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TradeMe is (as of 2007 ) the largest Internet Auction website operating in New Zealand , and is managed by the company Trade Me Ltd. New Zealand entrepreneur Sam Morgan founded the site in 1999, and after many years of rapid growth sold it to Fairfax in 2006 for NZ$700 million. Trade Me Ltd also operates several sister websites including '''Find Someone''', '''Old Friends''', '''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 TradeMe Currently has 1,578,717 active members TradeMe Statistics , with approximately 60,000 people Online and 800,000 auctions running during peak hours. Participating traders can use New Zealand's banking system to settle payments. Many traders settle by bank transfer 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 concentration of the New Zealand population in a 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 the site may 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. HISTORY Origins and early development from October 1999.]] , 2006 During this time he witnessed the successes of online Business es like eBay, Yahoo etc, as well as the disasters of the Dotcom Bubble . According to TradeMe legend, Hard road to online fame and fortune - 11 Mar 2006 Accessed: 10 December 2006 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 what he was looking for 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:
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 TradeMe for sale on eBay with a $1 million buy-now price. Though eBay withdrew Morgan's auction, it 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.
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-banner s, 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 (such as Zillion ) gaining little market penetration. Morgan offers his thoughts 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 {Link without Title} they were a little late in and then they launched in US dollars." TradeMe: Big Fish In A Small Pond August 21, 2006, Accessed 10 December 2006 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. NZX: By Company Released 6 March , 2006; Accessed 10 December 2006 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. "Fairfax To Acquire Trade Me, New Zealand's Leading Internet Business" 6 March 2006, Accessed on 10 December 2006 Since the purchase, TradeMe has become integrated with other Fairfax operations, for example the former Fairfax sites Jobstuff and Propertystuff [http://www.propertystuff.co.nz have disappeared into TradeMe's sections for these listings. 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:
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 explained other causes why Realestate.co.nz had breached the ASA's code of ethics and comparative advertising. The ASA upheld parts of the complaint. Complaint to ASA (.rtf) 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 are grouped together as Tabs at the top of the TradeMe website (see top of page), allowing navigation between the related sites. 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 was not part of the TradeMe interface prior to the takeover. Fairfax sites include:
CONTROVERSY Fraud and controversy As a fairly open marketplace, TradeMe experiences the same problems (such as fraudsters) any online auction website does, and users should exercise increasing vigilance. In Recent Times , TradeMe has a dedicated team which investigates fraud on site and has a 100% record in gaining convictions for those offenders using Trade me as a medium. TradeMe involves many sellers. Some of the sellers tend to have very bad feedback, but can still continue to trade and sell. For example, a trader might have 1,500 good individual feed-backs and could also have 150 bad individual feed-backs. If the bad feedbacks involve serious breaches of the sites terms and conditions, or fraudulent activity, the member will be banned with as little as one or two bad feedbacks. If the breaches are not serious, the allowable threshold is %5 before a member will be automatically banned. Members can report fraud via the "Community Watch" feature, sited at the bottom of every auction. However Trade Me allows no direct communication between its clients and itself, no email reply address is available, and it does not publish its physical address for receiving post anywhere on its site. The CW feature and the ONLY contact feature available an expensive phone call , limits the amount of letters allowed to somewhere around 1000, and as the company is in the habit of sending email to its members often threatening to withdraw what they term as "Membership Privileges", their clients frequently find themselves at a loss in trying to obtain justice or defend themselves against bad and fraudulant Sellers/buyers. The company listing at http://www.newzealandnz.co.nz/Business_Economy/Auctions/ has some of this information available. The website www.scambusters.co.nz is an independent site of proclaimed watchers of fraud on Trade Me. The group is made up of amateur online members, and while they proclaim to be a site where fraud on Trade Me can be reported, they have no affiliation to Trade Me, and therefore no access to information or help that potential victims would need. The need for this forum would become quite unnesassary 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 Trade Me create many more problems than they solve. 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 have always specified its restriction of membership to persons over eighteen years of age, as users under the age of eighteen can not negotiate a legally binding contract. However, 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 , Fair Go - Episode 14 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 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 Yet , Trade Me regularly removes members who it finds have provided false details of age. Clashes with software developers Various third-party software-developers have received threats after developing software which interfaces with the TradeMe website. On August 19 , 2006 the '' New Zealand Listener '' published an article, "Bidding War" ''The New Zealand Listener '' - "Bidding War" on one such developer. Ciaran Riddell developed a piece of software, AuctionBar , which allows 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 requires an XML Feed , this 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. NOTABLE AUCTIONS
TradeMe Auction 36725938
TradeMe Auction 52360702 The opening price stood at NZ$200,000,000. TradeMe withdrew the auction after 231,908 page-views.
TradeMe Auction 58555525 See Also: 2006 rugby union handbag controversy
TradeMe Auction 59664487 The winning bid of $4,010 later proved not genuine Bikini bid 'a hoax' Note: TradeMe recently changed its policy such that Q&A sections can no longer be viewed on past auctions, this was later reverted after complaints from members however withdrawn auctions no longer become viewable again after 60 days. REFERENCES FURTHER READING
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