Group buys ?

farenheit · Jan 21, 2023

Clive said:
it gives smaller suppliers access to supply a large number of farmers

most FarmDeals suppliers are smaller companies so it seems to work for them, zi would say the sane id true for anyone buying group

not bigger than AF (yet). only 18 months old and about uk 3rd biggest by membership number i believe

But the thing with a buying group is that who that supplier is is usually decided by one person (or a team). They present the offer. And the buying groups' number one aim is price. Sure, you'll get feedback and there will be suppliers you won't continue to use, but smaller suppliers will find it harder to make their value proposition to customers if its not purely price because they don't get a chance to communicate that to the individual member. They just become a £ sign and nothing else.

Again, I completely see why buying groups work, but I don't think its worth pretending that it benefits anyone but those who are ready to scale or are already there. And to be honest, most of the buying groups are regional, and so often use local providers that the members are aware of, and who can fundamentally service a defined area. There are very few suppliers who can work nationwide without just using a courier service.

Clive · Jan 21, 2023

The only business FarmDeals threatens ultimately is the traditional buying groups with their high cost structures and therefore expensive membership fees and transaction commission

It aims to bring efficiency and convenience by using technology to do what those traditional groups have been doing for decades along with national scale to help smaller suppliers access markets previously only available to larger merchants, a more open and transparent marketplace that ultimately functions better for US farmers

Clive · Jan 21, 2023

farenheit said:
But the thing with a buying group is that who that supplier is is usually decided by one person (or a team). They present the offer. And the buying groups' number one aim is price. Sure, you'll get feedback and there will be suppliers you won't continue to use, but smaller suppliers will find it harder to make their value proposition to customers if its not purely price because they don't get a chance to communicate that to the individual member. They just become a £ sign and nothing else.

Again, I completely see why buying groups work, but I don't think its worth pretending that it benefits anyone but those who are ready to scale or are already there. And to be honest, most of the buying groups are regional, and so often use local providers that the members are aware of, and who can fundamentally service a defined area. There are very few suppliers who can work nationwide without just using a courier service.

all that you say has been well thought through before this was launched 18 months ago. The technology deals with pretty much all the points you raise

although national the deals you see are region dependent, there are dozens of small fuel suppliers for example but depending in where you farm you will see different suppliers and prices to me

so it’s nationwide in reach but local in offerings. it’s working well for the 2000 plus farmer members so far and the hundreds of (mostly small) suppliers it has onboard already

i think it has real solid potential to improve the the way we buy and is a great opportunity for many suppliers as well

ollie989898 · Jan 21, 2023

farenheit said:
I have to be honest, I'm trying to work out your mental gymnastics of how this is better for the smaller supplier Clive? It just seems to be counter to the very rules of capitalism - a buying group by its core is breaking a product or service down to price alone, the "customers" will have no idea about the level of service, delivery time, backup etc., just price. So of course smaller suppliers who specialise in these elements are going to lose out.

There are plenty of products that I will happily buy at the lowest price regardless of any other factor. But I wonder if you are going to be so choosy?

Any by the way, every buying group starts out by saying they aren't like the bloated bigger buying groups, but, guess what, they always become them, because you need to hire people to deal with everything once you start actually having customers. And also, Farmdeals needs to make a cut of course.

Are you bigger than AF already?

The truth of it is there is no fudging service, it's a supply only, no value added type deal.

BRB John · Jan 21, 2023

I don't see how farm deals can compete with local dealers. They can buy in bulk to keep the price as low as possible.

bobk · Jan 21, 2023

BRB John said:
I don't see how farm deals can compete with local dealers. They can buy in bulk to keep the price as low as possible.

They buy in bulk then charge as much as they can get away with more like

tullah · Jan 21, 2023

Basics like fuel, I always check farm deals against other quotes.

Cab-over Pete · Jan 21, 2023

Clive said:
We stopped using you as a contractor Pete simply because we got our own spreader and i have tractors and drivers to run it - that saved me money so was there right thing for us to do. As I’ve said before no reflection upon your excellent service just the right thing for my business

The story re Fibrophos supply is one of pure price fixing - when a agent from a different area quoted cheaper the manufacturer was told and that supplier was threatened to withdraw price / supply or loose their agency . That IS illegal prIce fixing that is not in farmers interest simple as that - it happens A LOT in Uk Ag and its about time that changed

do you have issues with traditional buying groups like AF, Orion, Fram etc ? FarmDeals is just a more efficient and bigger version of them

Thank you for your kind words again about my service. That is much appreciated.

I understand the need to use your equipment and men as efficiently as possible, but you still needed product to spread and you bought it from someone cheaper - a bigger supplier.

I put my price in and didn’t get the order. At no time was I told someone else had quoted lower and at no time was I told they had withdrawn their price. If what you’re saying is true and prices were fixed and you were obliged to use your existing supplier, I would have been told and you would have had no option but to buy it from me. That’s how price fixing works.

If that cheaper quote WAS withdrawn and you were told the price was the same as my quote, then you would surely have been a bit pi$$ed off about that , but I heard nothing until you said you were buying it elsewhere.

As I said, it’s no matter really, I nearly always sell out my allocation and usually have to try and scrape a few more loads together if I can. I’m not trying to rake over old embers, just making the point that the smaller supplier often loses out.

I must be mad hoping my lad wants to get involved in this business. If the type of deals you’re proposing become the norm we will soon have little to do and you will soon have nowhere to turn except massive companies supplying you with inputs.

Henarar · Jan 21, 2023

Cab-over Pete said:
I must be mad hoping my lad wants to get involved in this business. If the type of deals you’re proposing become the norm we will soon have little to do and you will soon have nowhere to turn except massive companies supplying you with inputs.

Not always big companies that can supply at the best price, with a big company often comes big overheads, I find myself dealing more and more with small firms that seem to be able to do just as good or better on the price and often better sevice.

neilo · Jan 21, 2023

tullah said:
Basics like fuel, I always check farm deals against other quotes.

I would do too, but no fuel deals are available in my area, again.

When there have been, local supplier or Certis have always been cheaper. The same applies for every buying group I’ve tried tbh, on pretty much every product and I’m certainly not a buyer of anything in big volumes.

BRB John · Jan 21, 2023

bobk said:
They buy in bulk then charge as much as they can get away with more like

I don't think they do not when it comes to plastic wrap or net. There just too much competition to inflate prices. I've been told their margin only lets them break even on them and it's more about keeping their customers from going anywhere else that they bother with it.
Don't get me wrong when it comes to pretty much everything else your going to get fleeced especially on items they have the monopoly on.

Grass And Grain · Jan 21, 2023

Cab-over Pete said:
Thank you for your kind words again about my service. That is much appreciated.

I understand the need to use your equipment and men as efficiently as possible, but you still needed product to spread and you bought it from someone cheaper - a bigger supplier.

I put my price in and didn’t get the order. At no time was I told someone else had quoted lower and at no time was I told they had withdrawn their price. If what you’re saying is true and prices were fixed and you were obliged to use your existing supplier, I would have been told and you would have had no option but to buy it from me. That’s how price fixing works.

If that cheaper quote WAS withdrawn and you were told the price was the same as my quote, then you would surely have been a bit pi$$ed off about that , but I heard nothing until you said you were buying it elsewhere.

As I said, it’s no matter really, I nearly always sell out my allocation and usually have to try and scrape a few more loads together if I can. I’m not trying to rake over old embers, just making the point that the smaller supplier often loses out.

I must be mad hoping my lad wants to get involved in this business. If the type of deals you’re proposing become the norm we will soon have little to do and you will soon have nowhere to turn except massive companies supplying you with inputs.

It's hard. Was chatting to a hedgecutting contractor today. Makes a good job, busts a gut to keep customers happy, was working super long hours all this weekend so he could run on the frost and minimise field damage.

He's got decent kit, but happy to run tractors to big hours and try to keep depreciation sensible.

All good so far, until he talks about being undercut on price by people who've got broken calculators, and he doesn't blame farmers for going with the cheapest deal because why wouldn't they? Especially as hedges are nothing but a cost to the farmers.

I'd always try to go with someone who provides a good service and I prefer small local companies. If it wasn't for them, and things get in hands of a few large suppliers then we're ultimately doomed, but in meantime those big suppliers might offer a cheaper price.

Other end of scale there's landscape gardener's turning up with an old van and a petrol hedge trimmer and charging £200 for a morning's work.

Forever Fendt · Jan 22, 2023

I can't understand how some company supplying say 300 pallets of wrap can get excited when it probably wants delivering to 200 locations

BRB John · Jan 22, 2023

Forever Fendt said:
I can't understand how some company supplying say 300 pallets of wrap can get excited when it probably wants delivering to 200 locations

Yeah and spread across the entire country...

thesilentone · Jan 22, 2023

Forever Fendt said:
I can't understand how some company supplying say 300 pallets of wrap can get excited when it probably wants delivering to 200 locations

Excellent point, the market is their already, spread around multiple suppliers via multiple distributors. The distributors buying much lower volumes should mean bigger margins for the suppliers, so why supply a buying group direct, or in some cases via a distributor at a lower margin ? What is in it for the suppliers ?

The answer is volume, as the supplier (manufacturer) works by the same rules we do, the more goods and materials they buy, the lower the cost, the greater the margin.

Delivery costs should be same, unless of course a central distribution point is agreed and everyone collects which will not work with all products, so delivery per item/tonne/pallet is all part of the cost and once again volume can be used as a buying advantage to drive down prices.

So, when buying via a group or as an individual all factors regarding cost have to be considered.

And of course, not every supplier will supply a buying group.

Clive · Jan 22, 2023

Forever Fendt said:
I can't understand how some company supplying say 300 pallets of wrap can get excited when it probably wants delivering to 200 locations

some farm input distributors are adding 30-40% to the price we are paying on farm

if a company can keep some of that themselves whilst still being able to offer us farmers a better price that increases their volume at expenses of their competitors then you can see why they maybe keen to supply a group buy directly

too many middlemen in uk ag and they are working on MUCH bigger margins than they would like you you think !

Clive · Jan 22, 2023

blue is gross ag output. - green (red at times) is the farmers share !

this is Canadian data but the uk numbers are similar (cant find the Ahdb graph !)

plenty of money in this industry ……… just a question of whose getting it all !

Sheepykid · Jan 22, 2023

Clive said:
some farm input distributors are adding 30-40% to the price we are paying on farm

if a company can keep some of that themselves whilst still being able to offer us farmers a better price that increases their volume at expenses of their competitors then you can see why !

too many middlemen in uk ag and they are working in MUCH bigger margins than they would like you yo think !

Is it just me or are you not trying to essentially be another middleman? I’ve not read the whole thread. So maybe you’re doing it for the greater good or a charity but failing that you’re doing it to try and make money for yourself.
Whilst making a good attempt at disguising it as a crusade to save uk farmers money from all the corrupt businesses we deal with that are also trying to make a living? I mean it’s fair enough as another option to source our inputs. But in reality it’s a business that you’re trying to make money from. Just the same as the ones your trying to persuade people not to use.

Clive · Jan 22, 2023

Sheepykid said:
Is it just me or are you not trying to essentially be another middleman? I’ve not read the whole thread. So maybe you’re doing it for the greater good or a charity but failing that you’re doing it to try and make money for yourself.
Whilst making a good attempt at disguising it as a crusade to save uk farmers money from all the corrupt businesses we deal with that are also trying to make a living? I mean it’s fair enough as another option to source our inputs. But in reality it’s a business that you’re trying to make money from. Just the same as the ones your trying to persuade people not to use.

the idea is to cut some of the middlemen, it’s free (unlike traditional buying groups) it takes (a very small) commission from the supplier if you do a deal (traditional buying groups do this in addition to your membership fee !) - if the price isn’t good there are no deals

buying groups have been around for decades but the are limited in scale and become inefficient / expensive as a result - the idea here is yo use tech to build unlimited scale with VERY low cost

it is a business ( someone has to invest so ultimately expects returns). but i’m not employed by it - i’m involved because i genuinely believe the UK ag supply chain needs a massive shake up and as a farmer i am sick to death of existing to make other people big profits and i think the scale of TFF membership is the only chance of that ever happening

Cab-over Pete · Jan 22, 2023

Sheepykid said:
Is it just me or are you not trying to essentially be another middleman? I’ve not read the whole thread. So maybe you’re doing it for the greater good or a charity but failing that you’re doing it to try and make money for yourself.
Whilst making a good attempt at disguising it as a crusade to save uk farmers money from all the corrupt businesses we deal with that are also trying to make a living? I mean it’s fair enough as another option to source our inputs. But in reality it’s a business that you’re trying to make money from. Just the same as the ones your trying to persuade people not to use.

At last @Sheepykid someone has said it!!! I’ve said it before and was thinking I would have to say it again to make Clive’s eyes roll.

Nobody would make that much effort for no gain. Even if the percentage is small, volumes will add up and money will be made.

And then I’m almost sure that a shrewd businessman like Clive has a grand plan. Even if there is no profit being made now or in the near future and the aim is just to get big volume of sales and help farmers in the short term, the big companies will notice and will want to get another thorn out of their side.

And the best way to do that is to buy them out.

Follow the money, good news or bad, follow the money.

Group buys ?

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100% I’ve had enough of farming!

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