13 minute read
Three is NOT a crowd
James Richardson, CEO of the young auction company ThoroughBid, sees online selling as an integral part of the bloodstock sales arena, and is looking forward to the organisation’s inaugural Online Yearling Sale
COVID wrought many life changes – people had to find new ways of working, doing business, interacting, communicating and keeping themselves amused. Some of those aspects of pandemic life have since become entrenched into our daily lives –working from home and zoom meetings have become the new normal, however, on the flip side, some of those enthusiastically embraced new hobbies and in-house exercise regimes were soon abandoned.
In the bloodstock industry a new digital business sprung up through the adversity of the global pandemic; it has since taken roots and is now another legitimate option for the buying and selling of racehorses.
ThoroughBid was founded by Ross Alberto and Will Kinsey, who took the idea of online bidding from the back of an envelope to reality. The pair was joined by now CEO James Richardson, and the team took the company from concept to market place at appropriately viral speed.
Two years down the line the founders and the management team have greater goals than just providing an online bidding platform developed through adversity, and are keen to “create” rather than disrupt.
They also certainly believe they provide the market place with a legitimate third auction house option.
“We feel that an independent auction house and a new addition to the market has a benefit and a place, we feel that we can do a job,” says CEO James Richardson.
The company was set up in July 2020 and in September celebrated the second anniversary of its debut sale, but the business goals are more altruistic than merely taking advantage of a global catastrophe.
“It was more borne out of the frustration felt by the founders and myself that sometimes at physical sales the buying experience for participants is not always great,” rues Richardson. “Owners could head to a sale on a wet day with a short list of five horses, and find that three have not turned up and one looks lame.
“We really felt there could be a better buying experience for both purchasers and for vendors.”
Selling online obviously means that the horse does not leave the trainer’s yard or stud farm until sold and cash has exchanged hands, and in this busy world of wall-to-wall racing and busy daily lives, Richardson reports this has massive cash and logistical benefits for those selling horses.
“It is incredibly time consuming to sell at market and online offers both cost suppressions for the vendor and helps with staffing, it is very important today to transact without disrupting the entire yard.
“For trainers selling during the main Flat or NH season to have staff come to the sales when there might also be staff away from the yard at the races, well it is not viable.”
Obviously as has been seen in the market place professional consignors are being used more and more for the sales process by trainers, so taking away that logistical issue of getting horses to sales, but Richardson counters that even the large scale professional sales consignors have successfully made use of the online platform for transactions.
And, as Richardson says, horses are certainly selling and making their money on the platform.
“Particularly with the horses in training it has been proven around the world that it is a perfectly legitimate way to sell; not many can say that they did not make the money they felt they should have by selling online,” he says, adding: “Anecdotally we have horses who have made way more than anticipated.
“Horses have sold around the world now online for seven-figure sums,” he adds referencing the dispersal of the Valachi Downs broodmare band on the New Zealand Bloodstock-owned Gavelhouse platform, which saw Baggy Green (Galileo) bought by the Written Tycoon Syndicate for NZ$1.75 million.
The ThoroughBid team is keen to provide the market with the advantages of liquidity and speed that the private sales arena enjoys, yet with the safe financial embrace that can be given by selling within the auction house environment.
“Transacting online brings all the benefits of a private sale yet with the guarantee and warranty of an auction process,” says Richardson.
Selling horses privately can be fraught with problems, and this is where the advantages selling through ThoroughBid can be seen.
“People might think they have a brilliant private sale sorted out, but it can fall through very easily and the consignor can then be left with an asset that is difficult to sell – other people suddenly think there is something wrong with the horse, not just that the buyer found another option or just walked away.
“We have really tried to set up to protect both sides of the deal, and both sides have the security that the horse is safe in its stable at home and is only going to leave that stable when it is paid for.
“We are trying to really concentrate on compressing a massively long process into as short a time as possible without cutting corners.
“The buyer still has five days to review the animal subject to getting it out of the property in the allowed time; we think we are giving everyone a fair crack of the whip.”
That liquidity the online market can offer is key, he enthuses.
“You can sell a horse at a time of your choosing whether that is to make maximum benefit of its race performance or record, or, alternatively, to mitigate losses.
“We automatically pay out after seven days and, for vendors to be paid just a week after selling, is a big plus.”
Providing a third wing to the thoroughbred auction industry, a business historically made up of a strong duopoly, he also feels is good for a competitive market place.
“The feedback we have had from the market is that competition is important –in the UK and Ireland there are only two providers and I think at times that does lend itself be the most competitive.”
Richardson, however, admits ThoroughBid is not going to rework an industry that has 200 years of history and that the people actually like going out for a day at the sales, the venues also providing a sociable and networking day out, a place to do equine business and an amphitheater in which people want to buy horses.
However, Richardson believes that the online world of transactions of racehorses can offer a more secure environment
“The nature of online transaction removes the need for credit, which as we have seen over the past year has not been the most appropriate way for the industry to conduct itself.
“Online sales, as they happen so much more frequently, means buyers are not needing credit because, when they want to buy there is a horse to buy and they don’t have to buy all of the stock at various times of the year on spec because there are no other opportunities.”
He also believes online transactions help to stop buyers getting carried away with purchasing as can happen in the pressurised cauldron of the sale ring.
“I don’t think there is the danger of purchasers suffering from the same degree of buyer’s remorse,” he says. “They are not going to a physical sale with various parties anticipating a purchase and feeling that pressing need to ‘buy’ a horse, being in danger of buying and coming home with a horse perhaps they should not have bought.
“Buying at home or in office – it is a far more calculated purchase.”
Although Richardson and the team respect the age-old history of the auction world, they are keen to try and re-imagine how things are done, and see if they can’t be done at least a little bit better.
He is particularly keen to help make the bloodstock industry and the buying and selling of horses more user-friendly to the new entrant.
Richardson recalled a pre-launch conversation that firmed in his mind the need for a user-friendly online portal.
“Before we even launched ThoroughBid I was sat around a table with ten very successful City business people and to a person they said that they would love to have a horse but would not know where to start,” he reports, adding: “I’d challenge any person randomly picked off the street to come to a sale ground and just locate a specific horse.
“For instance, if we told them to go and find Lot 32, they wouldn’t be able to walk straight to Lot 32, instead they would walk around the sale ground for a good length of time before finding the horse, and they would be armed only with a black and white pedigree in a catalogue.
“From that little information they are expected to suddenly judge whether or not that is the horse for them.”
ThoroughBid’s mantra is to provide a wiki-type platform where all the information pertaining to a horse is clearly available on one page or within one mouse click.
Richardson says: “We have created a portal that is a one-stop shop. We have all the race form and race replays in one place, detailed veterinary certificates… we are empowering the person who is writing the cheque to make some sort of observations themselves.
“The pedigrees are colour-coded so that the less educated in the horse world can actually see straight away and understand the relative value and measure of the pedigree just by the fact that it has got lots of colour on it
“Of course, we are not looking to remove the need for industry professionals at all, but the more we empower and better educate potential owner is has got to be good for the market.
“If a new entrant into the industry or the overseas client can get a greater understanding as to what is happening, it has to be good. If we are able to attract a new audience because the online mechanism is easier then that has to be of benefit for everyone.”
Richardson likens the process to the developments in the online car sales industry in which people can buy a car online without even a viewing, the car will be delivered and warranted and all the requirements taken of by the sales team.
He is also hoping that online transactions can do something to fix racing’s major issue relating to the retention of owners.
“Liquidity in the market has got to help with owner retention – if a horse is not satisfying the goals without the opportunity of an online sale there might not be a chance to sell for a length of time and the costs of selling are going to be quite significant … it is not surprising that owner does not reinvest or not to the level that we’d like them too.”
The world of online buying is here to stay – all of the major auction houses conduct their own online sales, and there are a number of bespoke companies in existence around the world.
The worth of a sale and a sales house is always judged by the ongoing performance of its graduates, and already ThoroughBid has sold Cheltenham and Punchestown Festival winners and this summer a US jumps Grade 1 victor – Belfast Banter, who was sold at the November 2021 Sale bought by Danny Mullins for £130,000.
With these results under its belt, a new sale planned this autumn and broader aims for the industry’s benefit, ThoroughBid certainly believes that there is a long term viability for three auction houses in Britain and Ireland.
Online yearlings
WITH ThoroughBid successfully gaining BHA accreditation horses sold on the platform are now eligible for auction races, and this brings in the online platform into a new world of yearling sales.
As we know there are many “in-horse” yearling sales, but Richardson believes that there is still a niche to sell yearlings online.
“The biggest market is the yearling market and I think that, despite the vast number of physical sales, there still is a stock of horse that is not getting into the right sales for various reasons,” he outlines, adding: “The consignors are getting bigger and bigger and there is potentially the argument that they are shunting down and shutting out the smaller producers – it is just how things are going. I certainly think we can provide options.”
As regards viewing horses and the feeling that yearlings need to be seen to believed he counters: “It was proved through Covid that online yearling sales worked well, I think if you have the right photos and videos with the horse’s profile it goes a long way.
“And, of course, people can still go and see the stock, we are just giving another option for buyers and sellers.”
Yearlings bought in the company’s November Sale have the opportunity to win their connections a £5,000 bonus, if successful first time out.
“With the prize-money situation as it is I think it is nice to be rewarding success for all rather than just the ‘elite’,” says Richardson. “There are not many sales bonuses available for horses outside for the top five per cent or so and, while some of the auction races might be for stock slightly lower down the tree, those horses are one of the many just trying to get into a race let alone trying to win it.”
“Of course, it is still not easy to win first time out, but we’d like to reward owners and like to be seen to be helping the industry.”
He concludes: “We are trying to be a force for change and a force for good. We are not evangelical preachers about this, but we were set up with the mind set of trying, if we can, to make things a little bit better.“
