Internet-Based Wholesale Flower Trading
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| Internet-based wholesale flower trading system developed by NKK for Ota Floriculture Auction |
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NKK has developed and recently put into operation an Internet-based wholesale flower trading system for Ota Floriculture Auction Co., Ltd., Japan's largest flower wholesaler based in the Central Wholesale Market of Tokyo.
The new system makes it possible for the whole-saler to do business with middlemen online in a virtual marketplace, and also allows middlemen to engage in e-commerce with retailers. The system was developed to respond to the recently amended Wholesale Market Law intended to liberalize wholesale trading and increase distribution efficiency. The system employs a business model peculiar to transactions in perishable goods wholesale markets. NKK and Ota Floriculture Auction have jointly applied for a patent for this business model.
Ota Floriculture Auction serves as a large-scale collection and distribution market delivering flowers, grown in various parts of Japan, throughout the country. Before the flower auction starts at 7:30 in the morning, Ota Floriculture Auction conducts pre-opening sales with middlemen. In the past, these transactions were carried out by telephone or fax, but thanks to the Internet-based trading system that recently became operational, these transactions can take place more freely.
Currently, Ota Floriculture Auction engages in direct transactions with 16 middlemen. They do business in a virtual marketplace that operates over a LAN inside the auction hall. On the basis of data about shipments from each production region, Ota Floriculture Auction displays product data and carries out transactions with middlemen over the network. The company offers auction prices, which are based on the previous day's auction prices and also take into account factors affecting supply and demand.
Transactions between middlemen and retailers are also integrated into the system. Retailers use the Internet to access middlemen's websites, where they can freely order the products they want on screen. Because middlemen can conduct transactions with Ota Floriculture Auction and with retailers at the same time, inventory risk can be reduced.
Pre-opening transactions require large volumes of flowers to be sold within a short time late at night. For this purpose, Ota Floriculture Auction set up an automatic distribution center, which was also developed by NKK, last December. Cases of products with bar codes affixed are loaded onto a conveyor, which sorts and carries them at high speed to the respective middlemen. The distribution center has boosted the company's nighttime sales capacity by about 50%.
This business model, which creates a system linking transactions between wholesalers and middlemen, and between middlemen and retailers, is expected to increase the efficiency of all transactions involving agricultural and marine perishable goods.
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| Automatic distribution center recently put into operation |
