Online auction site Sella buys zillion

Online auction site Sella.co.nz is preparing to up the ante against much larger competitor Trade Me in a bid to increase its stake in the internet auction market.

The site today announced it had purchased internet auction site zillion.co.nz as it moves to acquire new business.

The purchase will see membership jump by 95,000 to 255,000 members, while listings will increase 40,000 to 235,000, creating a much bigger player in the marketplace.

The owners of sella.co.nz, which is a joint venture between Herald publisher APN News & Media and entrepreneur Shane Bradley, wouldn't discuss the purchase price which they deemed commercially sensitive.

However Bradley said he had an aggressive marketing plan in place to see the business become a "solid number two in the internet auction marketplace" in New Zealand in the next couple of years.

Bradley said the site was currently adding more than 2500 members a week, and he expected the biggest growth to come towards to the end of this year and in the first half of next year.

Bradley said Sella's growth was healthy in a market which had been dominated by one player for so long.

"We respect Trade Me as a business but feel there is a difference between making a fair amount of money and an obscene amount of money," he said.

Basic economic theory suggests companies with a monopoly charged the highest price they could, he said.

Competition resulted in lower price, better features and improved customer service.

Sella.co.nz has no commission structure with its revenue stream - aside a small percentage of featured listings - coming from advertising.

"People say to me why should we invest in this I say to them 'ask Vodafone how they took on Telecom'."

Bradley said there was increasing scope for internet auction sites who traded without fees, to become much bigger players in the marketplace.

Around the world paid sites were being overtaken by those with no commission structure, he said.

"If we make a good product people will find it," he said.

- NZ HERALD STAFF