that the industry is skeptical that this will work, but he said that he has no difficulty making believers out of anyone who takes a look at it. He said that it is very simple to use and enables a buyer and seller to negotiate in a very efficient and time-saving manner without much of an investment.
Mr. Torbett believes the low cost of the system is a major selling point. Unlike the earlier on-line trading efforts, neither the buyer nor the seller has to invest in costly software or hardware to use the AgriWorld system.
