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Trade Me tweaks real estate listing offerings to keep agents onsite

Trade Me [NZX: TME] has added a monthly listing subscription fee option for realtors after some agents baulked at the online auction site's move to pay-per-listing fees.

The $1,399 monthly subscription offer for Auckland, Wellington and Christchurch-based listings, and $999 for elsewhere, comes after some real estate agents boycotted the Wellington-based company's move to a $159 pay-per-listing charge last year. Businesses which stick with the pay-per-listing model will only pay $99 if the house is valued below $450,000.

"We've taken on board feedback that different markets are at play across the country, and affordability from vendors and real estate businesses varies," Nigel Jeffries, head of Trade Me property said in a statement. "We acknowledge that the pay-per-listing model we rolled out last year works well for some business owners, but it does not work for everybody."

Last year Trade Me's classified advertising segment, which includes property, motors and jobs advertisements, posted 29 percent sales growth to $69.7 million, making it the biggest source of operating income for the company. ​

Property is seen as a key growth engine for the website's classified advertising business, as it faces flat revenues in general auctions business. The company estimates it has a 15 percent, or $18 million, share of the $115 million property-for-sale classified advertising market in New Zealand.

According to Trade Me data, gathered by Perceptive Research, 68 percent of house hunters use the auction site, 6 percent use realestate.co.nz and 4 percent use newspapers.

Shares of Trade Me fell 2 percent to $3.45 and have declined 13 percent this year. The stock is rated an average of 'hold' according to 10 analysts surveyed by Reuters, with a median price target of $3.93.

(BusinessDesk)

Comments and questions
10

Be interesting to see if Trade Me can reverse the decline in property listings.

Realestate.co.nz (RCN) has been growing very strongly and it's clear Trade Me is now panicking.

Once another site takes hold - it is very difficult to reverse the trend. RCN clearly has in this case as property buyers have been told by agents to look at the greater range of listing at RCN where number of listings now comfortably exceed that of Trade Me.

A good lesson to learn about abusing a strong market position.

When we listed our property recently the agent tried to counsel us away from the Trademe listing which we resisted strongly, amazing how quickly the agent backed down when they saw the listing disappearing.

If sellers simply said to the agent prior to signing an agreement that they wanted a Trademe listing at the agents cost as well as other sites then they the best of both worlds.

Why bother? Buyers now are viewing listings more on realestate.co.nz than trademe, based on listing numbers per comment #4 below.

This Emperor really has not Clothes

Trade Me has no growth, no earnings moat and its just waiting to drop

Why the built a massive HQ is beyond reason - outsourcing and offshoring is the future

With the Old Print Paper Fairfax leaders on the Board, shareholders have little hope here

In my opinion Trade Me were ill prepared for the implementation of the original price move last year - they had not really established an adequate relationship with their real customers - not the CEO's of the 6 large franchise groups but the 600+ business owners of local real estate offices around the country who operating under the brand franchise of the one of the big 6 or as an independent.

Trade Me has learnt a valuable lesson of realising who its real customers are and are taking significant steps to re-address this situation of which this new revised pricing model is a part.

This move puts them back to where they were this time last year from a financial perspective - the industry has won a significant short term battle but the war will be won by Trade Me at the end of the day.

I will be writing a summary of this issue and my views on it which will be published here on the NBR over the weekend and on Properazzi.

Trade Me has lost the battle and if it thinks the repricing will win the war, it is too late.

Trade Me stubbornly believed it will not lose the battle - it took numbers so glaringly alarming that its directors and management could not ignore any further before accepting the inevitable - repricing its property listings.

For example, as of yesterday, realestate.co.nz has 9,359 listings in Auckland and 5,142 in Canterbury - vs Trade Me 8,415 in Auckland and 4,480 in Canterbury.

Why would the industry and for that matter, property buyers return to Trade Me when it is clear the other site now offers a better service?

I've been a top seller on TM now for sometime now, and I've previously told them how how to tweak their site, and increase their sales by estimated 25% + and I'd also be happy to pay double the substantial fees I already pay them.. Its been highly appararent to me for sometime, that those who are supposedly running TM, have absolutely no idea about running a business, marketing, how the consumer mind works, but more importantly, listening to their customers like me. Unbelievable.

The real estate industry will never surrender control of their industry to a third party again because as soon as trademe thought they had control they whacked their fees up. In our case it was a 700% increase. Their research does not match my own data from surveys which clearly shows realestate.co.nz has closed the gap.

Amazing how we all suddenly like real estate agents again. Right up there with politicians.

Trade me cant be trusted full stop. If the RE industry gives in to them and signs short term contracts of a year, then they are only going to increase prices again in 2015. RE agents- don't sign any contracts unless they are for at least five years. Preferably ten. Just say NO.

Otherwise you will be paying $1000 plus just to get a listing on their website. Don't laugh, its happening overseas in Australia already. Costs $3000 for an auction listing.
Competition is the only thing keeping prices down right now. Trade me don't care about RE agents,don't be fooled by the presents and the kind words, they want to make more money out of selling houses than RE agents.