Thinking of building a Trade Me alternative. Tell me why it's a terrible idea

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Forums › Startups › Thinking of building a Trade Me alternative. Tell me why it's a terrible idea

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Master Geek
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#3483841 24-Apr-2026 23:53

sleemanj:

I don't see any indication that you have even considered how to make enough to even cover operating costs, let alone make enough for marketing, or dare I say it, profit.

I wouldn't even bother without several millions of dollars in advertising budget alone just to get off the ground.

With that said, 3-4 years ago, 90% of my sales were on Trade Me, today less than 10%. Perhaps that's just me, but I really don't think so. Trade Me's fees and poor UI choices have driven people away. If you were really serious...

You MUST line up a full assortment of sellers with thousands of listings at attractive prices BEFORE you open the doors, if you open the doors to a website with a handful of listings, INSTANT FAIL you lose.
No drop shippers, goods must be in New Zealand, they must be dispatched by courier within 7 working days.
All users need to have their identity verified in some manner to try and keep out the scammers.
Sort by price+postage to make sure the playing field is level
Buyer protection at least as good as ping.
You will need to have a mobile app from day one, not just a website - the common folk demand it.
You will need to have a fully function website from day one, not just a mobile app - the professional sellers demand it.
Bidding makes it complicated, I'm not sure it's necessary to have an auction system, only casual sellers use it.
Charging fees before you have a strong market presence would be unwise, you will need a load of cash to burn to keep the lights on for at least a year or two.
You will need a fully functional API for professional sellers, again from day one.
A GOOD full text search. Categorisation is a PITA, search is king.

On operating costs: Two revenue streams: stores pay roughly $25–30 a month for tools and dashboard, buyers optionally pay a small tiered protection fee (our version of Ping, but with return shipping actually covered). No ads, no selling data. Infrastructure on free tiers means the lights stay on for almost nothing while we build volume. The risk is our time, not borrowed money.

On your list: Pre-launch inventory seeding is our entire Phase 0 strategy, founding stores cross-posting to TradeMe before we open publicly. No dropshippers, NZ only, identity verified. No auction system, fixed price only, auctions add complexity for marginal benefit. No fees until market presence, founding stores get a lifetime membership free permanently, paying subscriptions don't start until month 3 or 4.

Sort by price plus postage is a brilliant addition we're adding it. Total delivered cost is what actually matters and no one does it cleanly.

Mobile app: it's a web app that installs to your home screen on both iOS and Android, works offline, uses the camera natively and sends push notifications. It looks and behaves like a native app once installed. We're not building separate iOS and Android apps for the MVP, we're a two-person team building a full marketplace and splitting the effort there would mean nothing ships on time. If traction proves it's needed, native apps come in Phase 2.

Full API for professional sellers: on the roadmap but not day one. What would that unlock for you specifically?

Handle9

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#3483842 25-Apr-2026 00:18

yudumcan:

Handle9:

So how do you make money? If you aren’t charging fees are you selling user data?

Two ways we make money. First, stores and regular sellers, businesses with 20 or more active listings pay a subscription of around $25–30 a month for AI listing tools, analytics and a proper store dashboard. Individual sellers listing their own stuff always list for free, no subscription but there'll be optional bump feature like TM for $2-3

Second, optional buyer protection. When you pay by card, you can choose to add buyer protection for a small tiered fee $2 flat on anything under $50, around 3–4% above that. That covers return shipping if something goes wrong. It's optional. Bank transfer is always free with no protection, same as TM always was.

That's it. No ads. No selling your data to anyone. No third-party data sharing. We're building a NZ-only marketplace, not an ad platform. The business model is: stores pay for tools, occasional sellers pay for listing upgrades, buyers optionally pay for protection.

I’m sad to say I can’t see you lasting six months if that’s your business plan. You’ve got to get revenue in from somewhere and that isn’t going to make enough to keep the lights on. I doubt you’d make enough revenue to cover return shipping with that business model.

sqishy

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#3483876 25-Apr-2026 12:02

That is the question every seller will ask first.
Not:

Is it cheaper?
Is it prettier?
Does it have AI?

Just:
Will it sell?

sleemanj

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#3483877 25-Apr-2026 12:09

Full API for professional sellers: on the roadmap but not day one. What would that unlock for you specifically?

Even as a relatively small seller with ~1000 SKU I'm not going to be using your tools to manually load them and manage inventory levels using your system when I already have all of that in my own system. I'm not going to be going to your site to retrieve sales details. I'm not going to be copy-pasting said details into my sales management system, or accounting system, or manually recording tracking numbers in your system, or using your system to place feedback one by one or...

If you are targetting professional sellers, and it seems you are, then an appropriate API is paramount, and you'll likely need to be assisting in integration development as well.

---
James Sleeman
I sell lots of stuff for electronic enthusiasts...

gzt

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#3483884 25-Apr-2026 13:38

sqishy:
That is the question every seller will ask first.
Not:

Is it cheaper?

Is it prettier?

Does it have AI?

Just:
Will it sell?

I recall a number of large sellers who have tried platforms other than TradeMe as soon as they were available. Imo if the correct listing tools/api are available there will be a number ready to go.

freitasm

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#3483907 25-Apr-2026 16:24

yudumcan:

Two ways we make money. First, stores and regular sellers, businesses with 20 or more active listings pay a subscription of around $25–30 a month for AI listing tools, analytics and a proper store dashboard. Individual sellers listing their own stuff always list for free, no subscription but there'll be optional bump feature like TM for $2-3

Second, optional buyer protection. When you pay by card, you can choose to add buyer protection for a small tiered fee $2 flat on anything under $50, around 3–4% above that. That covers return shipping if something goes wrong. It's optional. Bank transfer is always free with no protection, same as TM always was.

That's it. No ads. No selling your data to anyone. No third-party data sharing. We're building a NZ-only marketplace, not an ad platform. The business model is: stores pay for tools, occasional sellers pay for listing upgrades, buyers optionally pay for protection.

I am late to this discussion but followed every reply. All of this is good information. I agree that revenue has to start from day one. And I have questions:

You do realise that AI tools are expensive, right? Just running a model on a GPU won't cut it.
Reliable hosting is expensive. CI/CD is expensive. Testing is expensive. Security testing is expensive. Ongoing security, CDN and others are expensive. Accounting is expensive. Those are things you put money into before you start and after you start.
Buyer protection? Are you buying insurance with that charge? Because the day you need to cough up a large amount for something, your business is toast.

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quickymart

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#3483939 26-Apr-2026 07:47

I found another earlier thread where this was also discussed (albeit not in the context of setting something up): https://www.geekzone.co.nz/forums.asp?forumid=132&topicid=110430

Linux

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#3483943 26-Apr-2026 08:34

Doing this will make you 1 million dollars if you start with $10 million

eracode

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#3483944 26-Apr-2026 08:43

Linux:

Doing this will make you 1 million dollars if you start with $10 million

That’s a 10% return - not too bad under the circs.

Sometimes I just sit and think. Other times I just sit.

freitasm

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#3483945 26-Apr-2026 08:52

eracode:

Linux:

Doing this will make you 1 million dollars if you start with $10 million

That’s a 10% return - not too bad under the circs.

Yeah. More something like "To be a millionaire you start as a billionaire and invest in this".

But the idea is that it will cost without much return. First-mover advantage is real.

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#3483946 26-Apr-2026 09:02

eracode:

Linux:

Doing this will make you 1 million dollars if you start with $10 million

That’s a 10% return - not too bad under the circs.

Actually now I read it again it came out wrong lol

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eracode

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#3483947 26-Apr-2026 09:10

Linux:

eracode:

Linux:

Doing this will make you 1 million dollars if you start with $10 million

That’s a 10% return - not too bad under the circs.

Actually now I read it again it came out wrong lol

😀 I knew what you meant - my post was just a bit TIC.

Sometimes I just sit and think. Other times I just sit.

freitasm

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#3484917 28-Apr-2026 09:26

Ī will be updating the FUG to ensure people are aware we want real conversations here, not AI-generated replies. This applies to some people in this thread.

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#3485025 28-Apr-2026 12:28

I would use it Facebook marketplace can be terrible lots of stolen Lego on there . I find trademe now too expensive definitely room in the market for a smaller player

LightOwl

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#3485638 29-Apr-2026 18:48

I've thought about this myself over the years. And I actually worked for a site overseas that is in this space.

Some opinionated points:

The biggest thing working against you is network effects. Sellers need buyers, buyers need stuff for sale, catch 22.
Don't go for professional sellers off the bat - that stuff can be found anywhere and API-driven B2C listings will drown out the C2C. C2C listings are far more unique, and a genuine indicator of engagement, but you have to give people a reason to list on your site rather than TM or FBM. B2C is a revenue play, not a service to your customers, so don't do it until you already have momentum.
Two main ways to gain traction - carpet bomb or wedge.
- Carpet bombing means years of market research, build and testing, followed by a launch backed by a large marketing budget. Doesn't sound like you're there, and I doubt you'll find a backer with enough finance.
- Wedge means staring with a niche category and expanding from there. You need an engaged audience to build on, and that's easier to get by doing one category very well with features specific to that category, than trying to do everything.
Alternatively, try hyper-local, start in your local area - marketing will be much cheaper and it can be f2f which side-steps a lot of trust issues.
Different categories have very different needs. Some things take a long time to sell. Others are in hot demand, hard to price and work best as an auction. Some will be astroturfed by spammers/professionals (furniture is a classic one). Others are a hot-bed for scams (iPhones, GPUs).
Trust and fraud are very hard problems. It will consume a huge amount of engineering and support effort, don't underestimate it.
Escrow and payments are hard problems with lots of liability. Don't do this at the beginning, and it's generally unnecessary with a hyper-local or niche community focus.
You can't do this with two people without vastly reducing your scope - back to my point about starting in a niche or small local area. Personally I like the niche option better as it is easier to do it better than platforms that do everything.
With a shoestring budget you are going to need some very innovative marketing. Local marketing may cost a bit less but niche categories will generally already have active communities online that you may be able to leverage with their consent.

There's also an old adage in business of knowing too much - those with the experience to know how hard things are can be deterred from ever starting. It takes a certain naivete to take on big problems, but some of those that do learn enough to succeed.

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