Well done Trade Me, but the threat remains

There’s an interesting article over at eBay strategies, which talks about how eBay lost the market for classifieds and mentions that Amazon is taking out the top end. (If you work at Trade Me then you should have eBay Strategies in your RSS reader)

I’ve mentioned it here before, and it bears repeating: Trade Me is different.

Trade Me has captured the Motors market, is well ahead of the incumbent in Property traffic and just behind the incumbent in Jobs. They are also in flats ( and have been for years) and rental property.

Meanwhile Trade Me’s free listings and simple localization meant that they have always been in the local classifieds game – things like sofas and so forth that require a face to face transaction.

The overall effect was a business that left no space for the well executed Zillion and Finda to get traction.

So well done Trade Me, but the threat will always be there – screw up and someone will take big chunks of the business. This will happen, for example, if Trade Me attempts to increase fees too much or if usability is lost in a host of features. If so then Craigslist, Gumtree or say Zillion will be right there to pick up the volume.

Sadly for the competitive threat Trade Me is still following the path to usability, and while I’d like to see lower fees in tough times they are probably at the right level for now.

It’s the same at the top end for eBay with higher quality product sellers moving across to Amazon.

Indeed while a substantial percentage (say 40%) of Trade Me’s listings are new, there does remain a bit of a gap in the market for direct selling of quality new products. It’s the one Ferrit was so hapless at finding, and I’ve mentioned how you can take advantage before. The gap is pretty tiny, but between New Zealand and Australia (where eBay is also screwing up) there is plenty of scope.

I’m saddened at just how eBay have managed to lose the plot, but respect Trade Me and how they are still showing the way after 10 years.

Published by Lance Wiggs


6 replies on “Well done Trade Me, but the threat remains”

  1. EBay (well eBay Australia, I can’t speak for the rest of the world) really is a horrible user experience all round. It’s an expensive place to sell. Or not sell, charges apply if you don’t find a buyer. It’s also a surprisingly expensive place to buy.

    Trademe on the other hand is a far better user experience and doesn’t cost anything other than time when products fail to sell.

    I really don’t see eBay threatening Trademe in New Zealand without changing its naff business model.

    On the other hand I’m surprised Fairfax hasn’t rolled out Trademe in Australia. Particularly now eBay is on the ropes. Fairfax doesn’t have much spare cash to finance the roll-out, but it needed be that expensive, the company already has a great web presence, so it could kick-start off the back of the news web sites.


  2. While I on the whole also find Trademe’s auction success fees reasonable, I was shocked to find it was $39 to list my car as a classified, and an additional $39 to run it as an auction (with reserve over $1000).

    I agree, Trademe is THE place to list a car or parts, so they can afford to charge a premium now. However it would be interesting to see a smaller player gain traction based on lower fees. After all, Fairfax is going to have to claw back some of the $700M odd they paid for Trademe (well done Lance).

    I’ve always had a slight interest in WeBuy, it will never be Trademe but I hope they manage to succeed where possible. If Trademe gets it wrong, WeBuy could also benefit alongside Zillion & other sites.


  3. I read an interesting ‘alternative’ history of TradeMe recently. It suggests that the business was actually sold to fairfax by listing it on eBay.

    i think this has to be taken with a pinch of salt. possibly even a bag. although it is a very funny read.


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