KEY POINTS:
Rural services business PGG Wrightson says its national network will give it an advantage as it enters the fray of online livestock auctions.
The NZX-listed company yesterday started its Agonline site initially aimed at dairy farmers, with trading of herds, replacement heifers and calves.
Sheep, beef, deer and other commercial stock will be added later in the year.
Group general manager customer services Mike Skilling said the company expected a payback on its investment within a year to 18 months.
"The prime driver is really to retain and grow market share ... but we'll only do that by having something farmers want," Skilling said.
"We are using this expertise of our nationwide force of 300 stock reps right up and down country and we think that will really differentiate this from any other site."
PGG Wrightson said it handled more than 83,000 animals in dairy forward contracts a year, while data showed about 80 per cent of dairy farmers regularly used the internet.
"Internet banking didn't take branches away and this won't take great numbers of stockyards away or reps or anything like that," Skilling said.
"We just see it as really convenient and just integrating the best of both worlds really."
Paul Edwards, PGG Wrightson livestock dairy manager South Island, said the company did not view other livestock websites as direct competitors.
"We see our major point of difference is that one, we've got an online auction, a full e-commerce site, plus we've got a nationwide field force to back up what we are selling and verify those listings," Edwards said.
"Agonline will turn what might be regarded as local markets into a national market and this will be especially the case for quality-type livestock."
Online livestock trade was very low in New Zealand, while in Australia 20 per cent of all livestock was sold online through the AuctionsPlus website, the company said.
"It's another tool for vendors and purchasers to use and I think it will take time to develop up to 20 per cent but that certainly would be a goal over time," Edwards said.
The new system would also reduce costs, he added.
"We believe advertising costs will be a little bit lower and it'll cut out unnecessary transportation of livestock but we believe this will be more prevalent in phase two when it goes into sheep and beef."
PGG Wrightson shares closed down 1c yesterday at 1.27c.
