Trade Me is the largest Internet auction website operating in New Zealand. Managed by Trade Me Ltd., the site was founded in 1999 by New Zealand entrepreneur Sam Morgan, who sold it to Fairfax in 2006 for NZ$700 million. Trade Me was publicly listed as a separate entity on 13 December 2011 under the ticker "TME". Trade Me Ltd also operates several sister websites including Find Someone, Travelbug, Safe Trader, Holiday Houses and LifeDirect (online insurance comparisons)
As of August 2015, Trade Me's website is the fifth most visited in New Zealand and is ranked 1,844th globally according to Alexa Internet. In 2006, the group of sites collectively generated over 60% of all web traffic originating in New Zealand. In a country with a population of 4.8 million, the Trade Me site has, as of August 2015, 3.7 million active members. As of June 2015, an average of 878,000 people visit the site each day.
Participating traders primarily use New Zealand's banking system to settle payments, although Trade Me now offers sellers the ability to accept credit card payments by 'Pay Now'. Australian sellers must have a New Zealand bank account, while sellers from other countries are not allowed on the site without special approval, which reduces the potential for fraud. Many buyers pay cash on pickup with larger items -- probably partially due to the relative concentration of the New Zealand population in a relatively small number of urban areas.
Trade Me shares many features with other online auction websites, such as eBay. Some of these features include "Buy Now", "Auto bidding" and the Safe Trader escrow service. Members in New Zealand can become "Address Verified" by confirming their street address, and sellers may choose to block unverified members from bidding.
Video Trade Me
History
Origins and early development
Sam Morgan founded Trade Me during the first few months of 1999, constructing the site while working full-time for Deloitte as a technology consultant. Within Deloitte, Morgan worked on Internet projects and supply-chain issues. During this time he witnessed the successes of online businesses like eBay and Yahoo, as well as the disasters of the dot-com bubble.
According to Trade Me legend, Morgan, then 23 years old, decided to found the Trade Me site when, despite searching online, he could not find a heater for his flat in Wellington. The Trade & Exchange site had a heater for sale, but held back listings for a week before publishing them online, and by the time Morgan made contact with the heater's owner, the item in question had already sold.
Morgan describes the initial designing and building of Trade Me thus:
"Some time later we were in a backpackers in Sydney and got evicted because it was overbooked. We went up to some backwater because it was the only accommodation we could find. Anyway, there was nothing to do, so that night I started drawing a data model. So it sort of started there really. Then when I came back to Wellington I literally sat on the couch and built the site on a laptop over a five- or six-week period."
The site went online in March 1999 after Morgan pulled together as much funding as he could. It gained 155 members in its first week on the Internet. In its early stages Morgan humorously listed Trade Me for sale on eBay with a $1 million buy-now price. Though eBay withdrew Morgan's auction, the prank sparked some interest among New Zealanders who realized the potential of online trading.
Trade Me developed slowly initially, because its founder had little funding to pay for the costs of hosting and of expanding the site. In addition, Trade Me initially offered a completely free service for both buyers and sellers, a strategy for expanding its member base at the cost of short-term revenue. With little money and time available to work on the site, Morgan made the critical decision to sell almost half of his new company to his former Deloitte colleagues, bringing him around $75,000.
By August 1999 membership had risen to 3500, and Morgan could dedicate most of his time and funding to the site. The early strategy for Trade Me involved simply increasing its user base and encouraging members to refer their friends to the site. Trade Me launched the Safe Trader escrow service about this time.
For a snapshot of Trade Me's early development see the Internet Archive's Trade Me archive.
The running Kiwi in the Trade Me logo is named "Kevin" or "Kev" and his name can be seen by hovering over the site logo. Trade Me often change the logo and stylise Kevin to reflect major events in the calendar.
Growth and expansion
In its early years Trade Me continued to struggle, slowly increasing its user base, but facing financial challenges. The site initially used web banners, but falling prices for advertising made web-banner revenue insufficient to cover expenses. Trade Me then introduced fees for auction services: first for features such as bold titles; then in September 2000 it introduced "success fees". This action proved the turning point for Trade Me, saving the site from potential financial disaster. Much of the success to come was based around the 'Trade Me Manifesto', a series of ten values for keeping the site fast and the company technology focused.
eBay tried to enter the New Zealand market in 2001, but had little success. Trade Me has remained the major Internet-auction site in New Zealand, with both international and smaller national competitors gaining relatively little market penetration. Morgan commented on eBay's attempt to penetrate the New Zealand market in an interview:
- "...I think there are big cultural issues there that are just not well understood. For example the Americans think that everyone has a zip code [...] they were a little late in and then they launched in US dollars."
Morgan took time off from the stress of running the booming Trade Me site in September 2001, and went to the United Kingdom to manage an IT team in London. When he returned to his role at Trade Me the site had become profitable, with a membership of 100,000 and growing. By April 2005 this number reached one million.
In August 2003 Trade Me went live with Trade Me Motors.
In 2005 New Zealand's Deloitte/Unlimited Fast 50 rated Trade Me the fastest-growing NZ technology company for the previous year.
Acquisition by Fairfax
On 6 March 2006 the Australian media company Fairfax acquired Trade Me in a deal worth NZ$700 million, with an additional NZ$50 million payable if the organisation met earnings targets over the next two years. (Those targets were met.) Sam Morgan and other executives remained with Trade Me. Since the Fairfax purchase, Trade Me has continued to stand alone, with the former Fairfax NZ sites Jobstuff and Propertystuff being discontinued in favour of the Trade Me offerings.
In December 2012, Fairfax announced it was looking to sell off its stake in Trade Me in order to pay off debts. The sale was confirmed on 17 December. Its first profit report following the sale beat expectations, at NZ$37.4 million in the second half of 2012.
Maps Trade Me
Listings
Trade Me has increased its scope over time, and now offers a wide range of listing possibilities. Customers can list the following items and positions on Trade Me:
- General items
- Motors: cars, motorbikes and boats
- Property
- Jobs
- Rental property
- Flatmates wanted
- Antiques & Collectables
- Pets And Animals
Trade Me sites include:
- Trade Me - the main Trade Me auction site
- FindSomeone - a matchmaking/dating site
- Travelbug - booking travel/hotel accommodation
- Holiday Houses - booking holiday homes/baches - rental accommodation
- MotorWeb - vehicle license plate lookup and basic facts site
Discontinued sites
- The online map site smaps, which provided convenient access to New Zealand street maps, was permanently closed in December 2008, leaving the niche to sites like Google Maps. Smaps was previously embedded in Trade Me Property & Travelbug listings; both now use Google Maps
- Old Friends - finding old school friends and workmates - discontinued in January 2016
- SafeTrader - escrow service for Trade Me auctions - discontinued in July 2017
Controversy
As a fairly open marketplace which is recognised globally, Trade Me experiences the same problems (such as fraudsters), and users need to exercise vigilance. In recent times, Trade Me set up a dedicated team which investigates fraud on-site and has a 100% record in gaining convictions for those offenders identified as using Trade Me as a medium.
"Members can report fraud or listing that are in breach of the Terms and Conditions" via the "Community Watch" (CW) feature, sited at the bottom of every auction. Contact with staff can also be made via the 'Contact Us' link at the bottom of every page, however, Trade Me does not provide a direct email address for customer support. Social media can also be used to contact Trade Me, and is a route some high-profile users utilise when controversial items are listed on the site.
A website, www.scambusters.co.nz, functioned as an independent group of watchers of fraud on Trade Me. The group comprises amateur online members, and while they presented themselves as a site for reporting fraud on Trade Me, they had no affiliation to Trade Me, and therefore no access to some of the information or help that potential victims might need. A Facebook Group New Zealand scammers files claims of Trade Me fraud.
To minimise payment problems and reduce fraud, Trade Me restricted membership to residents of New Zealand and of Australia in 2005. This affected around 20,000 international members. However, in September 2013 Trade Me announced that it had "opened up its borders" and now has "a few internationally based sellers trading on the site," but that "only international sellers who meet our requirements for selling from overseas are allowed to do so."
Trade Me's terms and conditions did not always specify a restriction to persons over eighteen years of age, although any user under the age of eighteen can not negotiate a legally binding contract. As recently as October 2005 the "Terms and Conditions" merely stated: "Becoming a member is free and there are no restrictions on who may become a member of Trade Me", with no mention of an under-eighteen-years-of-age ban. Prior to mid-2005 Trade Me did not restrict underage users, even allowing them to enter in their correct birthdates upon sign-up. In June 2005 Fair Go, a television programme devoted to consumer affairs, approached Trade Me Limited regarding this issue and featured the matter on a broadcast episode. In response to this, Trade Me Limited sent all the users who registered their date of birth as under eighteen an e-mail asking them to check and update their details if incorrect. Trade Me no longer allows users to register if they enter a birth date indicating their age as under eighteen, but people under eighteen may simply represent themselves as older when they join.
Clashes with rivals
In 2006 Trade Me laid a complaint with the Advertising Standards Authority (ASA) over the advertising of its largest property market competitor, Realestate.co.nz. According to the complaint, Realestate.co.nz, (run jointly by the Real Estate Institute of New Zealand (REINZ) and Property Page Ltd) had misled consumers with their advertisements with their slogan: "the only place with every place". Trade Me stated that it had properties listed on the Trade Me website which Realestate.co.nz did not have. Trade Me also detailed other reasons why Realestate.co.nz had allegedly breached the ASA's code of ethics and comparative advertising. The ASA upheld parts of the complaint.
On 6 November 2008, Lixtor accused Trade Me of using bullying tactics. Trade Me said Lixtor was just trying to draw media attention.
On 20 November 2008, a community newspaper The Aucklander also reported that Trade Me's lawyers asked Lixtor to remove their "Terms and Conditions"
On 3 February 2009, in the wake of the emerging New Zealand copyright law Section 92a, New Zealand Creative Freedom Foundation published an article. It was stated that Lixtor vs. Trade Me case is a good example of how the new section 92a in the New Zealand copyright law could be "misused", if passed.
Clashes with software developers
Various software developers have received legal threats after developing third-party software which interfaces with the Trade Me website.
On 19 August 2006 the New Zealand Listener published an article, "Bidding War" on one such developer. The developer, Ciaran Riddell, created a piece of software, AuctionBar, which used a technique known as screen scraping. The software allowed for more detailed searches for goods on sale as well as bids and updates via text-messaging and a tool known as a "sniper", which acted as an automated bidding tool.
Trade Me have since amended the "Terms and Conditions" of the Trade Me website which now specifies "You may not use a robot, spider, scraper or other automated means to access the Website or information featured on it for any purpose" under s4.1(c).
On 7 May 2007, Trade Me released a Windows Vista Sidebar Gadget to run in the Windows Sidebar. This gadget, available on the Trade Me site, became the first sanctioned application to work with Trade Me. As the Vista Gadget requires an XML Feed, the gadget caused further discussion in the developer community about why TradeMe did not have an API. It also led to other creations by the developer community on top of Vista Gadget.
Trade Me has now released an official API.
Notable auctions
Most popular auctions
As of July 2013, the most popular auctions were as follows:
Other popular auctions
- A "comfort hug", auctioned in April 2005 to promote love and good feelings. The auction received considerable media attention.
- In October 2005 a man attempted to sell a dolphin he accidentally caught while net fishing. This later turned out to be a hoax.
- In late 2005, a member offered a "time machine" for sale through auction (or swap for an "anti gravity machine"), with the highest bid reaching $300,000,000,001,999. The seller withdrew the auction shortly before its close time. News of the auction reached some New Zealand newspapers, which ran a story on it. This auction used to hold the record for the highest number of questions asked and answered.
- In 2006 a user attempted to auction the Optus B1 satellite following a malfunction. The opening price started at NZ$200,000,000. Trade Me withdrew the auction after 231,908 page views.
- In May 2006 a member tried to sell Australia, using humorous descriptions of the country. The auction drew over 100 questions, and had more than 11,000 views. The country achieved a bid of $200,045,400, with a reserve price of 50 cents. In the end however, Trade Me administrators withdrew the auction. One News (a broadcast television programme) ran a report on this auction.
- Also in May 2006 a member tried to sell his leg -- amputated a year earlier as a result of diabetes. Trade Me withdrew the auction within hours and swiftly added "Body Parts" to the "Prohibited Items" list.
- In June 2006 Lisa Lewis streaked across the field at the All Blacks game against Ireland held at Waikato Stadium. Days later the bikini Lewis had worn ended up for auction. The winning bid of $4,010 later proved not genuine
- In October 2007 Lisa-Marie Corlet stumbled across a pebble with markings allegedly resembling the Virgin Mary. A first auction completed, but the bids later proved invalid. Corlet went on a nationwide television programme, Campbell Live, to announce she would not accept anything less than NZ$78,662,500,000 as she believes that someone would very much treasure the item. She said she was non-religious and offered this as the reason why she chose to on-sell the pebble. It was one of the most highly viewed auctions on Trade Me, with over 100,000 views, but the pebble failed to sell.
- On 17 November 2008 Lixtor attempted to auction their auction site following dispute with Trade Me over copyright-infringement allegations. The opening price started at NZ$100,000,000. Trade Me withdrew the auction after a few hours.
- February 2010: The Trade Me user rhorne listed a lemon; with the letters "XT" printed vividly upon it; for sale with a humorous description. This was designed to mock the XT Mobile Network due to its intermittent outages (which caused significant inconvenience to customers and delayed emergency service responses) and other flaws. There were some suggestions made on the auction that the proceeds should be donated to charity, however the seller made it clear that was not his intention. The auction sold for $1,155.
- In February 2012, Labour MP Trevor Mallard was accused of ticket scalping on Trade Me when he sold four tickets to the Homegrown music festival for a $246 profit. The MP had in 2006 initiated legislation, the Major Events Management Act 2007, prohibiting ticket scalping for major events (although Homegrown wasn't classified as a "major event" so wasn't covered). He later offered to refund the money he received for the tickets.
- In June 2012, the Greater Wellington Regional Council listed a two-car DM/D "English Electric" electric multiple unit for sale. The listing was put up on the same day the last of the units were withdrawn after 74 years of revenue service on the Wellington commuter lines, and claimed having done 4.5 million kilometres and having four million previous owners when state-owned. After one false bid accidentally placed by a four-year-old, the unit (motor car DM 562 and trailer car D 2786) was bought for $30,000 by a bidder from Nelson, who planned to convert the unit into accommodation.
- In February 2013, four students (Damien Taylor, Ronan Broad, Scott Allan, and Alex Woodham) flatting in Christchurch listed their 43" Toshiba television, initially using a photo of the TV running the popular game Jonah Lomu Rugby TM as a selling point. As the auction progressed, however, they began to upload a number of comedic photos demonstrating their intimate relationship with the TV. Depicting the four variously playing Jonah Lomu Rugby TM in the bath, taking the TV to feed the ducks, supporting the TV as it busked outside a local supermarket, and, most notably, accompanying the TV on a punt down the river Avon, the auction quickly became a public sensation and was featured in the National Headlines on Stuff.co.nz as well as being acknowledged by The Christchurch Press and national New Zealand radio station The Edge. The auction received well over 150, 000 views and over 200 comments. As a charity auction all proceeds were donated to the Jonah Lomu Kidney Kids Foundation.
Note: Withdrawn auctions become unviewable after 60 days and bid histories after 45.
Notable people
- Sam Morgan, founder
- Gareth Morgan, investor
- Rowan Simpson, Head of Software Development
- Lance Wiggs, adviser to Sam Morgan for the company's sale to Fairfax
- Mike O'Donnell, Chief Operating Officer
See also
- Internet in New Zealand
References
Further reading
Two how-to books about Trade Me have appeared:
- Trade Me Success Secrets : How To Buy Better & Sell More Profitably On New Zealand's Most Popular Auction Site by Michael Carney, Activity Press, 2005, 294 pp. ISBN 0-9582634-1-8
- Trade Me : your ultimate guide by Juha Saarinen (foreword by Sam Morgan), Penguin 2005, 179 pp. ISBN 0-14-302044-7
Insider Michael (MOD) O'Donnell published a comprehensive book on the rise of Trade Me
- "Trade Me: The inside Story" by Michael O'Donnell, Phantom House Books, 2010 220 pp. ISBN 0-9864571-1-6
External links
- TradeMe - official site
- Trade Me on Facebook
- Trade Me on Twitter
Source of article : Wikipedia
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