A good example is a friend who sold 14 young heifers recently. They decided that this year they would keep with tradition and use their local agent, selling through a local auction. That’s fine and they made a good return. At the time about $1350 for their heifers.
In discussion I asked what did it cost to sell those cattle. Pulling out their sale records they added up the cost of transport to the sale years; the yard fees per head; the scanning fee charged at the yard; the national transaction levy and finally their agents commission. When they totalled the sum it came to $1375. So effectively the gave one of their 14 animals away in costs!
Now there is no escaping costs of sale. Commission is something agents charge to market the stock; arrange delivery; organise scanning; administer the movement and transaction levy. They also have to cover their costs in time t loo and try and sell the cattle for the best price. There is also the insurance they have to make sure you get paid for your cattle!
But, not all commissions are the same! So my first comment to all of my producers is to ask what do you receive for the commission that you pay?
Ideally your agent should be working to market your cattle to the best possible return. So that could be using their network to sell your cattle privately to someone seeking a particular article. It could be they will sell through auction on line or in the physical market. However, there’s more to just putting cattle into a sale or “on the box.”
In the case of AuctionsPlus, there can be thousands of cattle listed for sale. That does mean that your cattle are exposed to a much wider group of buyers than the local Saleyards. However, how will your agent make your cattle stand out? You should ask what their marketing plan is? What will they be doing to get your lots in front of the buyers?
