Trade Me will raise the “success fees” members pay to sell most items through its online marketplace by more than 5 per cent on Monday.
The announcement of the pending hike was met with a mixture of indignation and resignation on the company’s community bulletin board.
Last month Trade Me reported an 8.4 per cent jump in its annual profit to $75.6 million. One member described the price rise as “greedy”, placing the company in the same category as “councils, power companies, water companies, supermarkets, petrol companies and so many more”.
Others said rival free auction sites were no real alternative because they lacked a critical mass of buyers. Some said they were having success selling items through Facebook, but one poster forecast nothing would change.
“People will moan for a while and will suggest the sky is falling in. Others will suggest going to ‘X site’ or ‘Y site’ instead and a few will try. Ultimately, all will find that selling through here is still the easiest way to go because the buyers are here.”
Trade Me said the fee for selling an item valued at $50 – about its average trade – would rise from $3.75 to $3.95, an increase of 5.3 per cent.
The highest rise would be for items priced at $1500, for which success fees will increase by 8.1 per cent to $79.50. There will be lower increases on higher-priced items and no change to the maximum $149 success fee.
The current fees are:
- 7.5% up to $200, going to 7.9%
- 4.5% from $200 to $1,500, going to 4.9%
- 1.9% from $1,500 to $5,500, no change
At $5,500 you reach the maximum fee of $149. After the increase you’ll reach it at $5,150.
So the fee for various price levels is
- $50 – $3.75, 7.5%, changing to $3.95, 7.9%
- $100 – $7.50, 7.5%, changing to $7.90, 7.9%
- $250 – $17.25, 6.9%, changing to $18.25, 7.3%
- $1,000 – $51.00, 5.1%, changing to $55.00, 5.5%
- $2,500 – $92.50, 3.7%, changing to $98.50, 3.9%
They’re pretty significant increases, as in my opinion the business model should be based on increasing volume of trades, not the percentage fee per trade.
What I’d be interested in is what have the fee changes over time been? Does anyone have data on what the fees were before it was sold in 2006?