Trade Me raises sale fees 5.3pc

TOM PULLAR-STRECKER
Last updated 05:00 26/09/2012
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PRICE HIKE: Trade Me is raising the success fee members pay.

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Trade Me will raise the "success fees" members pay to sell most items through its online marketplace by more than 5 per cent on Monday.

The announcement of the pending hike was met with a mixture of indignation and resignation on the company's community bulletin board.

Last month Trade Me reported an 8.4 per cent jump in its annual profit to $75.6 million. One member described the price rise as "greedy", placing the company in the same category as "councils, power companies, water companies, supermarkets, petrol companies and so many more".

Others said rival free auction sites were no real alternative because they lacked a critical mass of buyers. Some said they were having success selling items through Facebook, but one poster forecast nothing would change.

"People will moan for a while and will suggest the sky is falling in. Others will suggest going to ‘X site' or ‘Y site' instead and a few will try. Ultimately, all will find that selling through here is still the easiest way to go because the buyers are here."

Trade Me said the fee for selling an item valued at $50 - about its average trade - would rise from $3.75 to $3.95, an increase of 5.3 per cent.

The highest rise would be for items priced at $1500, for which success fees will increase by 8.1 per cent to $79.50. There will be lower increases on higher-priced items and no change to the maximum $149 success fee.

The changes will not apply to cars sold through its motoring section.

Marketplace head Craig Jordan said Trade Me had not increased its success fees on general items since February last year, 20 months ago.

"We took a long look at the value we were delivering to our sellers and we arrived at a price where we thought we were delivering good value for money."

Traffic to Trade Me's site had grown 18 per cent over the past year, Jordan said, which was in part due to the investment it had made in new mobile apps and interfaces designed to make the site more smartphone-friendly.

Forsyth Barr analyst Rob Mercer said Trade Me probably considered it was undercharging for low-value transactions and he doubted the fee rise would dissuade traders.

Real-time banking, which meant traders got paid faster, and efficiencies and consolidation in the courier industry could make it easier to trade, offsetting any impact.

BRINGING TRADE ME INTO THE 21ST CENTURY

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Trade Me is testing a new homepage design with a subset of its members to get their feedback.

Proposed changes include making it easier for visitors to click through to its motors, jobs and property sites.

The company said more than one in 10 visitors headed straight to these sections and the subtle redesign was done to bring the site into the 21st century and set it up for "more exciting changes to come".

Trade Me has said it sees the greatest growth potential in helping retailers sell new goods through its site.

Links to members' watchlists, "Favourites" and "My Trade Me" are now included on every page. Another new feature is a list of "handy links" at the bottom of each page.

The new design drew hundreds of comments from the randomly chosen triallists. More controversial changes included relegating Trade Me's auction clock to the bottom of each page and doing away with "Help" and "Home" buttons.

- BusinessDay.co.nz

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