TradeMe & Online Auction Sites

Courtesy of My Generation.

If you think TradeMe and the other on-line auction sites are where people sell their old washing machines and handbags, you’re partly right. But as well as those who just list the occasional fashion disaster, there are plenty of people making their living from it. GILL SOUTH investigates.

Next time you find a tasty item on TradeMe that you can’t live without, take a look at the seller’s other listings. It’s quite likely you’ll find he or she has hundreds, if not thousands, of items for sale, from pre-loved leather jackets to books to crockery to brand new designer T shirts.

That’s because the on-line auction sites have become home to numerous people who use them as a shop front for businesses new and used goods.

Michael Carney, author of Trade Me Success Secrets, a book of information for newbie traders, says the people who do this range from those operating on a very small scale, right up to companies doing it in a big way, such as Barginsdirect.co.nz.  

Some traders are happy to trawl the second hand shops, school fairs and garage sales, buying and then reselling hand-picked items on which they’re confident they can make a profit. Others find they can't get to the size they want if they rely on the second hand market, so they are sourcing direct from manufacturers and wholesalers. Now 40 per cent of the items sold on Trade Me are brand new.

“For those who do sell in a big way, it's pretty labour intensive, and you've got to start employing people and buying software,” says Carney. “And you have to have a broad range of products to sell.”  

The serious traders range from school boy wonders using their parents' account to those who are 60 plus, and the beauty of it is, your customers don’t know at which end of the scale you are.

As Carney says, no one cares that you are grey-haired, as long as  you provide stuff that is sufficiently unique to attract customers. “Whether it's the product or the way you describe it, people will buy from you,”  he says.

Having a way with words can take you a long way on the auction website, says Carney.

Many people will remember one seller who managed to whip up a frenzy of interest in his 1980s vintage Fisher and Paykel washing machine with his clever story telling skills. He called it the Scary Washing Machine and claimed it had sucked up his  wife. The story got thousands of views on the auction site and, unsurprisingly, met its reserve price. There have also been those who have gained attention by listing small items and selling them with a free house, or car, or farm.

Auckland-based trader Allison Doody gave up her job five years ago to specialise in plus-sized women's clothing. She started like anyone else, just selling the surplus items she had in her wardrobe, and was so impressed with the profits she could make, she did more.

She went to Farmers, bought ten $5 tops and managed to turn that $50 into $200. It was better than going to the casino.

Doody, known as Dartagnan on the auction site, had found a lucrative niche market. Some buyers were women who didn't live in towns which sold clothes for larger women.

She tried buying some clothes in bulk from eBay, but found the customs duty was quite punishing. So she hooked up with two suppliers in New Zealand and began visiting trade-only gift fairs. However, she warns, a lot of people will not sell to you if you are just going to sell it on Trade Me. Many require a certain size order.

And another warning from the seasoned seller is about tax. As soon as you start buying something to sell as opposed to finding something lying around your house, you need to think about your tax situation, she says.

“It's very important that if you are going to do it to make money then you need to get your tax affairs in order. If you are lazy about this, other traders may well report you.”  

She knows three traders who were caught out by the IRD, with serious results.  

Allison learnt some key things early on: learn to take a good photo and make sure you've got the background right, and (this is a big one) write an honest description. If it has a scratch on it, say so.

While many traders enjoy doing the rounds of charity shops and school fairs and then selling on an auction site, Doody isn't a fan. “It was too hard for me, I could not find the stuff that I needed. When I left my job, I realised I needed to have a good amount of stock on hand otherwise I'd be back on the job market.”

“The other thing with buying new is that you can by more than one, so when it sells you don't need to take a photo again, you've got 20 of them. Selling second hand items creates a lot more work, in my opinion.”

And with 250 to 300 items selling at any one time, keeping the workload manageable is important.

Allison says it’s probably the best job she’s had, but admits the recession has taken its toll on her business.

“People are buying less and they want to pay less, and there's more competition. Jeans that were selling for $75, I am now lucky to get $25 for.”

But it’s an addictive business, she says. “There are a lot of emails to answer, and it's a nice feeling when your auction has closed and and it's met the reserve. You never get sick of that.”

She does, however, get horribly upset about negative feedback, despite having over 1000 positives comments, four negative and seven neutrals.

You can negotiate successfully out of these situations, she says. These days she sends a letter with the goods she’s sold, asking the buyer to contact her if there is a problem, rather than placing negative feedback.

And although much of the world revolves around the computer, Allison has made some real friends in the Trade Me community. She came across Tracey MacKenzie on a Trade Me message board, bought some jewellery from her and they ended up meeting regularly for lunch and even going into business together.

Tracey, whose Trade Me name is TopRank, has several businesses. Her husband Evan Harris has invented Auctionitis, a desktop software package which helps Trade Me sellers load their item information off line. It's ideal for older traders or those less familiar with computers, enabling them to take their time creating their listings. Trade Me pages will ‘time out’ after about 20 minutes and you will lose your data/typed info.

The mother of a teenage boy, she started on eBay in 1999 selling LPs to people overseas who wanted to buy them because they are made in NZ.

Then she started importing costume jewellery, followed by gold and diamond rings for Trade Me. She had discovered a broad market - buyers of costume jewellery vary from grandmothers to young girls.

Like most experienced traders, Tracey knew when to get out. “Jewellery became quite competitive, other people drove the prices down too low, so I moved into selling home and giftware, from New Zealand gift fairs.”  She also sold a range of Hello Dolly tools – the only person to sell them on Trade Me.

This year, with three different businesses, she thinks her Trade Me profits are probably contributing a quarter of her total income. June until August are always very quiet, she says, but December and January are usually very busy.

“A lot of people do this as a part time thing, and that's the way to go,” she says.  “If you are starting out, don’t rush into spending $10,000 on a whole lot of stuff and then realise you don't actually like selling.”  

It's been a very social experience for Tracey. She and Allison Doody organise regular lunches. “Allison and I will invite who we know - traders and buyers – you'll get people from 20 to 70 coming along.”

“There are people in their suits and ties who are absolutely  loaded, and those who are  the complete opposite. Trade Me is quite big in the Chinese and Asian community, she says, and that’s been useful in that she has met young Asian men at university who have good contacts in China for goods.

For Marie Williams, selling on the auction site has been another way to sell alongside her second hand shop, Bookwormz, in Old Papatoetoe. While her shop specialises in science fiction and romance, she sells exclusively romance online and the response has been well worthwhile . “Mainstream shops don't do romance. There's a very poor selection,” she says. “Yet the demand for romance fiction is very strong at the moment – especially paranormal romances with vampires.”

Marie has a mix of used and new books and has just opened an account with a distributor in the States. She gets her used books from book fairs around the country run by organisations like Rotary and Lions. She sees many Trade Me traders at the fairs and they are all looking for something different, she says. Her Trade Me business is now about 25 per cent of her total, and she says if it were a toss up between the two, she’d stick with Trade Me.

“It's very transparent,” she say. “If you are having problems with a  sale, everybody knows, you've got to be on your toes when operating on Trade Me.  You can't afford to treat somebody badly.

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