Trade Me wants automatic access to police records on gun owners to prevent firearms from falling into the wrong hands.
In an appearance before a committee at Parliament today, the company defended the sale of guns on its website after an MP suggested it stop selling weapons altogether.
A Parliamentary inquiry is looking at how to restrict the flow of firearms to criminals, gangs and unlicensed people.
It was launched in March after a series of high-profile shootings and weapons seizures, including a 22-hour siege in Kawerau in which four policemen were shot and wounded.
Around 8000 rifles and shotguns are sold on Trade Me's online marketplace each year.
Its legal and regulatory head, Marissa Flowerday, told the committee that customers already had to provide their licence numbers when buying a gun on the site.
"Because there isn't a way of verifying that the firearms licence is valid, we'd like to bolster our security measures further by having a real-time access to the police firearms licence register."
Any approved retailers should be able to access the database, she said.
The arrangement would not be unusual - the New Zealand Transport Agency already provides a similar service for driver checks.
It would also be low-cost, because a detailed database already exists and the police had a close relationship with Trade Me.
The inquiry is trying to find out how widespread firearm possession is among criminals and gangs.
Flowerday suggested a new database that listed the serial numbers for every gun in the country and linked them to their owners.
Such a measure would help to prevent unlicensed people from acquiring guns, she said.
Labour MP Stuart Nash asked why Trade Me did not stop selling guns altogether.
He said it would not be a significant change because gun sales made up roughly 0.0003 per cent of the website's 281 million annual transactions.
"Given the concerns that you yourself have, given the concerns that police have, wouldn't it just be easier to say 'we're not going to allow our guns to be traded on Trade Me and we'll leave this to the gun dealers and the experts'?"
But Flowerday said gun trading on the website was highly transparent because customers' trading histories were recorded.
"Given that it is legal, and that there is a desire for people, particularly in the hunting and sporting environment to trade these firearms, then we see this as a reason to maintain it."
The website already banned the sale of some items on moral grounds, including Nazi memorabilia and ivory.
Trade Me's trust and safety head, Jon Duffy, said the website banned ivory sales because creating demand for the product encouraged poaching, which is illegal.
The same argument could not be made for guns, he said.