TradeMe: the largest Internet-auction website in New Zealand
What is TradeMe?
Founded in 1999 – TradeMe is the largest Internet-auction website in New Zealand where Kiwis buy and sell online.
The core idea of TradeMe is to connect people and businesses to each other, and provide them with information and tools they need to undertake a transaction.
TradeMe shares many features with other online auction websites, such as eBay, some of which includes “Buy Now”, “Auto bidding” and the Safe Trader escrow service, etc…
Over the period of time, TradeMe has increased their scope of offerings and now offers a wide range of listings which includes everything from General items, cars, motorbikes, boats, Property, Jobs, Rental property, Flatmates wanted, Antiques & Collectables, Pets And Animals, to almost everything else…
With 3.7 Million active users, in a population of 4.5 Million; TradeMe is currently the leading online marketplace and classified advertising platform in New Zealand.
Other than TradeMe, the company also owns a whole range of other sites, which includes:
- SafeTrader – Escrow service for Trade Me auctions
- FindSomeone – Matchmaking/dating site
- Old Friends – Finding old school friends and workmates – site now closed in January 2016
- Travelbug – Booking travel/hotel accommodation
- Holiday Houses – Booking holiday homes and rental accommodation
As a Buyer…
Not only can you search for something in particular by using a keyword or auction reference number, but you can also save your favourite searches and get matching listings emailed to you by clicking the ‘save this search’ button on the search results page, as well. Additionally, you can also save your favourite categories and get new listings emailed to you too! And all this can be managed using your ‘My TradeMe’ page.
Now to be able to bid, you must be a registered member and, your bid must match the start price or the minimum next bid amount and, if you are outbid you will be sent an eMail about the same. Although, you can opt for Auto-Bids (TradeMe keeps you in the lead by placing a minimum allowable bid for you whenever you’re outbid, until you win the auction) to keep you in the game!
Once the ‘Reserve Price’ (the lowest price the seller is willing to sell their item for) has been achieved, the item will be sold to the highest bidder when the auction finishes.
Next, TradeMe will send you and the seller automated emails containing each other’s contact details, post which, it is then up both the parties to get in touch with each other to arrange the payment/shipping details.
As a Seller…
If you wish to list your item on the site, you need to make sure about a few things: -
- write a clear and descriptive title along with a detailed description
- Decide a fair start and reserve price
- Set a finish time that is convenient for buyers
- Include shipping costs, if relevant
- And lastly, add good quality photos
You can manage your listings from your My Trade Me page, and can also keep a track of your listings using their mobile app.
Once the listing is sold, you need to get in touch with the bidder as soon and arrange a payment and delivery. The Payment instructions feature lets you create and store a standard template to use when you contact buyers. It typically includes your bank account details, payment terms and shipping information.
Most preferred ways are: by meeting up, bank deposit, Pay Now (credit or debit card), or cheque.
If you’re a Business Seller, then great facilities such as Branded Store, Easy integration options, etc are also offered.
A ‘Success Fee’ is applied if your item sells, which varies depending on the product listing, and is somewhere around 7-10% of the principle amount. This is refundable if the sale isn’t completed.
Who is the founder?
TradeMe was founded by Sam Morgan in 1999!
Born in 1975, Sam grew up in Wellington in New Zealand in a family where his father was an Economist and mother who was a local bus driver. He had attended the Rongotai College and then Victoria University of Wellington before dropping out in 1995.
He started his career in 1996 with Deloitte Consulting as a Consultant and went on to work with them for about 3 years.
His life as an employee was a rather a short one and he went on to start his first venture TradeMe, as soon as he left Deloitte in 1999. He sold the company to Fairfax in 2006 for NZ$750 Million, but held the position of the CEO till 2008.
Soon after he sold his firm, he founded an investment group called Jasmine Investment Holdings in 2006. It was a private foundation that was focused on high impact philanthropy. As of 2014, it had invested in around 20 philanthropic projects, some of which were focused on reducing the effects of poverty.
In the year of 2010, Sam also became the Director for Tourism New Zealand, along with several other companies such as Sonar6 (Online performance management software), Gareth Morgan Investments Ltd, Fairfax Media, Vend, Xero, etc…
While at it, he had also took over the position of Chairman at Pacific Fibre in the same year as well. Pacific Fibre was a company that laid cables from Australia to the US via New Zealand to provide New Zealanders unlimited cheap broadband in the process. He is also the Executive Chairman at vWork App, too.
In 2011, Sam was also retained back as a Director at TradeMe!
Presently, he acts as an investor and advisor to a range of start-ups and is also involved with various not-for-profit organisations such as: Medicine Mondiale and One Acre Fund.
What’s their story?
It all began in the year of 1999!
He was working for Deloitte, as a Technology Consultant on Internet projects and supply-chain issues, where he had witnessed the successes of online businesses like eBay and Yahoo.
During that time, due to a personal pain point that he faced when he could not find a heater for his flat in Wellington, and had faced tremendous issues in buying one online as well, he decided to take the matters in his own hands.
That is when he began the construction of TradeMe, and got it up and running in just weeks! He was just 23 years old, back then. Even though, the idea sounded bookish, it had potential.
And TradeMe was live in March 1999!
In just two days, the company had its first twenty registered users, which further increased to 155 members in its first week on the Internet.
This is when, TradeMe began growing slowly. Its speed was rather slow, also because its founder had little funding to pay for the costs of hosting and of expanding the site. Plus, since Sam initially offered the service for free (to buyers and sellers), as a strategy for expanding its member-base, he didn’t earn any revenues as well.
The situation worsened when the prices of web-banners (which they depended on the most for revenues) started falling, making it difficult to cover expenses.
Interestingly, as a prank, Sam had listed TradeMe for sale on eBay with a $1 million buy-now price. And although eBay withdrew Morgan’s auction, but this prank managed to catch the eye of New Zealanders who realized the potential of online trading.
That is when his friends from Deloitte came for his rescue. Some former Deloitte colleagues had started a business investment firm and had heard about Sam’s venture. They could see the success eBay was having overseas, and decided to help Sam out, with an investment of $75,000 (in against for some stake in the company), and also provided some office space and a salary too.
They also provided technical and business support, along with hiring a few employees and infusing the much needed computer hardware to keep the site loading fast.
The investment was the much needed boost Sam and TradeMe!
In September 2000, came the turning point for the company, when TradeMe introduced ‘Success Fees’ for auction services, thus saving the company from a potential financial disaster.
This was followed by a much needed ‘Trade Me Manifesto’, a series of ten values for keeping the site fast and the company technology focused.
Looking at the success of TradeMe, eBay tried to enter the New Zealand market in 2001, as well. But since, TradeMe had managed to take a strong hold of the NZ market, it found little success here.
By 2002, the company had reached profitability and was now accounting for 100,000 members.
And finally, the journey of Sam with TradeMe came to an end, when he sold the company to Australia-based Fairfax Media for NZ$750 million in 2006. The deal included an additional NZ$50 million to be paid to Sam if the organisation met earnings-targets over the next two years (Those targets were met).
In December 2012, Fairfax sold their stakes in TradeMe in order to pay off debts. The same year, TradeMe had also launched their IPO on the New Zealand Stock Exchange, and became a publicly listed company. This was followed by a deal with international eCommerce company ChannelAdvisor, to empower the online retailers around the world to list their products on the Kiwi site.
By the year 2014, the site was touching 1.8 million auctions getting listed every week, out of which 250,000 were being sold. This lead to more than $750 million of sales each year, with an earning profit of $78.6 Million!
And all of this was achieved with more-or-less, zero advertising!
With 3.7 million active members in New Zealand (in a population of 4.5 Million), TradeMe is now considered to be one of the most visited websites in the New Zealand, leaving behind Facebook.