Comparison Shopping Sites - Food for Thought

Note: This is an original article from our monthly newsletter. This article is meant as a objective discussion point only. Cheers, Josh

Comparison Shopping Sites

From a consumer perspective online comparison shopping sites are the best choice for their time and money. These sites allow shoppers to quickly see products with prices for multiple online retailers all on one screen. It's no wonder that they have increased in popularity in the last couple of years (Google Trends analysis). The 2006 holiday shopping season will no doubt bring more shoppers to those sites than ever before.

The major players in the comparison shopping space are Shopzilla, Yahoo Shopping, Shopping.com, NexTag, Google Base, and PriceGrabber.com. It's completely free to list products in Google Base (Froogle) which makes it a easy choice for enterprising retailers. Most other sites charge merchants on a pay per click basis. The minimum click charge varies depending upon the types of products a merchant is selling, but typically ranges from $.10 to 1.00. Merchants also can spend more to get higher ranking listings.

If a merchant has a professional looking store that yields a solid conversion rate, these pay per click channels can be lucrative. The key is measuring the success from each marketplace. If a merchant spends $500 on clicks at Shopping.com which results in $5000 in sales, the merchant need only have a 10% profit margin to break even. If the merchant's profit margins are closer to 20%, the merchant would see a 100% return on investment. Merchants that don't measure their return on investment (ROI) are bidding in the dark and essentially rolling the marketing dice. With online marketing and analytics, there is simply no need to market blindly.

Each comparison shopping site accepts data in a different format which can make getting data into the comparison engines difficult. However, there are ecommerce platforms available that will create data feed files for the merchants for each marketplace. There are also ways to automate the data feeds for Yahoo Shopping, Shopping.com, and Google Base to ensure product listings are up to date.

By searching for the comparison shopping brands on Google Trends (www.google.com/trends see link above) one will notice that there is consistently a spike in queries for the comparison sites during the holiday season. As the holidays approach, online merchants serious about capitalizing on holiday orders should surely consider the comparison shopping sites.