The local "online trading community" Trade Me has launched Trade Me Merchant, a business to consumer auction service.
Trade Me Merchant provides businesses with the ability to conduct auctions to sell to the nearly 2000 registered Trade Me buyers. Businesses may also sell exclusively to their own clients through the service.
Trade Me's member base is dwarfed by that of the large online auction hours in the US, which can run into millions, but managing director Sam Morgan points out that "there are not many auctions held each day with 2000 bidders on the floor. Traditional auction houses will struggle to compete with an alternative that costs so much less, and is so much easier."
Morgan says he expects to have 20,000 buyers online within 12 months - making his site a very cost-effective option for businesses.
"Internet auctions are particularly valuable to businesses selling goods where the price that the market will tolerate is unknown," Morgan says. "The value of an ex-rental computer is a prime example - publish the wrong price and it won't sell. You then watch as the value of that PC decreases with each passing day, making the price you set more and more unrealistic."
"Trade Me Merchant offers businesses a low cost-of-sale and an excellent way to increase their sales. The commissions of Trade Me Merchant are only a fraction of brick-and-mortar auctions. If items don't sell, no fees are incurred."
Morgan says other potential uses of Trade Me Merchant include the ability for companies to sell perishable goods and services - anything from vegetables to advertising.
"Advertising is an example of a product that has a value which decreases to zero once the magazine prints, or the web page has been shown without a banner ad." Morgan says. "Trade Me provides businesses with an alternative to fixed pricing models, allowing businesses to increase sales by letting the market determine the price or such goods. Auctions can be open to the general public, or exclusively to a businesses own clients - providing the auctions as a value added service for selling surplus product.
Trade Me Merchant is free for merchants that register in the next month for the live pilot phase. It is self-service - merchants place their own listings, and are responsible for completing the transaction with the winning bidder once the auction has been completed. Auctions run for one, three or seven day periods.
Trade Me can be found at http://www.trademe.co.nz