Automated trading offers a “huge advantage” to Liv-ex members, according to a research project carried out by Geisenheim University graduate Katharina Hahn, who previously spent six months as a data intern with Liv-ex in London.
This is because merchants who use the technology can increase their stock offering without tying up additional capital, “and thus gain new clients without putting more work in beyond the initial set-up”.
One merchant interviewed by Hahn saw a 70% increase in new customer acquisition after implementing automated trading. This is because it allowed them to grow their stock offering, which was advertised on their website and on search engine websites.
Unlike some competitor websites, their stock was confirmed available, making it more attractive to buyers. Put simply, more stock led to more new customers.
She concludes that it is possible to, “clearly demonstrate that automated trading attracts new customers.”
Offering wine on Liv-ex automatically
Merchants can also offer their stock on Liv-ex automatically, reaching a global audience.
Hahn discusses the impact on one merchant: “For this merchant, automated trading brings only benefits. It removes the double selling problem … is faster, and attracts more potential clients due to the luxury of offering wines on two platforms [simultaneously].”
This merchant’s sales on Liv-ex tripled within a year, and eventually accounted for 30% of his business’s profits, according to Hahn.
One reason for the success of automated trading is that it is not restricted to the working day.
Hahn comments, “When looking at human trading, purchasing wine is dependent on office hours. Automated trading takes place all day and all week long, no matter if it is 3am on Wednesday or 11pm on Sunday.”
This is because all systems – your stock system, website, and Liv-ex
– stay in sync automatically. The merchants interviewed in Hahn were able to take advantage of sales opportunities even when they were away from the office.
Find out more about wine business automation
This recent report explores the wine trade processes that can now be streamlined through automation. It also sets out some practical ways to get started. Click to download the Guide ‘How to Automate & Accelerate your Wine Business’.