Posted 08/01/2021 in Family Finance

Price Comparison Saving Technique for Products and Services


Price Comparison Saving Technique for Products and Services

Price Comparison Saving Technique for Products and Services

In this article we have shared our recommended Top 14 Ways and Methods to Save Money.  The #1 technique on that list is Price Comparison.  One might think "Duh! Everyone knows how to compare prices, everyone does it, and there is absolutely nothing new one can learn about this method!"

And one couldn't be more wrong.  Let's jump right in.


Table of Contents:

  1. Shopping for Products
    1. Product Price Comparison When Shopping Online
      • Our Recommended Online Product Price Comparison Engines
    2. Product Price Comparison When Shopping In-Store
    3. Product Marketplaces
  2. Shopping for Services
    1. Services Lead Generation Sites
    2. Services Marketplaces
    3. Hybrids of Services Lead Generation and Marketplaces
    4. Most Popular Online Pricing Tools for Different Types of Services


Price Comparison has been made easier by various online tools and apps.  The only problem—most of these online tools are created to do physical Product price comparisons.  But did you know that up to 80% of an average American family's expenditures is spent on Services, not Products?  So, if you want to save real money, you need to focus a lot more on saving on Services, not just on Products.

Comparing prices of Services is usually a lot more difficult than comparing prices of Products.  Why?  Because unlike Products, Services are:

  • A lot less standardized and thus much harder to compare,
  • Much harder to measure,
  • Significantly more impacted by the "human factor."

The good news though is that because of these reasons Services also offer a much bigger opportunity to save money.  But first things first.


Shopping for Products

Even though Products account only for 20% or so of an average American family's expenditures, because Products are easier to price compare, and also because it is a lot more fun to shop for Products (especially such goods as apparel, electronics, and such) people tend to spend significantly more time price comparing Products than Services.  With online shopping now accounting for up to 80% of some physical Product category sales (for example, computers and electronics) we'll focus on online product price comparison tools in our further discussions.  Such online (and mobile app) tools can also be used for in-store (aka "offline") shopping as well.


Product Price Comparison When Shopping Online

When shopping for Products online you should always look at as many retailers as possible to find one with the best price (assuming all other things that are important to you, like vendor reputation, delivery times, customer service, etc., are acceptable).

If you are dead set on a specific product and would not consider any alternatives, the key when making price comparison is to ensure you are comparing apples-to-apples and not apples-to-oranges.

When it comes to physical products the best way to ensure you are comparing apples-to-apples is to use, whenever possible, what is known as "unique product identifiers."  There are several types of unique product identifiers that exist:

  • UPC codes (outside of the United States it is better known as EAN codes), 
  • ISBN (for books), or 
  • MPN (Manufacturer Part Number)


Figure 1:  Examples of the UPC, ISBN, and MPN Codes


Well, that would be ideal.  Unfortunately, vendors are not in the business of helping shoppers to make price comparison as easy as possible.  Actually, in most cases they are highly interested in the opposite:  to make apples-to-apples price comparison for shoppers as difficult as possible.  But using some of the tools you can still do that.

  • Online Tools,
  • Mobile Apps,
  • Manual Price Comparison.


Our Recommended Online Product Price Comparison Engines

We have tested a dozen or so online Price Comparison Engines and picked the best three that will not only help you save money but also will help you save time and frustration from using the other Price Comparison Engines that don't work as well. 

To help you narrow down the Price Comparison Engines that are worth using (and separate those that have proven to be either sub-par or completely useless) we have conducted a pretty extensive research and comparison to see which of the Price Comparison Engines performed best across 4 key criteria:

  1. Accuracy of search results
  2. Ability to find the market's BEST offer
  3. Range of returned retailers, and
  4. Results ordering from the lowest to the highest price

And then we scored the usefulness of each of the online Price Comparison Engines on a 1 to 10 scale (10 being the best) based on these four criteria across 3 product categories:  Health & Beauty, Sports Equipment, and Electronics.

Here is our "Recommended" as well as "Not Recommended" lists of online Product Price Comparison Shopping Engines:


Table 1:  Recommended Online Price Comparison Engines that Work Best*

Rank #

Online Product Price Comparison Engine

Hyperlink

Rating Score

(10=Best)

1

Google Shopping

https://shopping.google.com

8.8

2

Bing Shopping

www.bing.com/shop

8.8

3

PricePirates

www.pricepirates.com

7.5

*NOTE:  Comparison was done in June of 2021 and will be updated on an annual basis.

To our surprise the gap in the rating score between the best top-3 Price Comparison Engines and the bottom 9 is actually quite big (the number #3 PricePirates with the score of 7.5 is more than 2x better / more useful than the number #4 Yahoo Shopping with the score of just 3.1).  The good news though is that when the top 3 winners are so clearly separated from the rest of the pack, it will save you a lot of time and effort on not trying the useless or the nearly-useless price comparison engines and only use these top 3 when doing your price comparison research.

Here is our list of Not Recommended price comparison engines.


Table 2:  Not Recommended Price Comparison Engines that Failed Testing*

Rank #

Online Product Price Comparison Engine

Hyperlink

Rating Score

(10=Best)

4

Yahoo Shopping

https://shopping.yahoo.com

3.1

5

PriceGrabber

www.pricegrabber.com

2.5

6

BizRate

www.bizrate.com

2.4

7

ShopZilla

www.shopzilla.com

2.4

8

Pronto

www.pronto.com

2.0

9

Shopping.com

https://shopping.com

2.0

10

ShopMania

www.shopmania.com

1.5

11

Become.com

www.become.com

1.6

12

CamelCamelCamel

www.camelcamelcamel.com

1.1

*NOTE:  Comparison was done in June of 2021 and will be updated on an annual basis.

And below is the same data in the graphical form for readers who like visualizing the data.


Figure 2:  Effectiveness Rating of Price Comparison Engines (Source:  CouponFindr.com analysis)


Product Price Comparison When Shopping In-Store

When shopping in-store it is a bit more difficult to do side-by-side price comparison. For one, to compare a product price between store A and store B one has to drive from A to B to do that. And that takes time.  Fortunately, as more and more retailers and vendors start charging the same price for the same product online as they do in-store, a growing number of shopping apps can help avoid driving around the physical stores to do the price comparison to find the best price.

Here are some of the mobile apps that can help do a quick in-store price comparison.  To use these apps for in-store price comparison though you do need to make sure that retailers do have the same price online as they do in-store.  Some still don't.  So you need to be careful about this.


Product Marketplaces

One of the best ways to ensure you are getting the best price for a product is to shop at what is called an online Marketplace.  Marketplace is just a fancy word for an online bazaar where buyers can see a huge number of sellers and their offered products all at once, shop around, compare prices, and select the best deal.

The benefit of shopping (or at least checking out the prices) on an online marketplace is that due to high level of competition among numerous sellers you are more likely to get the best deal in the market.  Don't trust any single marketplace to be the best though.  Neither Amazon.  Nor Walmart.  Nor eBay.  Not any other one.  They all have pros and cons.  So, if you want to get an absolutely best dealfirst compare prices across at least a few online marketplaces, write them all down on a piece of paper (or better enter the prices into a spreadsheet) and pick the best one across several marketplaces.

Different marketplaces focus on different types of products.  There are broad marketplaces that focus on everything you can imagine for your home and personal consumption, like Amazon, Walmart, and eBay.  There are more narrowly focused marketplaces that cover some specific categories, such as electronics (e.g. NewEgg, BestBuy). And there are also marketplaces that focus on durable goods such as new or used cars, RVs, boats, etc.

Below are some of the more popular marketplaces for nondurable and durable goods:

Nondurable goods:

  • Amazon.com
  • Walmart.com
  • Overstock.com
  • NewEgg.com (for electronics)
  • BestBuy.com (for electronics)


Durable goods (new and used):

  • AutoTrader.com (for cars)
  • TrueCar.com (for cars)
  • CarGurus.com (for cars)
  • RVTrader.com (for RVs)
  • RVT.com (for RVs)
  • ATVTrader.com (for ATVs)
  • Boats.com (for boats)
  • BoatTrader.com (for boats)


Shopping for Services

Products are only one part of what an average American household buys every month.  80% of the U.S. economy is actually not Products (like groceries, gadgets, or apparel), but Services (like telecom, entertainment, hair & nail salons, banking, travel, insurance, home and auto repairs, and others). 

When shopping for a Service it is also important to do as much (or even more) price comparison as possible to ensure you get the best possible deal.  Unfortunately, unlike Products, which are relatively easy to compare between retailers (because they often have a "unique product identifier" such as UPC, EAN, GTIN, MPN, etc.) Services are more difficult to compare (since they don't have such identifiers).

To be able to compare prices on Services one would need to make sure that that the Services one buys are exactly the same across different vendors.  In most cases they are actually not the same.  One of the main reasons is that many services depend on humans who provide them. And humans who provide those services have varying skills, experiences, and expertise, have different personalities, attitudes, and communication styles.  They also could be in a good or a bad mood this morning.  And all of that has an impact on the quality of the service we get.  This makes Services apples-to-apples comparison a lot more difficult.  But not impossible.

Before we jump into the Services price comparison discussion it is important to acknowledge that there are literally millions and millions of types of Services that people buy.  They range from babysitting to pet grooming, from auto repairs to roofing, from airfare to online entertainment, from wedding or birthday parties to furniture upholstery.

Because of such a huge variety of services and because of lack of any standardization one also has to deal with a lot more variety in available online price comparison engine tools as well.  And for many services such price comparison tools simply don't exist.

So in order to save money you'd need do quite a bit of homework and research to understand:

  • How vendors price their services,
  • What material and labor components (and at what cost) are included in these services (see also Method #11 "Unbundling & Decomposition" for more hacks on this), and 
  • Whether such material and labor components are priced competitively to give you the best price in the market.

It is quite difficult to compare prices on every single service that families buy.  But doing that on the higher expenditure services can save you a lot more money each year compared to what you can save when doing the Product price comparison that we discussed above.  Why? Because, remember, on average we spend 80% of our money on Services and only 20% on Products.  So, saving just 20% on Services is 4 times better than saving 20% on Products.

Online there are three different types of tools that allow to do Services price comparison:

  1. Lead generation (aka lead-gen) sites,
  2. Marketplaces, and
  3. Hybrids of the above two.

What's the difference?  


Services Lead Generation Sites

Lead-gen sites basically ask you to fill out a form describing what you are looking to accomplish:  find a home loan, get a health insurance, find a mover from one city to another, etc.  Once you have completed the form, the lead-gen sites invite a limited number of service providers to make their offers to you. 

The key word here is "limited"!  It is a little secret that you must know—such lead-gen sites take a commission off of any purchase you make.  There is nothing wrong with earning a commission.  It is actually a normal practice.  The issue is that the lead-gen site allows to bid on your business only to those companies who have agreed to pay their commission.  And because they limited the number of bidders, the bidding companies may or may not be the most competitive players in the market.  And thus you may or may not get the best price in the market as a result.

So, if you want to get the best deal possible make sure you try multiple lead-gen websites to get a better sense of what the best price in the market is.  Don't just jump at the first lead-gen site or worse, the first vendor you find.

Here are a few examples of such lead-gen websites listed alphabetically:


Services Marketplaces

Unlike the lead generation sites, marketplaces show you multiple offers and prices of the offered services without you having to fill out any form upfront.

You can browse the offers, compare them side by side, sort them by the lowest price or some other features such as vendor reputation (number of review stars), offer recency, and other relevant criteria.

There are several advantages of using the marketplaces (if they are available for the service you need) compared to the lead-gen sites.  They offer:

  • A full price transparency,
  • Typically a much bigger number of vendors and offers, and 
  • A more competitive nature of such marketplaces (because vendors know their prices are all displayed out in the open, completely visible to the entire Internet buying public).

So, given a choice, marketplaces usually offer better pricing than lead-gen websites.

Not all services have marketplaces though.  Those services that are a bit more "standardized" (like for example air travel, car rentals, hotels, and vacation rentals) have multiple marketplaces, such as (alphabetically):

The travel industry even has what is known as "reverse auction" marketplaces, such as Priceline.com. 

Other types of services in which marketplaces are pretty popular and widespread include:

  • Care-type services, such as babysitting, pet sitting, senior care, etc.,
  • Cleaning services, such as home cleaning,
  • Tutoring services.

Some other less "standardizable" services that require either information about you, as a consumer (your location, where to and from you are moving, your credit history, etc.), or about the object of the service you are seeking (house you want to repair, car you need to fix, etc.), or both (for example, your driving history and the type of car that you want to insure)—such services typically don't have "marketplaces" but mostly have lead-gen websites.  And it's safe to say that most of the services people buy fall into this less "standardizable" category.


Hybrids of Services Lead Generation and Marketplaces

There are also marketplaces that combine offering the predefined and prepriced services with customized lead-generation-based ones.  Here are a few examples of such lead-gen / marketplace hybrids:


Such hybrid marketplaces commonly have a number of predefined tasks that listed vendors can do (mowing a lawn, assembling furniture, babysitting, etc.).  The listed vendors also typically list their hourly or annual rate, which allows you to roughly estimate what you'd pay for the task or the job.  And in most cases you can either simply select one of the listed vendors / service providers or, like in a lead-gen site, specify the job details and get a few bids from which to pick.


Most Popular Online Pricing Tools for Different Types of Services

Here are some examples of the Service price comparison tools.

Home Repair and Improvements:


Auto Repair:


Insurance:


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