Regulations which the organisation believe need to be implemented include mandatory microchipping for dogs sold online and a requirement for vet paperwork to be presented to buyers before sale.
"Puppy Milling goes on every day in New Zealand. It is the breeding of suffering and misery, all for the sake of profit," Paw Justice co-founder Craig Dunn said.
"We have seen case after case of animals being bred purely for profit, with no one taking responsibility for their wellbeing. We need sites like Trade Me to play a role in regulating this industry," he said.
TradeMe said it had already consulted SAFE and the SPCA over "a code of responsible breeding" it was developing.
"Some of the concerns outlined by Paw Justice could be covered in that code," TradeMe head of trust and safety Jon Duffy said.
"For example, microchipping, minimum age for animals, and a requirement to have paper work for animals where appropriate, are all being considered."
The company hoped to have a draft of the code available for members in "coming weeks", Mr Duffy said.
Paw Justice: proposed regulations for anyone wanting to breed and sell dogs online
1. Every dog sold online must be microchipped, the microchip number must be entered before the advertisement can be listed
2. If the dog is listed before they are three months old, its mother's microchip number must be entered before the ad can be listed.
3. Only one litter of puppies can be listed under each breeding dog's microchip number every second year, with a total of three litters per dog.
4. The breeding dog must be between the ages of two and six years.
5. A full trading history showing all animals bought and sold as well as feedback from buyers should be visible for every trader.
6. Buyers must be shown vet paperwork and be able to view the breeding facilities before buying their puppy. This will be enforced by the buyer who has the right to refuse to complete the contract for sale until the seller has complied with the rules.
