So what are PCWs anyway?
PCWs or Price Comparison Websites as the name suggests are all about comparisons. Also known as aggregators, these websites compare and display the prices available for a particular product across various e-stores, saving the potential customers from going to multiple websites to check and compare prices.
Although Price Comparison Websites these days have options of comparing almost all kinds of consumer products, but amongst one of the main use of such websites is to compare financial products such as insurance, loans, credit cards, etc. Due to extremely dynamic pricing, ticketing and hotels also are amongst most compared. Some Price Comparison Websites also have browser add-ons which automatically scan the products once their name is entered in the search field and display their prices.
How do Price Comparison Websites actually work?
So what goes on behind the engines of the PCWs that help you find the best deals on your favorite products?
This is a little technical, but really interesting to know.
Basically the PCWs are dynamic search engines which continuously grab results from various online shopping portals through back-end data scraping and then display the comparative prices along with product features. They employ something called ‘Rapid Query Processing Technology’ which brings quick results and offers easy navigation and interface. Through the effective use of QPL (Query Processing Language), the queries are processed by separating the query processing code from the user interface and independent of search engines. PCWs mostly use open source technologies for giving real time comparisons. Code writers and technical developers these days are giving a lot of importance to PCWs for the kind of benefits it can produce for both, the businesses and the consumers in terms of the transparency and variety of options.
What do you and I get?
PCWs take consumers’ shopping experience to a totally different level by making them aware about the best available deals and prices. Post this, the potential customers can be redirected to the website of their choice where they can buy their favorite product and complete their purchase.
Not just making selection easy, PCWs also help the customers save a lot of money on purchase of their favorite products by showing them the best prices available across different e-stores.
For instance, say if you look up for a T-shirt of a particular brand, you will be served not just the prices at which different sites are selling the product, but also how different vendors have priced the same product, so that the users can make the most pocket friendly choice.
As soon as one enters a product’s name he/she is searching for, the price comparison website quickly collates all the information from different websites which are selling that product and displays all the results along with the available prices and the links of the websites.
All About The Comparative Flip
So is there a flip side to the Price Comparison Websites? Would seem not, perhaps, what with the wonderful benefits described above. But like all web based products, this has a flip side too.
Artificial Price Inflation: It is argued that the Comparison sites add a layer of actual costs by collaborating with the sellers and inflating the prices. It can make sense too; on many comparison sites it is observed that certain companies are willfully excluded from the comparison list, meaning that the whole premise of the comparison is lost. In the Airline ticket comparison sites and insurance etc. this is more rampant which basically means that the consumers are being driven towards predetermined companies. This is not completely fair.
Killing the Competition: With the comparison sites becoming more and more popular and climbing the SEO Charts, it can be reasonably argued that the Price Comparison Websites can easily hamper the online visibility and searchability of other websites which choose not to become a part of a particular comparison site. This in fact defeats the whole purpose of a comparison website.
Assumptive Comparisons: Many comparison websites, especially in the insurance and financial sectors work on certain preset assumptions of the requirements of the customers. In reality these requirements can be very different. Comparison websites, in the garb of fair comparison can also push sell certain products in conjunction with the sellers. Up selling of add-on covers in insurance and providing all inclusive quotes is a case in point. In other products also, comparison sites are known to have promoted products that have a low demand or are not selling so well on their own.
Quality Compromise: It has been argued that in order to offer cheapest deals, the Price Comparison Websites keep the quality aspect on the back burner. Most of these sites work on commissions that they get from the sellers and can manipulate the efforts and the comparison outcomes to favour the one that pays most commission rather than focusing on the value offered to the customer. The ‘value for money’ aspect is somehow shadowed by the ‘cheapest at all costs’ aspect which is not really beneficial or fair to the customer.
So Who Pays for the Free Lunch?
The websites that doesn’t sell a product but just compares products available on different websites, still survives, keeps growing and even advertises for its products and services through various mediums somehow ends up creating a certain amount of mistrust.
So how do these price comparison websites actually survive? Obviously they make money, rather a lot of money, considering the pace at which they are multiplying. These are a few ways in which these sites make their living:
1) Charging a Flat fee to the vendor: Many of these sites ask for a flat fee, sometimes a renewable fee to include the particular vendor on its list of compared vendors. Although this system of fee is not quite common anymore these days but some renowned comparison sites still ask for a one time fee from a lot of new and upcoming businesses since they are not sure of the kind of actual conversions and the new websites themselves are looking for actionable web presence.
2) Charging at Cost-per–click: Another way the PCWs charge featured businesses is each time a consumer lands on the e-tailer’s platform via a PCW. The fee amount generally depend on the product category and the market reputation of the selling company itself and can vary significantly. In some cases, the money is paid only if a transaction is completed and a purchase made.
3) Priority Positioning: Many companies pay for ‘sponsored listings’ so that their products appear at the top of the search results. This is a huge money spinner for the comparison sites since it offers great advertising value to the sellers of the product. Sometimes these sponsored products also feature in between a free listing or as a call to action buttons to grab customer attention.
So are they really worth the time?
Well like many things in life, PCWs as well have their own advantages and disadvantages.
As platforms where the prospective customers can compare products, features and prices, and can see a multitude of products with a single click, they’re just awesome, but on the flip side, it is also true that some of these comparison sites work into the hands of the vendors that pay the highest commissions and in return ask their products and services to be ranked on the top. This can be extremely misleading for the customers.
Like everything else on the web, due research and discretion should be used while using these PCWs.