Don’t get burned by Trademe’s restrictive shipping fees policy

I’ve operated a personal Trademe account for a couple of years. I only traded a small amount of stuff and haven’t had to ship anything that I can remember. Earlier this year I opened a work account and started to sell surplus computer equipment that we had had, which has brought in a small but useful amount of money for us. However, in doing this I have run into points of disagreement because Trademe seeks to regulate and restrict shipping costs in a way that is, in my view, completely at odds with the rest of the way their site operates. The auction process is a form of arbitration or negotiation. In effect the final sale price of goods is arbitrary and arbitrated in a way that is only lightly regulated in a system like Trademe’s – as it should be.

But when you get to shipping charges, Trademe has this clause which says “You may only charge reasonable amounts for shipping”. If you ask for that to be broken down, it comes to “You may only charge for the physical cost of packing” and “You may only charge for the amount you pay the shipper” (for example the fee for ParcelPost or a courier”. In actuality, when shipping goods, you are likely to incur additional costs. In our case, I would expect it to take me about half an hour to pack the goods, and there is likely to be fuel cost for me to deliver the package to a post shop. There is no logical reason why a shipping fee can’t include these costs. I think that most people would feel that these would be “reasonable”.

Every time that I have spoken to Trademe before to ask a question about how things work, they have always given me an explanation. This is the exception. They have not explained why they have this draconian restrictive shipping fees policy, nor are they open to having their policy challenged. It may be argued that the extra costs should be factored into the price of the goods themselves. This results in a higher price for buyers who are coming in to pick up goods. You could give a discount but this is possibly contrary to Trademe conditions as well as, like many things on their site, discouraged by financial penalty. It may be OK for a business to operate this way but many small traders are doing this part time or as a hobby, do not have a shipping department at their disposal to dispatch goods in the most efficient way, and therefore are doing it themselves and will incur the extra costs. Every other business that is doing mail order can charge the shipping they wish and the parties to trade can negotiate directly on shipping charges.

The only reason I could see for this policy is to push up the sale price and therefore, Trademe’s commission on the sale. As I have noted, in real life the cost of shipping, outside of doing business through Trademe, is one of those things that people can always negotiate. People are questioning the charges and fees that Trademe imposes, some of which are ridiculous (a fee to put a reserve on goods, a fee to change the closing time of the auction etc). Therefore there is room to question other parts of how Trademe operates and the possibility they might be abusing a dominant market position. The major competitor to Trademe is the Sella site which has managed to mop up Zillion and Sellmefree among others. I expect their popularity is far less but they have the correct policy on shipping fees, that it is by negotiation. I have had my fingers burned twice by Trademe over the shipping fees and they won both times because of the restrictive rules and (excessive) penalties they impose. I also believe strongly that there are traders who refuse to ship goods because of Trademe’s policy, and that other traders are interpreting “reasonable” as I would interpret it and as most “reasonable” people would interpret it.

Given the exorbitant price that Trademe was sold to Fairfax for (some $750 mlllion – who would pay that for a simple website) they are a “big business” and their policies and charges need to come under scrutiny as is the case for all big businesses.