Trade Me fee change sparks angry response from retailers

Trade Me says the move will encourage more of site's 19,000 professional retailers to provide buyers with free shipping and transparent prices. Picture / NZME

Plans by Trade Me to change its success fee model to include shipping costs has sparked an angry response from some retailers on the auction site.

The change means that from March 14 success fees for professional retailers will apply to both the item sale price and the shipping cost. The change did not affect casual sellers, who would continue to pay success fees only on the item sale price.

Trade Me Marketplace's Rick Davies said the move would encourage more of Trade Me's 19,000 professional retailers to provide buyers with free shipping and transparent prices.

"Buyers have told us high shipping costs are their number one annoyance when buying on Trade Me, especially when purchasing a new item. We want to provide a world-class shopping experience," Davies said.

"The expectations of Kiwis shopping online have soared in the past few years and we don't want our professional retailers lagging behind. Things like fast, free, tracked shipping and no delivery fee surprises at checkout are table stakes in 2018."

However, one retailer who emailed the Herald said he had asked the Commerce Commission to investigate.

He had responded to Trade Me, telling them the plan to charge on a seller's costs was "outrageous" and the rationalisation that buyers loved free shipping was "completely ridiculous".

"They'd love sellers to make everything we are trying to sell free. The problem with that is that sellers - and you [Trade Me] - would swiftly go broke. I'm furious about this but I can't imagine that you're going to revisit this appalling decision so I will take the matter up with the Commerce Commission."

Another retailer said they would run at a loss if they offered free shipping, and that to add it to the product would make goods appear more expensive than those of a competitor.

Davies said there were no legal concerns about the change.

"Yes, we've had some sellers who have said they are disappointed with the change and we've had to clarify a few things for them. However, we believe this is the right thing to do for buyers and sellers."

Professional retailers, also known as '​in-trade​' sellers, comprised about 3 per cent of sellers on Trade Me.

New Zealand-based professional retailers who provided free and fast shipping to buyers would be entitled to a 10 per cent rebate on their success fees from March 14.

"We want to help Kiwi sellers stay competitive within the global ecommerce market and provide them with an additional incentive to provide free shipping," Davies said.

"In terms of any revenue upside, it's really hard to say. We need to see how sellers and buyers adapt to the change, and uptake of the rebate. It could be zero," he said.

"To be clear, our motivation is to encourage sellers to provide buyers with transparent pricing and great shipping. We want buyers to buy more, and sellers to sell more."

Davies said he expected the number of new items on Trade Me with free shipping to increase.

"More than a million items on Trade Me already include free shipping – it's a good start, but with our new goods range of almost 4 million items and growing every day, we want to see the proportion with free shipping increase rapidly over the next 12 months."

The change would deter 'shipping shock' at checkout, Trade Me said.

"We see some opportunistic sellers reducing their item prices, then loading up the shipping fees which freaks buyers out when they come to pay," Davies said. "We want our marketplace to be easy and transparent for buyers and we also expect sellers to sell more when buyers know what they're paying upfront."