New products and services continue to evolve
If you want to grasp the rapid evolution of e-commerce, there's no better place to start than e-commerce.com. When Rusty Harder and Dave Krog founded it in 1996, their mission was simple: Bring people together on the Internet to create opportunity and increase efficiency.
They accomplished that mission immediately when they introduced a contracting service in 1997.
"At that time, elevators and other grain buyers were struggling to establish contracts for high-oil corn and soybeans with specific traits," Harder says. "It was tough for them because there was a lot of competition and they had to move very quickly. So we set up an online 'meeting place' where farmers and contractors could get together. The first three days we offered the service, we contracted more acres than our customers had put together in the previous 12 months."
In 1998 the company added seed ordering capabilities and inventory management services to those same customers, quickly followed by "input bundling," where a producer ordering Liberty Link seed, for example, would receive the herbicide with it.
In 1999 the company offered a system where elevators could bid directly to producers for their grain, and the year 2000 brought more services. In March they introduced Decision Rule contracts that allow elevators to offer risk management tools to their customers, and in May they began offering a cash grain exchange.
"The grain exchange will allow buyers and sellers to incorporate quality attributes into price discovery," Krog says. "The key is to connect the producers with the ultimate end users. That's what e-commerce does so efficiently."
At Farmbid.com, CEO Ted Farnsworth says another type of change is on the way - and fast. In just a few months, he watched international traffic at his site explode. Ten percent of the transactions at the company now occur between American farmers and international buyers.
"We are getting flooded with e-mail from overseas and they are looking for just about everything," Farnsworth says. "The global market is going to be huge. And for American farmers it will create a liquid market they never had before."
To facilitate that growth, though, Farnsworth says the transportation industry will have to quickly solve some logistical problems.
"The bottleneck right now is the ability to immediately ship anything to anyone anywhere, and it's not easy," he says. "It's much simpler to ship a case of vaccine than to ship a few tons of fertilizer, for example."
Mark Porter, sales manager at NetSeeds.com, sees change of another sort having an impact on E-commerce. Extremely rapid growth, coupled with financial issues, he says, could bring down some Internet companies.
"Annual growth rates for us have hit 400-500%," Porter says. "I wonder how many companies can handle that. Also, some of these companies are going to run out of money, especially the ones that don't have a lot of product to sell. That's why we're so excited. We are self-financed, we're profitable and we reinvest everything."
Handling growth is nothing new for Joe Dales, senior vice president of marketing for Farms.com. Already, Farms.com has over 100 employees and expects to double within the next year. The explosive growth, he says, is due to the beauty of price discovery in an open forum and the fact that the Internet creates marketing opportunities.
"What we'll see next are more opportunities to add value throughout the whole food system," Dales says. "If someone wants a specialty product it can be tracked through data bases. Biotech innovations can be tracked as well. The ability to add value with Internet commerce is immense."