New auction website Wheedle will shut down indefinitely after having a hole in its security systems pointed out online.
The online marketplace has been plagued with problems since it launched yesterday and was "down for maintenance" for part of this morning.
Its managing director Carl Rees this afternoon announced the site will close while a "comprehensive audit" is carried out on its systems.
The shutdown comes after technology blogger Ben Gracewood tweeted instructions on how to change reserve prices on other people's Wheedle auctions.
It was even possible for a person who did not set up an auction to set a "buy now" price.
Mr Rees said Wheedle would not go back online until management were confident it would be reliable for customers.
"We will return to the market when we are totally satisfied that the site will provide the high level of experience we want our customers to enjoy."
Mr Rees earlier said the site was taken offline after the company identified issues with the "back-end coding".
"You can do all the pretesting in a controlled environment and a virtual environment but when you go to market, things happen," Rees said.
"Our tech people have been busy fixing that overnight and we've brought the site down and we would be back up and running by 11 o'clock [this morning]," he said.
When the Herald checked at 10.45am, it was back online.
Wheedle - backed by Mainfreight co-founder Neil Graham - went live yesterday morning but commentators did not believe it would present much of a rival to market giant, Trade Me.
The service claims its point-of-difference is price and charges a flat rate for selling goods rather than a percentage fee like Trade Me.
"We're trying to open up a newer market where people want to save money and perhaps they've been too scared to go onto Trade Me because of the prices, well here's an opportunity to come onto Wheedle," Rees said.
But Dylan Bland - co-founder of the online marketplace Zillion which was sold to auction website Sella in 2010 - said that sites like Wheedle "stand no chance of disrupting Trade Me's monopoly position in New Zealand".
"The reason that incumbent auction players like Trade Me and eBay have remained dominant for over a decade is because buyers prefer to shop on the site with the greatest number of items for sale, and sellers prefer to sell their items on the website with the greatest number of buyers," Bland said in a blog post on his website.
Bland also said Wheedle's website design was "below-average".
Although Zillion had innovative features and lower fees, Bland said it didn't make much of a difference in the long run.
"No amount of shiny website features made up for the fact sellers sold more items on Trade Me, and at better prices," the blog said.
Christchurch-based business advisor Ben Kepes said Wheedle would find it "very hard" to compete with Trade Me because the latter was so established in the market.
"Even though everyone whines on the Trade Me message boards about the fees going up no-one really cares about that stuff because it so incredibly easy [to list goods]," Kepes said.
Lance Wiggs, who acted as an advisor to Trade Me during its sale to Fairfax, said Wheedle would be better to focus on a niche market.
"The way to win against them is to take a niche and say 'I'm going to be the best site in the world with books or shoes.
"You just take a niche and aim very tightly at that niche and you can see Trade Me eventually giving [it] up ... once you get a niche you might earn the right to get other niches and you might eventually become a challenger," Wiggs said.
Rees responded that Wheedle was not going to limit the goods its users could buy and sell.
"If you want to sell a house or a car or a motorbike or a pot we need to have facility there for [customers] then they can decide for themselves. We're carving out a niche market without our ability to charge lower prices," he said.
Another new online marketplace - called List Sell Trade is due to launch on Thursday.