Trading Post to offer online auctions and take on eBay
Tuesday, May 27, 2008/
Telstra-owned classifieds business Trading Post has seized on consumer outrage with eBay Australia’s decision to force customers to use its wholly-owned payment subsidiary PayPal by launching online auctions at its www.tradingpost.com.au site.
In a bid to differentiate itself from eBay, Trading Post’s new auction site will offer sellers the chance to list auction items for free. Bruce Akhurst, chief executive of Telstra’s Sensis division, which owns Trading Post, expects the free-to-list pitch will resonate with sellers: “You only pay when you sell. We at the Trading Post share the risk with our advertisers. We win when you win.”
Auction fees will range from 50c for items under $10 through to $24.95 for items over $500. To make sure sellers actually pay for their listings, Trading Post will require all sellers to have an Australian street address (not a PO box).
Trading Post, which has spent 12 months developing the auction platform, will offer a range of payment options, including cash-on-delivery, bank deposit, money orders, cheques and, perhaps a little ironically, PayPal.
Akhurst points to a Newspoll survey conducted last week confirmed 93% of people who have sold online and 95% of people who have bought online said it was important to have a choice of payment options when trading online. “There’s a lot of call in the market to provide buyers with what they really want – and that’s choice.”
Akhurst says Trading Post is in discussions with a number of eBay power sellers who have been “overwhelmingly supportive” of the new site. Akhurst clearly expects the support of these power sellers to be converted quickly into action. He has boldly predicted the amount of general merchandise will increase by 25% by this weekend. “And it will keep growing from there.”
Trading Post is one of Australia’s best known classifieds brands and its long-running weekly newspaper has a readership of 725,000. Traffic on the website has increased 140% in the last three years and unique visitors reached two million for the first time in March.
Akhurst is confident these users will embrace the auction concept. “This isn’t a start-up business. We are a popular site already, so we are very confident that Australians know us and trust us.”
Trading Post’s move comes as eBay lodged its reply to the ACCC’s inquiry whether eBay’s PayPal move should be exempt from the Trade Practices Act. The ACCC received 566 submissions on the issue – all of them against eBay’s PayPal decision.
eBay says in its response that customers will still be able to use payment alternatives such as bank transfers, debit cards and credit cards, although transactions using these payment methods will still need to go through the PayPal system.
eBay reiterated its argument that forcing customers to use PayPal would improve security of transactions and argues that as PayPal remains a small player in the online payments sector, the move will not stifle competition or innovation in the market. “It is not possible for [this move] to contribute in any way to a reduction in innovation in the online payments market and there can be no harm to the Australian economy.”
The ACCC will rule on the PayPal move by mid-June.
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