Price Comparision Shopping in Australia – Is it Healthy?

Last week Google announced their online shopping search comparison site is now open in Australia. Using Googles’ expert search capabilities when you’re looking for products is a great way to find the products with the cheapest price, but is price comparison shopping always a healthy way to shop?

It’s fantastic to see such a huge list of products available at Google Shopping. It is only a beta release, but I’m sure it’ll make it easier for all of us to shop online in Australia. With a few clicks and search query you’ll find hundreds of retailers ready to sell you that unique product. If you’re into comparing prices you’ll find hundreds of bargains listed.

I use shopping comparison sites to find products, however I don’t generally use the cheapest price functions, perhaps only for the curiosity of finding a new online store. Personally I find the cheapest prices (more often than not) end up the cheapest in service too. I’ll explain why.

Before I started this business, I used to work for an online retailer. I was all to aware of the shopping comparison web sites, and at the time price comparison web sites was the only way to get the products listed and viewable to more customers than just search engines alone.

Online retailers are unfortunately stuck between a rock and hard place when it comes to shopping comparison web sites. These web sites are designed to have the online stores fight it out with cheaper and cheaper prices, to the benefit of the customers. While it certainly brings more customers to your store, the only way to bring more customers to your store is to show the cheapest price.

What we don’t see is the cost prices of these products, unfortunately we don’t see how much the store is loosing to gain us as a customer. While we’re getting a bargain price for something now, we really don’t really consider the cost of the product after the sale.

I’m talking about customer service to a degree, and perhaps the lack of it to save money on the cost price of the product compared to sale price of the product. If the retailer sells a product at cost price, there’s no money left to spend on customer service, pre-sales enquiries, quality couriers, even electricity bills!

Why should we care? We’ve got our cheap price right? Well, it’s about seeing what happens as a result of buying the cheapest product all of the time. If we buy from the same retailer because they are the cheapest, the other retailers can’t stay open for the lack of sales, and without competition the retailer who was selling the cheapest product can then name it’s own price for the same product.

All of a sudden we can’t buy products anywhere else, and the demand goes up. As the demand for a product with no competition goes up, so does the price and we end up paying much more.
It’s called a Monopoly.

At onlineshoppingaustralia.com.au I don’t think we’ve ever compared prices on the same product, even to the point that it was discussed and we agreed to never do it. Personally I think shopping comparison web sites can be compared to fast food outlets, “they’re a great short term filler for lunch but it’s no good to sustain what your body needs”. From a business point of view, making a sustainable business based on always being the cheapest price is impossible unless you remove the competition.

So where does this leave Googles new shopping comparison feature? Well I hope Google improve the feature beyond price comparison. I will use the feature to find specific products because I have no doubt that Google will index a much larger set of online stores.

Like the other web sites like this, if I find a product that I am shopping for I typically wont simply buy from an unknown retailer for the sake of saving of a few dollars. Saving hundreds of dollars is a different story and in this case I think it’s best to weigh up the delivery costs, stock availability, store reviews and go from there. Cheapest isn’t always the best value for money.

Googles new shopping store is going to be popular feature I’m sure. Despite my complaints about price comparison and it’s ill side effects, I’m confident Google have bigger plans than just comparing prices. Features such as stock availability and customer store review comparisons to level out the competition would be more beneficial to everyone involved, and not just for online shoppers looking for the best price.

If you’re interested in taking a look at Googles new shopping web site for Australia check it out with the link below. The service is free and available now as a beta / test version.