How do price comparison websites work and what are their pros?

When the sales in your online store increases you look for new channels thanks to which you’ll reach your potential customers. One of possibilities of sales development and increasing the leads are price comparison websites. According to the research conducted by Gemius, every second person who buys in the Internet uses this type of tools. In this post you’ll find out how price comparison websites work and what are their pros and what threats they can cause. So let’s have a look at some solutions.

 

What price comparison websites are available in Poland?

 

The most popular price comparison websites in Poland are Ceneo, Nokaut, Skąpiec and Okazje.info. The undeniable leader on the market is Ceneo, which has been on Polish market since 2005. Every eight transaction in online stores comes from this tool. About 15 million users come and go through the service and the service has 25 million active offers. All that is available thanks to 18.000 registered stores, which provide access to their offers.

According to data from 2015, Skąpiec is on the second place, Okazje.info on the third place and Nokaut on the fourth one. In spite of this, those price comparison websites also have several millions pageviews per month.

If someone wants to compare products manually, he can use Allegro and sort products by prices. However it’s very arduous and time-consuming work, if we have a wide range of products.

As you can see price comparison websites attract many users. All of them are your potential customers, so it would be a huge mistake not to have your offer in at least one price comparison website.  

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Price comparison websites in the world

 

The most important here are of course Google and Amazon. Because of its domination in the world, Google wins. In Google Shopping we can find almost every product, that is why price comparison websites owners look unwillingly on this solution. Many users use price comparison websites and when they search a product, they have also some offers displayed at the top of their searches. The second big market player is also Amazon, which integrates many sellers in one place. These both solutions aren’t of course typical price comparison websites that we know, but we should keep them in mind.

More typical and known in the world price comparison website is among others: Shopping.com, which also belongs to one of the e-commerce giants – eBay. This portal has been taking place in the top ten for many years and it reaches France, Germany and Great Britain. Another popular solution is Pricegrabber, which mainly reaches USA, Canada and Great Britain.There are currently over 100 million products and offers in this price comparison website, which come from over 4000 sellers. 26 million unique buyers visit this price comparison website per month, and average basket value equals $200. The other, however less popular, solutions are Nextag, Shopzilla, Twenga and many local price comparison websites in particular countries.

 

How does price comparison website work?

 

It’s a kind of service, thanks to which we can compare product price in different stores. Such price comparison websites usually work similar to search engines. We can search products by name or browse through particular categories. In more advanced price comparison websites we can choose particular parameters. After defining particular parameters or name, price comparison website will display you store names together with prices where the product is available. Remember that most of price comparison websites display offers of these stores, which joined them by sharing its offer. A store presence in such price comparison websites is paid.

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What benefits does online store have from being placed on price comparison website?

 

The main benefit is cheap and effective promotion. Because of a huge traffic on these websites, you have an access to many potential customers. And you get that all only by sharing your offer in another service. You don’t need to run additional marketing campaigns. However an important aspect here is to take care of a proper price policy, because if your products are the most expensive the conversion might be lower. According to Ceneo data price comparison websites generate about 40% of traffic in online stores.

Additionally when you share your offer in Ceneo, you can use additional analytical tools, thanks to which you can improve your offer.   You can easily check top products from your offer as well as from behind your offer. You can also compare your store with other similar stores or check product history and trends.  

One of the most important benefits of being placed on price comparison website is quite good influence on SEO. Price comparison websites quite well influence on your store position as well as on products. Thanks to that your store is more visible in search engines and you can also expect more traffic from search engines.

You can also use additional functionalities such as standing out your products and join different programmes, which support sellers. Thanks to that you have an influence on popularity of your offer. What’s also important, you settle accounts for effects that is real sales leads and not for your presence in a search engine. It means you pay kind of a commission on sales when the customer will visit your store or buy something exactly from a price comparison website.  

 

What does the customer get by using price comparison websites?

 

The main advantage of using price comparison websites is time saving. By searching a particular product we have an access to offers of many stores in one place. We don’t have to search in the Internet manually and compare them separately. Additionally we have an access to reviews and ratings. Customers don’t always look at the lowest price. More and more people also take into consideration reviews and the credibility of a seller. After choosing a suitable offer, every buyer can easily go directly to the store and purchase. Everything is easy, quick and pleasant.

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What should we be careful about when we share our offer on the price comparison website?

 

As you can see there are many benefits of ‘being’ on price comparison websites, however there are some issues about which you must remember when you choose price comparison website. The basic rule that your store should fulfill is its functionality. Make sure that your customers can place an order easily. Present your products in a nice and esthetic way, because this can also encourage potential customers to increase the value of their shopping basket. It is also worth presenting some additional related products on a product card. Have a closer look at some important aspects:

 

1.Empty click-throughs to your store

 

If you discover that the visits in your store are from price comparison website and despite this customers don’t buy anything, it’s a signal that you should analyse your customer purchase path. It may turn out that improvement of any detail can influence the sales.  Make sure that your store is well prepared before you share your offer on price comparison websites. A great number of click-throughs can also show that your competition generates costs dishonestly.

 

2.Incorrect merging of products from an offer

 

Another important thing is correct merging of products. In spite of the fact that intelligent algorithms manage with price comparison websites, some mistakes can appear. Check if there are mistakes in your offer and react quickly to it. It may occur that products will be merged incorrectly or one product will be on a separate card. An important issue is file preparation. Most of ready e-commerce solutions have implemented this standard. However if you have any own solution familiarize with directives concerning sharing XML file with your offer. Well prepared file reduces the risk of mistakes to minimum.

 

3. Track your competition

 

Actions of your competition can inform you what is payable and what isn’t and also which solutions to use. Firstly, see on which price comparison websites your competition is. Thanks to that you’ll know where to put your offer. In some businesses, it may turn out that placing an offer on price comparison website is useless. It concerns most of businesses where products are priced individually or can be configured individually. Check also how availability, prices and delivery costs change. All these factors have an influence on shopping.

 

4. Avoid price war and take care of purchasing costs

 

Presence on different price comparison websites can lead to a price war. Theoretically it’s customers’ aim to find the product that they look for at a lowest price. However in a longer perspective it can be a trap, which will cause that margins on products will lower significantly and the store won’t be profitable. If you have a good margin on your product, consider displaying it as a promoted product. Pay special attention to shipping costs, product availability and if it’s possible encourage customers to leave reviews about products, which you sell.  

 

5. A suitable choice of price comparison website

 

If you have a big budget for promotion you can be on all price comparison websites. But is it  necessary? It’s better to use one price comparison website and optimize it concerning the greatest conversion. It’s the best to choose such a price comparison website, which works the best in your business. Diversification and investment of advertising budget in other sources is better solution.

 

6.Product availability and its prices

 

You must also remember about a technical issue. Your offer is usually loaded to price comparison website once a day, so if you want to give a lower price for a particular day, it’s the best to plan it at the end of a previous day, because most of price comparison websites load and update files from your store at night. That is why price changes made during a day won’t necessarily have an influence on an offer on price comparison website.

 

Price comparison websites are not enough

 

If you want to increase the range of your store, your presence on price comparison websites will be a good choice. Analytical issues will also meet your needs to a certain extent too. However if you want to approach the issue as a whole and track your whole competition, data from price comparison websites is not enough. For example, it’s worth using Price Expert – the tool for monitoring and managing prices. Then your analysis will be complex and it will include competition that is not present on price comparison websites. Thanks to that you will get ready reports and data, which will save your time and generate profits. Manual check of every offer will not be necessary any more, and saved time can be spent on improvement of your store or offer. The choice is yours.

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