Trade Me's secret: numbers

David Owen got hooked on Trade Me soon after he arrived from England in 2004, when he bought a fencing kit - mask, foils, jacket, gloves, breeches - for $75.

"That was a definite bargain."

The Whangarei man gave up using e-Bay and decided Trade Me was his happy place. He had not even bothered to check any rivals.

But other online auction sites have been hoping to attract buyers such as Mr Owen, in an apparently futile bid to take on Trade Me at its own game.

So far none have been able to make a dent because they lack the most important thing - numbers, says David Farrar, vice-president of Internet NZ.

"Quality and ease of use is important, but numbers of customers is most important. Dating sites have similar motivations. If you are looking for a date you are more likely to be successful on a site with 10,000 listings than 1000."

MediaCom's Michael Carney agrees. "Once you get to a certain point, it's very difficult for anybody to start up and compete within the same playground. You have to invent something totally new to attract people for different reasons."

Online auction house zillion.co.nz started last July. "It has been hard," co-founder Dylan Bland said. "It's always tough going up against something like Trade Me. We view Trade Me as a big mall and we are setting up a small mall right next to them. Trade Me's only advantage is they have been around for seven years. We think the landscape will look quite different in five years' time."

Oneway.co.nz has been running for 4 1/2 years and has had slow growth.

Founder Brett Waterson said Trade Me managed to bury e-Bay because it was "home-grown and [about] the small-town guy trying to make it".

"That's what attracted people to it. So it will be interesting to see what happens now it's not such a nice story any more."

Mid-afternoon: the traffic

Trade Me: 40,494 people browsing and 645,829 items for sale. 1.2 million users.

OneWay: 3138 people browsing and 252,932 items for sale. 35,948 listed items. 50,000 members, according to owner.

Zillion: No on-site tally of browsers. Claims to have 13,500 members.

Listings as numbered on buying page: 13,247

Strangest buy: On zillion.co.nz: A "rotting goat's head", made of resin, stretched out on parchment, for $130: "On the less rotted side the eyeball protrudes and looks about to pop out. A horn sticks out from the head and nasty pointed teeth erupt from the mouth."

How the rivals stack up

The Herald asked an internet guru, a website analyst and a frequent Trade Me user for their impressions of how two of the rivals stack up. Their verdicts:

Miriam Walker, a business analyst and information architect at website design company Shift:

Zillion would have stood a good chance if only it had been first on the market. It was similar in layout and features to Trade Me, it was easier for sellers and had a big set of listings from the start.

It was also cheaper than Trade Me, and the buying process was streamlined.

However, while some big sellers might have gone there, the buyers were yet to follow.

"On the day I looked, only seven of the 1443 items in the home and garden section had any bids. Is this because Zillion lacks the variety of special, cheap, bargain or rare products that make buyers passionate about Trade Me?

OneWay's homepage was clean but crowded, and the range of goods appeared poor at first glance, which would put buyers off.

"While strong in niche categories like stamps and collectibles, OneWay clearly has fewer items to satisfy typical New Zealand passions like sports and home renovation."

Trade Me was unlikely to be worried about its rivals. "Zillion and Oneway demonstrate that even with feature enhancements and incentives, competitors face a huge challenge if they are to overcome Trade Me's significant headstart."

David Farrar, vice-president of the Internet NZ:

OneWay's innovative techniques, including commissions for introducing new members and the "items wanted" listings stand out.

However, a lot of OneWay's listings are in British pounds.

Zillion is more impressive.

"Zillion has the cheapest fees around, but from my observations most sellers are not concerned over the fee level as long as its not a rip-off.

"What they most value is getting to the largest number of buyers so the auction price is most likely to be higher than elsewhere."

Casual user David Owen:

Most impressed with Zillion and will add it to his favourites.

He likes the set-up and the fact that it is cheaper.

"Zilllion is superb. There were a load of fencing stamps on there. I thought, 'My God, I want them all.'

"It doesn't have the range of products and traders that Trade Me has, as yet, but the way this site has been set up appeals to me. $700 million for Trade Me? I'd have taken a gamble on this baby for a fraction of the price and waited. It will grow and I'll be back."