Price comparison websites provide a useful snapshot of consumer goods and their prices. By analysing them regularly, you can make sure your prices stay competitive. Rachel Miller reports
Price comparison websites have become an established way for shoppers to buy products at the best price. The main websites, such as Kelkoo and Pricegrabber, feature everything from books and electronics to perfume and garden furniture. Their listings not only highlight prices but also show shipping costs and other extras. Some of the websites offer user reviews and ratings.
It’s certainly clear why consumers can’t afford to ignore price comparision websites. The fact is that businesses such as yours can’t ignore them either — they are essential barometers of the going rate for many popular consumer goods.
It’s not an easy time to be selling consumer goods. Shoppers are driven more by the need to find a bargain than loyalty to one brand or supplier. And fierce competition among retailers, both online and on the high street, can lead to price wars.
But whatever your approach to pricing, you can’t afford to be in the dark about what your competitors are charging. And rather than trawling through lots of websites, you can see the whole picture on a price comparison website.
According to a 2006 study by Professor Michael Baye of the Kelley School of Business at Indiana University, “At price comparison sites, the number of firms listing prices for a given product, and the identity of the firm charging the lowest price, change almost daily.”
One thing that is clear is that shoppers don’t always choose the cheapest item. Service, security and trust are all key influencers and small firms can often compete by offering a fair price and top-quality service. Indeed, the Indiana University study showed that the two types of retailers with the biggest market shares were the store with the lowest prices and the retailer offering the best service.
All the same, you can’t afford to be out of touch — you have to compare prices because your customers are doing it all the time. It’s vital to keep an eye on the competition and make sure that what you are offering is in line with others in your market. Price comparison websites provide a quick and simply way to keep in the picture.
You can improve your profitability by carefully watching the market and carrying out pricing reviews. Price comparison websites allow you to see where your product or service sits against competitors in your market. At the same time you need to establish a balance of price and sales level that will ensure you make a profit.
Fixing a selling price is not an exact science. You can set a price that you think customers are prepared to pay and which reflects the value of the product and takes into account overheads and allows for a profit margin. But you can’t operate in a vacuum. You’ll have to undertake further research — by checking out price comparison websites — in order to see where your price sits against the competition.
If you set your price higher than average, you’ll have to use marketing and service to convince consumers to choose you over a cheaper alternative. Price comparison websites often have user reviews that reveal that service is an important concern for consumers. Rave reviews for your service will certainly improve your sales figures.
At the same time, if you want to offer a real bargain price, you need to make sure you promote your offering to the widest audience to ensure that a high volume of orders come in.
Whatever your pricing strategy, you can’t afford to be out of touch. By comparing prices and doing your research on price comparison websites, you can make sure that your prices are working for you and bringing in orders.
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