Price Comparison Websites (PCW) save time and money so it’s no wonder, that 85% of online shoppers use them to find the best deal before making the final choice for a particular seller. Even less surprisingly, such sites are becoming more and more - they make a profit out of the blue! Today we will talk about how to create a price comparison site and make it successful.
From the article you will learn:
- What niches are interesting for PCW users and why.
- What good PCW sites should be to please buyers.
- How to collect pricing information.
- Mandatory functions of price comparison sites.
- How much does the development of such a site costs.
- How to promote PCW services.
- How to make money on it.
What niches are interesting to usersThe choice of products, prices for which you will compare is the main point in the creation of PCW-sites. A report by the Office of Competition and Markets published in 2017 showed that buyers most often use PCW services when it comes to travel and the choice of service providers: insurance, internet access, credit card, car insurance and home insurance.
Ideally, you need to focus on products and services where there is high demand and high conversion rates. And it would be just great if you have no competitors in this niche. Only three new niches can meet all three criteria, for example, non-paper 3D printing (with metals, biomaterials, plastic, etc.), services and products based on artificial intelligence, the Internet of Things and the blockchain.
If you are familiar with such a market, create a price comparison site for it. Otherwise, choose two of the three criteria. So, insurance, loans, real estate, cosmetics, video games and some other markets have high rates of demand and conversion, but there is a lot of competition. Markets such as handicrafts (not the market as a whole, but individual product categories) and location-based services have high conversion rates and less competition, but less demand for them.
Here are some examples of niche PCW projects you can note:
- CruiseCritic - sea cruises.
- Bikmo.com - insurance for cyclists.
- Wine-searcher.com - wine products.
- Cable.co.uk - digital services.
- Parcel2Go - parcel delivery.
- CheapShark.com - video games.
What should be good PCW sitesIn addition to user preferences, the Report of the Office of Competition and Markets also states what criteria a professional price comparison site must meet in order to appeal to users, namely: the site must be honest, accurate, responsible and easy to use.
How to collect information about products
API integration. Receiving information directly from retailers. Your system will send requests via the API to the sites of trading platforms, get the necessary data (price, availability, colors, images, delivery terms, etc.) and enter them into your database. This is a simple and convenient method that allows you to get accurate and relevant information.
API integration is not an easy option. We need money and time, and there may be difficulties associated with the specifics of individual sites and / or product categories. Fortunately, recently sites are starting to make listings according to industry standards (retail, insurance, real estate, travel, etc.), this simplifies the task with the integration of API.
It’s worth using this method if most price providers use APIs and are ready to give you access to them. In most cases, you will get access for free, because in this way sellers can increase sales without doing anything. To withdraw the commission will need to connect to the affiliate program of the store, for example, to Amazon Associates. eBay, Alibaba and other large marketplaces also have affiliate programs.
Web scraping. Collecting information through web scanners (or spiders), who with a certain frequency visit pre-selected sites and "scrape" the necessary data for your database. A fairly common method that allows you to collect information from all sites, if their design meets certain criteria (or a spider is configured for this design) and if these sites have not set up protection against spiders (a frequent occurrence).
Web scraping is used where there is no developed market for affiliate marketing (affiliate programs and integration via API). In addition, it can be useful to quickly grow the database to the level of competitors.
Manual addition from retailers feeds. Sellers who do not have an API can provide you with information about their listings as XML and CSV files or enter information manually. If you use XML and CSV files, you will need employees who will transfer data from them to your database. If sellers will enter information themselves, then this will require the appropriate interface.
This approach is used when it comes to products and services with static prices (insurance, loans, digital services) or when the list is made up of experts. The latter option is characteristic where prices are simply not enough. For example, when choosing a credit card, the user will want to know its advantages and disadvantages, whether there are hidden charges or unacceptable additional conditions - an expert opinion is necessary for all this.
Manual add by buyers. A rare method that is used to increase the relevance and accuracy of prices. Usually this function is an element of feedback and serves to identify problems collecting information by other methods. For example, if you used web scraping and some site introduced protection from it. It is important to have people to check the information from users, since this function can be used in competition, for example, to increase the value of competitors' goods.
Required price comparison site features
Listing Comparison and Listing Information Pages. The first is a listing showing prices, short descriptions and small photos. Clicking on the list, the user will go to the detailed description of the product or the seller’s website to make a purchase. The characteristics and product image are taken from the databases where they come in using one of the information collection methods.
Listing can be presented in a variety of ways, but as a rule, it is either a list in the form of a table, like on the Broadband site, or a list in the form of tiles, like on the Shopbot site. The first option is better suited for products where you need to bet on the description, the second - on the appearance.
Search and filters. There are several ways to implement this feature. The simplest and most popular - search based on keywords and filters by category. To make the listing more convenient, they can add sorting options by price, rating, popularity, and more. So do Skyscanner, Google Shopping, CompareTheMarket, Skyscanner, Google Shopping.
The second search option is location based. The service shows goods or services on a map within a certain radius (search for people on Tinder) or within a certain region, city, country (search for gas prices on GasBuddy).
The third option works according to the scheme: you fill out a form with requirements, the price comparison site sends a request to the suppliers, who then submit their offers to the site. This is how Kitchify, Compare IP and Parcel2go work.
Price alert. Allows you to track the change in value for the selected or best products in the listing. It can be subtracted in the form of push-notifications, SMS or email. Some sites provide users with the ability to specify a price limit, at the intersection of which you need to send a notification.
Price history. The ability to track the dynamics of prices within a certain time. You can create the “Search for the cheapest month” or “Compare by month” filters so that users can independently track trends.
Reviews. Studies show that up to 90% of buyers trust reviews as well as recommendations from friends and acquaintances. At the same time, more than half of online users read 2-4 reviews before making a purchase. Thus, the function "Reviews" is required for price comparison sites. And need some feedback for products and service providers.
Awards. Glasses and badges (TripAdvisor) cashback, gift cards, discount coupons (Pricewatch) and gift distribution motivate people to make more purchases. There can be a lot of such ways to encourage people. The best option is to participate in the draw with a 50/50 probability of reward, even if it is a trifle.
Scan QR code and bar code. Helps buyers compare prices in local stores using a smartphone camera. Implemented on ShopSavvy and BuyVia sites.
How much costs the development of such a site
How to promote PCW servicesIn general, you need to take the usual marketing promotion methods:
- Search engine advertising. The most effective way to drive traffic, as with the help of certain keywords you can immediately understand what the user is looking for and tune this advertising message.
- Promotion in social networks. Need to promote a brand, not specific pages (products).
- Banners on specialized sites. As well as promotion in social networks, should be aimed at promoting the brand, except in cases where you can use contextual advertising.
How to monetize the price comparison site
- Affiliate programs. When people move from the price comparison website to the seller’s website, they do this through referral links. On such links you can earn for the transition or the perfect action (purchase). Such programs can be connected to almost all large marketplaces.
- Google Ads. Practically all PWC services are used, because it is simple and does not require much effort: connect contextual advertising and earn money. Earnings are scaled as the site grows in popularity (the number of clicks and transfers), and the advertisement itself automatically adjusts to the content of a specific page.
- Brand Advertising. Placement of banners and promotional offers in a pay-per-click or show listing. Earnings more than from Google Ads, but for this you need to formalize the relationship with the brand or its representative.
- Site selling. Many PWC services were eventually absorbed by large players who wanted to remove competitors, expand their user base, or get new technology.
- Targeted marketing. Price comparison sites can analyze the behavior of users on their sites and their page on social networks (if there is a link) in order to understand their consumer needs and preferences. And then use this data for targeted marketing.