At Veiling Holambra, they don’t even want to think of the cost-causer, cost-payer principle. It’s considered the beginning of the end. “It’s precisely the broad assortment, that makes the auction so appealing”, explained chairman Joost van Oene.
Director André van Kruijssen took me on a tour of Veiling Holambra today. I learned about many of the ins and outs of this important marketplace. I spoke with the marketing manager, sales manager and four of the board members. Great conversations, which all helped me get a better understanding of the auction.
Van Kruijssen told me that Veiling Holambra does look at other auctions. To learn from. He also knows that other auctions can learn from Holambra in the same way. They could look for example, at Holambra’s tracking and tracing system for their logistic processes. Trolleys, trolley shelves, containers, container trays and reusable trays are all equipped with chips. Apparently, it was quite an investment. I’ll be finding out more about this later on in the week.
One of the questions I asked the board members, regarded the auction’s main discussion points. The first thing that came to chairman Joost van Oene’s mind was fees. That’s something people complain about sometimes. And yes: they closely followed the recent changes that were made to Royal FloraHolland’s fee system. But Veiling Holambra – i.e. their members – have no intention of introducing the cost-causer, cost-payer principle.
“With the cost-causer, cost-payer principle, small suppliers leave within ten years, and you’re left with large suppliers only. Phalaenopsis and rose will remain, but the variety of the current supply will disappear”, is how the chairman put it. “And it’s precisely the broad assortment, that makes the auction so appealing.”
Another principle that the auction wants to hold on to, is that the fees for sales through the clock, mediation and web shop are the same. If you lower the fees for mediation services for example, you undermine the clock. Growers will then start selling more through mediation.
That’s something the Holambra members want to avoid. “The clock is the most interesting commercial instrument, it’s the only instrument that can indicate today’s price. Everybody is guided by the clock”, according to Van Oene. “We all started out as small growers. So why force small growers to expand?” Van Kruijssen added that making the clock more expensive, is a sign that you’d like to get rid of it.
What if a large supplier threatens to walk off, because he feels the fees for mediation services are too high? “They’re free to go. Our vision is to always try and get the best results for everyone”, said Van Oene. Let’s not forget that the ‘Brazilians’ are very aware of the fact that they are able to hold on to their principles because there aren’t any large traders with the same level of power as some of the suppliers in the Netherlands.
Anyway, Veiling Holambra definitely doesn’t want to get rid of the clock. What’s interesting is that the percentage of clock sales isn’t that high, compared with FloraHolland. A third of the trade is sold through the clock.
Is the auction old-fashioned? That’s not the impression I’m getting. In addition to the tracking and tracing of trolleys and containers, they’re progressive in many other ways. They meet with retailers to negotiate deals and think of all sorts of concepts to stimulate flower sales on the shop floor. And they offer auction presale and multi-transaction auctioning. At the moment, they’re working hard on the development of their digital platform.
No, I definitely wouldn’t call them old-fashioned. They just like holding on to their principles.