Very often we hear people talking about price comparison websites about how cheap they found something on Kelkoo or Pricerunner etc. as if it's some sort of game or contest to find the cheapest possible supplier of an appliance or, well pretty much anything these days. Recently in the UK Whitegoods Forums we had someone on about a new "ethical" website offering a price comparison which looks suspiciously like Kelkoo in disguise advertising all sorts of wares and being backed by some supposed ethical body that purports to be a sort of authority. Now, if this all seems a bit vague it's pretty much because it is very vague. The backing company is an organisation known as the "Ethical Company Organisation" of whom I've certainly never heard and I'm sure others haven't either. In fact, there's little information on them at all on their website that lends any credibility at all other than a few quotes and the fact that they sell a book.
It strikes me that this is more of a marketing ploy than anything of any real value to people and I'll explain why and why I think that all these price comparison websites are a sham.
Price Comparison Sites
I've been on the internet for approaching two decades starting on BBS and newsgroups and I've seen it develop into the behemoth it is today and I saw the introduction of the price comparison sites which, in recent years, seem to have become quite popular. They have become popular because, basically, people are lazy and the search engines became clogged up with poor results. These sites were originally little more than a curiosity really and seemed to be ran by people that only wanted to refer people to the lowest price possible for the good of doing it.
Not so now!
Now we have price comparison sites calling up businesses that have an online presence touting their services and telling us how much power they have in the market to drive business to your site. Of course that has a cost attached, usually in the form of a pay-per-click.
But, I you don't agree to pay the ransom to appear on these supposed public service sites, you don't appear on them, even if the product you sell is better or cheaper than what is available on these comparison sites. Quite simply these sites are businesses and they make money, not by holding any stock or selling anything other than information and web traffic and, with the money that they pay to the search engines, they often appear to be top of the results quite often. That must be costing a fair bit of money so my guess is that this is big business.
The Best Deal
Are you getting the best deal from these websites?
More often than not, no, I don't think that you are. You see they will only advertise merchants that are prepared to pay the fees to get on there and, as with anything in business, the cost of that advertising (because that's what it is) is simply added to the bottom line and you, the customer, pays for that.
Don't make any mistake about this at all, you don't have to be the cheapest to be listed on these sites at all, you just have to be prepared to pay for the listing.
This is why, when you visit these sites and search for something, you are not seeing hundreds if not thousands of different stores for any given product, you only see the ones that are earning the price search engine money through either and affiliate deal or pay-per-click advertising. In other words, they may as well be search engines for adverts and the results are determined purely by who's prepared to pay to be there.
The simple fact of the matter is, you can most likely get a better deal somewhere else from a company that isn't paying to sell products on these sites and, you'll most likely get a far better choice using Google and a bit of effort as well as a better price.
So restricted choice and restricted prices. Not exactly what these sites would have you believe that they offer is it?
But back to the ethical stuff from the start of this article.
What drove me to writing this piece was the fact that this supposed ethical price comparison website was setup to deliver a price comparison search engine that offered people an "ethical"rating, in my case on appliances as that's the industry that I am in, and a search was given for washing machines.
The top results are Whirlpool machines and, not cheap ones either. This struck me as very strange given that, with my industry knowledge, that Whirlpool are one of the most expensive manufacturers on the planet for spare parts and that they manufacture all over the globe. I also know that production of some machines was moved from the US to Mexico due to lower costs and other little bits and pieces that don't exactly lend themselves to being considered "ethical" or environmentally friendly. So why do they top the bill then?
The site states that, "people everywhere are starting to unify their spending power to help persuade the biggest and baddest corporations to act responsibly towards our fragile environment, animals and less fortunate peoples." Okay, so why is the largest appliance manufacturer in the world with not the best ethical credentials top of their recommendations then?
The simple answer has to be that it's a load of rubbish, it's just another marketing ploy to sucker people into thinking that they are doing the right thing when, in fact, they're not.
This gets worse though.
I happen to be a director of ISE Appliances which is probably one of the most ethical and environmentally oriented appliance manufacturers in the world and yet, strangely enough, we don't even get a mention on this ethical and environmental site. Now, I wonder why that is?
The simple fact of it is, ISE don't pay for the privilege of being there, that's why.
So, like all the other price comparison sites it's nothing more than a big advert for companies that are prepared to pay for it, ethics are out the window in the face of profit.
Don't Be Conned
Please, if you've taken the time to read this don't make any mistake, all these comparison sites make money from you using them and buying from the merchants that they promote.
They are businesses that survive merely on serving you adverts for chosen merchants only which limits your choice as a consumer.
Very often better prices or deals can be found elsewhere quite easily with a bit of research.
Ethical, moral or environmental choices should not be made on these sites as they are not in any way, shape or form, independent in their opinion or recommendation.
They do not list every product available.
They do not list every supplier available.
The do want your money just as much as the actual retailer does.
It Isn't Just Us
Recently in March of 2012 Which?, the consumer association, has also started to call into question the notion of price comparison websites. Okay so we highlighted this in 2007 but, the more people that know about what to look out for the better.
Essentially Which? have found what we have been saying for a while about these sorts of websites and, there is absolutely no regulation of them whatsoever.
For more information please see this report from the BBC.