The New Zealand online auction marketplace is currently dominated by publicly listed TradeMe. They enjoy a monopoly on online auctions and use this market power to frequently increase their success fees and listing fees. When you think about selling something online in New Zealand, TradeMe has the power of a verb.
I’ll put it on TradeMe if it doesn’t fit
We’ll just get a new flatmate off TradeMe
The market position of TradeMe has had many attacks from both well-funded and not-so-well funded startups. So far, none of them have succeeded. For some reason I am yet to figure out, Rich Lister Neil Graham has moved away from his transport industry expertise into something he clearly has no first-hand knowledge of.
So far, Wheedle has encountered the following problems:
- No restrictions on user names
- A slow-loading frontpage that is a rip-off of TradeMe and shows no innovative thinking
- No integration with social media
- Password reset including plain-text passwords which presents a security risk
- Lots of publicity but problems for people trying to place listings
Who is behind the Wheedle advertising and web development? There is clearly a transfer of wealth going on here. Neil Graham is being charged significant amounts of money to launch a sub-standard competitor to a major incumbent with monopoly power.
Having a $10 million dollar war chest to go up against a media behemoth (Fairfax) in a marketplace where the other major competitor is APN News & Media is as close as you can get to insanity. For starters, why has Wheedle done the following?
- Kept the success fee model?
- Not taken advantage of new web technologies to make search and listing far quicker than TradeMe?
- Fell into the “build it and they will come” trap?
- Outsourced to India pretty straightforward web development?
- Not tested sufficiently before launch to avoid multiple “Wheedle Is Down for Maintenance” messages?
I don’t think that Wheedle can succeed. It will be a success for the “experts” advising Neil Graham. He will lose his investment unless some dramatic changes are made. If I was Neil Graham I would go back to the drawing board and ask – how can we make an online marketplace that is easier to use than TradeMe?
If his team can’t answer that question in an elevator pitch they should exit the marketplace immediately before burning through more of his hard-earned millions.