Shopping Comparison Engines (SCE’s) Big and Getting Bigger

posted on: October 9, 2006

The Growing Trend

The forecast is bullish. Experts predict that by next year 27% of all e-commerce sales will be generated by multi-merchant product aggregators, known commonly as Shopping Comparison Engines or SCE’s. They make it easier for shoppers to find what they want to buy and easier for them to compare prices. Shoppers are expected to use SCE’s to the tune of $54.3 billion in revenues next year.

Merchants sign up with an SCE, then upload their products. When a consumer visits an SCE there is an array of products sorted by price, brand and merchant. This is an advantage to the consumer because of ease of shopping and a high degree of price transparency. The advantage to the merchant is that SCE’s boast attractive conversion rates. But most engines charge for their services, so you have decisions to make.

Pay Per Click Vs. Percentage of Sale

There are three types of SCE’s, although virtually all fall into the basic categories of Pay Per Click and Percentage of Sale as a means of paying the SCE. There is a third type, Froogle.com. Offered by Google, Froogle.com is free. The rest charge merchants based on visits or sales.

Pay Per Click is how it sounds. Each time a potential shopper clicks thru to your site, you pay a fee. While the fees can be very low per click, it is crucial to monitor your visits closely. If your conversion rates on certain products are low, that is if shoppers are looking but not buying, the clicks are costing money and you may want to discontinue listing those products. That can be a real headache. For instance, if you have 500 products and you’re listed on 3 pay per click SCE’s, you could be monitoring 1500 products. That’s a lot of man hours. And in many cases it is difficult to get that specific click information from the SCE’s. In the meantime you could be draining significant profits from your business while shoppers visit who have no intention of buying.

I prefer the Percentage of Sale SCE, which is also like it sounds. The SCE actually sells your item on its site, then pays you a percentage of the transaction.

Summing Up

The key to success with SCE’s is to pay attention. I prefer the Percentage of Sale SCE because it’s low maintenance. Whatever you do remember, if you can’t measure it, don’t participate.