TradeMe

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Trade Me
Trade Me page as of 2007
URL	http://www.trademe.co.nz
Type of site	Auction site
Registration	Free
Owner	Trademe Ltd/Fairfax Media
Created by	Sam Morgan
Launched	1999

TradeMe, managed by the company Trade Me Ltd, is the largest Internet-auction website operating in New Zealand as of 2007. New Zealand entrepreneur Sam Morgan founded the site in 1999, and after some years of overall dramatic growth sold it to Fairfax in 2006 for NZ$700 million. Trade Me Ltd also operates several sister websites including Find Someone, Old Friends, Travelbug, Safe Trader and smaps.

Trade Me Ltd has become New Zealand's largest company of its type, and its flagship (http://trademe.co.nz) became the most popular website in the country in 2005.^{[citation needed]} The group of sites collectively generate just over 50% of all web-page traffic originating from New Zealand-based servers.^{[citation needed]} In a country with a population around 4,177,000,^[1] the TradeMe site currently has 1,578,717 active members^[2], with approximately 60,000 people online and 1,030,000 auctions running during peak hours.[2]

Participating traders can use New Zealand's banking system to settle payments. Many traders settle by bank-transfer, pago or by bank-deposit, and Australian sellers must have a New Zealand bank-account. 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. TradeMe transactions do not require PayPal, as Australian buyers can pay with cheques, which many New Zealand banks will negotiate free-of-charge.

TradeMe shares many features with other online auction-websites, such as the American auction-site 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. Significantly, despite its global reach, eBay has failed to make a sizable penetration in the geographically isolated New Zealand market.

Contents 1 History 1.1 Origins and early development 1.2 Growth and expansion 1.3 Acquisition by Fairfax 2 Listings 3 Community and related sites 4 Controversy 4.1 Fraud and controversy 4.2 Third-party software 5 Notable auctions 6 References 7 Further reading 8 External links

[edit] History

[edit] Origins and early development

Sam Morgan founded TradeMe during the first few months of 1999, constructing the site while working full-time for Deloittes as a technology-consultant. Within Deloittes, Morgan worked on Internet projects and supply-chain issues.^[3] During this time he witnessed the successes of online businesses like eBay, Yahoo etc, as well as the disasters of the dotcom bubble.

According to TradeMe legend,^[4] Morgan, then 23 years old, decided to found the TradeMe site when he could not find a heater for his flat in Wellington. Despite searching the Internet, he couldn't find his requirement anywhere. The Trade and 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 TradeMe 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." ^[4]

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.^[4] In its early stages Morgan humorously listed TradeMe 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.

TradeMe developed slowly initially, because its founder had little funding to pay for the costs of hosting and of expanding the site. In addition, TradeMe 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 Deloittes 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 TradeMe involved simply increasing its user-base and encouraging members to refer their friends to the site. TradeMe launched the Safe Trader escrow service about this time.

For a snapshot of TradeMe's early development see the Internet Archive's TradeMe archive.

[edit] Growth and expansion

In its early years TradeMe 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. TradeMe 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 TradeMe, saving the site from potential financial disaster.

eBay tried to enter the New Zealand market in 2001, but had little success. TradeMe 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."^[5]

Morgan took time off from the stress of running the booming TradeMe site in September 2001, and went to the United Kingdom to manage an IT team in London. When he returned to his role at TradeMe the site had become profitable, with a membership of 100,000 and growing. By April 2005 this number reached one million.

In 2005 New Zealand's Deloitte/Unlimited Fast 50 rated TradeMe the fastest-growing technology company.^[6]

[edit] Acquisition by Fairfax

On March 6, 2006 the Australian media company Fairfax acquired TradeMe 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. Sam Morgan and other executives remained with TradeMe.^[7] Since the Fairfax purchase, TradeMe has become integrated with other Fairfax operations, for example the former Fairfax sites Jobstuff and Propertystuff have disappeared into TradeMe's sections for these listings.

[edit] Listings

TradeMe has increased its scope over time, and now offers a wide range of listing-possibilities. It has most recently moved into the online job-listing market, in competition with sites like Seek.co.nz. Customers can list the following items and positions on TradeMe:

• general items
• cars, motorbikes and boats
• property
• jobs
• rental property
• flatmates

In 2006 TradeMe 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". TradeMe stated that it had properties listed on the TradeMe website which Realestate.co.nz did not have. TradeMe 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.^[8]

[edit] Community and related sites

The TradeMe site has a general messageboard where members can participate in discussions on a variety of topics, ask questions and seek advice. Controversial postings or flame-wars have occasionally resulted in interference in auctions by members with opposing views.

Trade Me Limited owns several sites which appear grouped together as tabs at the top of the TradeMe website (see top of page), allowing navigation between the related pages. The most recent additions to the TradeMe group of websites include the online map site "smaps", which provides convenient access to New Zealand street-maps, and the Fairfax site stuff.co.nz, which had no place in the TradeMe interface prior to the takeover.

Fairfax sites include:

• TradeMe - the main TradeMe auction site
• Find Someone - a matchmaking site
• Old Friends - finding old school-friends and workmates
• Travelbug - booking travel-accommodation
• SafeTrader - escrow service
• smaps - online-maps interface (similar to Google Maps) specializing in street-maps without the satellite-imaging
• Stuff - news and information site

[edit] Controversy

[edit] Fraud and controversy

As a fairly open marketplace, TradeMe experiences the same problems (such as fraudsters) any online auction website does, and users need to exercise vigilance. In recent times, TradeMe set up a dedicated team which investigates fraud on-site and has a 100% record in gaining convictions for those offenders identified as using TradeMe as a medium^{[citation needed]}.

Members can report fraud or listing that are in breach of the Terms and Conditions"^[10] 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.

The website www.scambusters.co.nz functions as an independent site of proclaimed watchers of fraud on TradeMe. The group comprises amateur online members, and while they present themselves as a site for reporting fraud on TradeMe, they have no affiliation to TradeMe, and therefore no access to some of the information or help that potential victims might need. This forum would arguably become quite unnecessary^{[citation needed]} if Trade Me followed Ebay's practice of allowing its clients to email each other through its own centre, and if it provided a disputes-committee along the same lines as Ebay. The lack of these facilities at TradeMe causes many more problems than it solves.^{[citation needed]}

To minimise payment-problems and reduce fraud, TradeMe restricted membership to residents of New Zealand and of Australia in 2005. This affected around 20,000 international members.

TradeMe'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 under-age users, even allowing them to enter in their correct birthdates upon sign-up. In June 2005 Fair Go,^[11] 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. As of 2007, Trade Me regularly removes members who it finds have provided false details of age^{[citation needed]}.

[edit] Third-party software

TradeMe have actively rebuffed some attempts to develop third-party software which interfaces with the TradeMe website.

On August 19, 2006 the New Zealand Listener published an article, "Bidding War" ^[12] on one such developer. This third party developer created a piece of software, AuctionBar, which scraped data from Trademe's website. Such scraping apparently directly contravenes the "Terms and Conditions"^[10] of the TradeMe website. TradeMe specifies therein: "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). The software purportedly 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 acts as an automated bidding-tool.

On May 7, 2007 TradeMe released a Windows Vista Sidebar Gadget to run in the Windows Sidebar. This gadget, available on the TradeMe site, became the first sanctioned application to work with TradeMe. 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.

[edit] Notable auctions

• A "comfort hug", auctioned in April 2005 to promote love and good feelings.^[13] The auction received considerable media attention.^[14]
• In late 2005, a member offered a time-machine for sale through auction (or swap for "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. Currently this auction holds the record for the highest number of questions asked and answered.^[15]
• In 2006 a user attempted to auction the Optus B1 satellite following a malfunction. ^[16] The opening price started at NZ$200,000,000. TradeMe 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, TradeMe admins withdrew the auction. One News (a broadcast television programme) ran a report on this auction.^[17]

• Also in May 2006 a member tried to sell his leg — amputated a year earlier as a result of diabetes.^[18] TradeMe withdrew the auction within hours and swiftly added "Body Parts" to the "Prohibited Items" list.^[19]
• In June 2006 Wellington Hurricanes player Tana Umaga hit team-mate Chris Masoe with a Roxy handbag at the "Jolly Poacher" bar in Christchurch after Masoe got into an altercation with a patron. The owner of the bag auctioned it via TradeMe for $22,800, generating a large media-story and over 1 million page-views before the auction closed. ^[20]

Main article: 2006 rugby union handbag controversy

• 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. ^[21] The winning bid of $4,010 later proved not genuine ^[22]
• 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 nation-wide television-programme, Campbell Live, to announce she would not accept anything less than $78,662,500,000 NZD as she believes that someone would very much treasure the item. She presented herself as non-religious and offered this as the reason why she chose to onsell the pebble. Corlet's auction of the "Virgin Mary pebble" has proven to be one of the most highly viewed auctions on TradeMe, with over 100,000 views (so far). The current bid stands, as of October 28, 2007, at $31,600.50 NZD. Corlet believes more people will choose to bid near the time the auction draws to a close.^[23]

Note: TradeMe recently changed its policy so that sessions browsing the website could no longer view Q&A sections on past auctions. The site later reverted this decision after complaints from members; however, withdrawn auctions become unviewable after 60 days.

[edit] References

[edit] Further reading

Two how-to books about Trademe 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 p ISBN 0958263418
• Trade Me : your ultimate guide by Juha Saarinen (foreword by Sam Morgan), Penguin 2005, 179 p ISBN 0143020447

[edit] External links

• TradeMe - official site
• Fairfax Australia
• New Site: Free Online Auctions, No Success Fees (Article on 'TradeFree' from Scoop.)