by Neil Dixon

Created on: April 24, 2007   Last Updated: July 07, 2010

There is no doubt that online shopping comparison websites are a useful tool when comparing the price of goods and services that are for sale. Consumers who are looking for a quick answer to the dilemma of who provides the cheapest product or service look toward the price comparison websites for the answers. However, one must only use these websites as one of a number of places to gauge who is offering the best deal at any given time.

There are many price comparison sites popping up on the internet nowadays, and one must ask oneself about how such a company operates and makes its profits. The idea in itself is quite simple, take a number of leading companies that offer a particular service and invite them to set up a sales office within the boundaries of your internet site. The various companies will then pay either a set fee to the host, or a commission based on sales generated through the host site.

After investigating this mode of price comparing, some potential flaws are apparent. If the site is being used by a potential customer as the only point of call for price guiding, how does the customer know that what they are seeing is the very best price or service available. As we have discussed, the host invites companies to set up office within their site, not every company that offers a particular service will want to accept the invite. Many will have their own site, and will believe it to be wasted resources to be linked with the price comparison host site.

Now let us think about a scenario. A potential customer clicks onto the internet site of a price comparer. They initiate the search engine to obtain quotes for a particular service. The site then lists in value order, the best prices available from the list of companies they have managed to link to the site. However, several other sites that also offer the same service required and that didn't accept the host offer in joining the site, can offer the same service for a much reduced price than the comparison site has just quoted. The potential customer doesn't bother to check out the other sites as they think the comparison site has searched all the available online service providers and has found the absolute cheapest there is. The customer has therefore missed out on the opportunity to save even more money by simply searching other companies that sit alone on the internet.

As also mentioned earlier, with more and more price comparison sites springing up on the internet, the consumer should hopefully begin to recognise that a particular host site hasn't searched the whole market. Other price comparison sites have found a better deal with a company that wasn't even listed on the first site visited. You see, the price comparison site is only as good as the list of companies who agree to link up with it.

In conclusion then, the price comparison site can save you time when you want to get a quote or guide price for a particular service, but this should not be your only point of call. Shop around some more, there may be better prices out there. Use the sites as they should be used, for obtaining just one of several quotes or lines of inquiry, and nothing more.

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