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Beyond auctions - Trade Me's Amazon.com-style e-tail ambitions

40% of sales on Trade Me were now goods, says CEO Jon Macdonald.

They range from those sold by thousands of small commercial sellers to larger partners such as The Warehouse, Glassons and Hallensteins - all of whom are part of the new "Stores Extra" section for larger retailers that was soft-launched this week.

Earlier, Mr Macdonald told NBR that Trade Me does not wanted to be an Amazon.com. It sees retailers themselves, or aggregator services, handling order fulfillment. It still doesn't want to do any warehousing, but it will now get involved in the rest of the process. To that end Trade Me said today it had bought local company TradeVine, which provides logistical and marketing support for online sellers. TradeVine first partnered with Trade Me back in May, joining the high-profile international service Channel Advisor).

The company aims to increase this percentage - following the lead of eBay in the US - but is taking a steady-as-she-goes approach.

All the necessary infrastructure won't be in place until the first half of next year, and deals were still being negotiated.

Another issue is that Mr Macdonald doesn't want to upset the Trade Me community by suddenly accelerating the amount of new goods retailed through the site.

All up, it means Trade Me would no go out all-guns-blazing as a new-goods e-tailer until Christmas 2013.

Macdonald says Trade Me hopes to use Channel Advisor to lure Australian retailers, and those from further afield.

The logic is that if an Aussie retailer wants to reach New Zealand customers, it's cheaper for them to do it through Trade Me (with Channel Advisor handling the logistics) than setting up their own operation.

Macdonald's deliverd that line before.

But now there's a new twist: he also sees e-commerce sites using Trade Me to reach New Zealand-based buyers.

Most New Zealanders are only aware of a handful of direct sales sites, Macdonald says - your Amazon.coms and your Dells.

But there are thousands of other e-tail sites out there.

Some buy Google Ad words to reach the New Zealand market. Macdonald's spin is that it would be cheaper for them to take a store window inside Trade Me, where a mass audience is ready and waiting.

We're talking a softly-softly approach here. 

Macdonald doesn't see Stores Extra making a meaningful contribution to Trade Me's bottom line until the second half of next year. 

And certainly there's been a muted response from investors today, with Trade Me shares [NZX:TME] closing down 1.76% to $3.90.

But for the site most of us still associate with amateur auctions, a quiet revolution is underway.

More by Chris Keall

Comments and questions
1

Way the go trademe. Keep copying amazon.com, ya uninventive entity.