2 Comments

Buy.com, Merchants Keep Their Competitors Near

Aug 7, 2006
by

Good Monday morning. Saw something interesting and wish to elaborate. A few weeks ago, Brian Smith from ComparisonEngines.com discovered that buy.com is offering a shopping comparison tool. BTW, yesterday my friend noticed that Brian Smith has also just discovered me :-)

So, basically, shoppers on buy.com will see a new feature beneath the product detail. The copy states: ALSO AVAILABLE FROM THESE OTHER MERCHANTS , clicking on “shop now” will bring you to the listed merchant’s site. For those without internet access… I took a screen shot for you. Yes. I am the best. I know.

buy (2).JPG

So, as you can see in the screen shot, buy.com is selling a Notebook Carrying Backpack for $16.99. Shipping is free. Then buy.com shows shoppers that the same products are available from Amazon- $39.99, HP $37.66 (+ shipping) & Circuit City- $39.99. In case customers are confused, buy.com has an explanatory link “What’s this?” It says: In an effort to provide our customers the broadest selection in products and purchase options, Buy.com has provided these additional merchant listings which allow you to compare Buy.com’s pricing to other merchants and allow you to shop at those other merchants if you wish to do so. Although we take steps to confirm this information is accurate and up to date, we assume no responsibility for the accuracy and freshness of the price and shipping information provided by third-party merchants.

Now for commentary. It is important to take note that this feature is not available on all product listing. For example, for the pre-ordering of arrested development season three, there are no other merchants listed. Just so you know, I am very much looking forward to its release! It is interesting that buy.com did not issue a press release announcing the launch of their home-grown comparison tool. Maybe they did not want to bring too much attention to it. Why? Because perhaps there might be legal ramifications with listing competitors on your site, without their prior consent. Who knows?

Like JP pointed out, this feature is NOT good for affiliates. It’s the same thing as the homedepot.com advertising. Affiliates are driving traffic to buy.com with the hopes of a sale and then buy.com gives customers the option of shopping at another store. Remember that buy.com also sells ads on their site. That’s strike two in their affiliate relations. Do they credit their affiliates in a scenario where the shopper goes elsewhere? Nope. As stated in the buy.com affiliate terms: No commission may be earned for purchases made from other stores operated by third parties that may be accessible from Partner’s site.

Are affiliates aware of the new comparison tool? Well, last night I spoke with a supercalifragilisticexpialidoceous affiliate who told me he will be minimizing his partnership with buy.com on account of this latest affiliate snag. That’s all from the affiliate perspective. Now we discuss big picture.

Me? I think this is wildly exciting and innovative. Merchants are getting much smarter. Many shoppers visit a comparison site before making a shopping decision. Buy.com is simply capitalizing on this fact by creating a shopping comparison feature that they control! I think that this will increase conversion rates for buy.com . This parallels what google is doing with their shopping portal; they are simply eliminating the need for affiliates by offering their own merchant coupons. Don’t forget that many merchants have had links to bizrate & shopping.com on their homepages for YEARS…without ever figuring out how to make it work for them (besides for the customer reviews).

For consumers, this is equivalent to online shopping 2.0 . Information and content is key. We all are offline shoppers. Many stores, Walmart included, display their lower price together with the “Compare At” or the “Recommended Price” tag. The only difference is, while stores merely show a different price, here, buy.com is listing actual merchant prices with links to their sites. Transparent competition is golden for the consumer.

Another advantage for buy.com is that by listing competitors, this should enhance their natural search results! Imagine making a search for an amazon.com product…only to have it show up Buy.com. (FYI, the same thing already exists in reverse for retails that have merchant relationships with Amazon….)

Filed under: Internet Strategy
  • Jonathan (Trust)

    "Affiliates are driving traffic to buy.com with the hopes of a sale and then buy.com gives customers the option of shopping at another store."

    That's not entirely accurate. Traffic from affiliates don't see that. Try going to buy.com via an affiliate link. I don't like any leaks at all. I remember when they introduced YUB and they made it so affiliate traffic doesn't see it but direct traffic does.

  • http://adjungle.com Brad Waller

    I have not checked out a ton of products, but could they be only showing you comparison prices when they are a good deal. In your example, only an idiot would buy somewhere else. I did find a few examples where J&R was a few percent cheaper.

    But no matter, I think it is a smart idea. Shoppers are already doing this, so they are keeping them on their site longer. Some buyers actually pay a few dollars more to only have one transaction, and Buy may be banking on their variety and stock to beat out the merchants with lower prices. Buyers also often will pay a premium to buy from a trusted source, so being the low price leader is not required.

    Ovarall I would say that it will help Buy.