Poachers out to get Trade Me's big sellers

A new online auction website is aiming to poach market leader Trade Me's biggest sellers.

Zillion.co.nz, launched this week, has the backing of some high-profile Trade Me's sellers. The site, launched by Auckland-based internet entrepreneurs Dylan Bland and Simon Barton, wants to entice professional traders away from Trade Me - promising them automated tools to take the repetitive work out of listing large numbers of auctions.

But the zillion-dollar question is whether the site will transform initial interest into a viable business to challenge Trade Me's, which has a quarter of New Zealand's population as registered customers.

Zillion is not the first attempt to crack Trade Me's dominance of the market. Trade Me founder Sam Morgan says he can list at least 15 competitors - none of which is even one-tenth of the size.

"We have 1.9 million unique browsers per month. The next largest buy/sell site - traderpoint.co.nz - has 146,000," he says.

However, Bland and Barton are the brains behind three successful websites: nzflatmates.co.nz, gameplanet.co.nz and gpstore.go.nz, which between them have more than 100,000 users to market to. They are targeting heavy users of Trade Me.

"Zillion is built for professional traders, a group of people that is growing at a rate that even Trade Me estimates at being approximately 400 per cent per year," Bland says.

Unlike other potential rivals to Trade Me, Zillion launched with more than 10,000 listings and has focused on those pro traders.

"Zillion doesn't need a lot of sellers," Bland says. "[Its] focus on professional traders, who deal in a large volume of listings, means that our business model does not require a large number of individual sellers to be successful."

It does require buyers, as Morgan points out: "The key number to understand is the number of successful sales. Sellers get the best prices in the most active marketplace ... On Trade Me we have 65,000 items with bids, versus 200 or so on Zillion."

He says every other international market has one big player, followed by a number of smaller players.

"They [the big players] typically have 90-per-cent-plus market share, as we do in NZ."

Zillion will need to be compellingly different if it's going to make its mark, says Alan Clifford of IT consultancy Jadoube.

"[A new auction site] would need saturation coverage and deep pockets to make a big impact.

"Then the user experience of the site has to be a good one."

Tracey MacKenzie - co-founder of Auctionitis - third-party software designed to make uploading auctions to Trade Me easier, says the incumbent needs competition to meter its power in the marketplace.

MacKenzie, who has sold more than 10,000 items of jewellery, CDs and records over Trade Me and eBay, says the new site, which she has tried, had automated tools, which made listing far quicker for the semi-professional trader such as herself.

"So far I am not selling as much on Zillion as I am on Trade Me, but the tools [on Zillion] are allowing me to list quite a lot more easily."

MacKenzie and her partner Evan Harris are taking a wait-and-see attitude before they provide versions of Auctionitis and their other auction software JAFA (Just Another Feedback Automater) and MailMate for Zillion customers.

"Zillion do have a number of seller tools [parked listings] that help sellers manage their listings, but at the end of the day for busy sellers the ability to prepare all their auctions without waiting for five different page loads to prepare an auction can only be achieved through Auctionitis," MacKenzie says.

"We have been approached by a number of other sites to do an Auctionitis for their site, but their numbers simply haven't warranted it."

Nigel Horrocks, editor of NetGuide magazine, says it will be difficult for Zillion to lure away large numbers of members who have already built up good rating records on Trade Me.

"However, the new site is backed by people who are very smart. They understand about community and the need to provide extremely good service and they have to be considered serious players."

He says there are Kiwis who trade successfully on both Trade Me here and eBay.

"So there is already proof that there can be two reasonably-sized players. To be successful, Zillion would need to expand its listings rapidly, or buyers would take a look and go away."