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[ The PC Guide | The PC Buyer's Guide | Understanding PC Sources, Vendors and Prices | Researching Vendors and Prices ]

Price Search Engines

A final research tool that I want to comment on is the price search engine. These online ".com"'s have become very popular over the last couple of years. The concept is simple: you type in the name of a product and the site provides you with a list of vendors selling it, sorted by increasing order of the price the vendor is charging for the product. The idea is very appealing: in one step you get to see the pricing on any particular product, and then you can choose the vendor that has the best price. Unfortunately, these engines are not always what they appear to be. There are several different problems with them that cause me to not recommend their use by someone looking for a vendor.

The first and most important issue is that these engines emphasize price over everything else, because they list results in order of price. As a result, companies have a strong incentive to provide list prices that are as low as possible, to the exclusion of all other considerations. This results in all sorts of unfortunate behavior, such as intentionally posting low base prices and then charging outrageous shipping and handling fees (very common), or listing low prices and then telling people when they order that the "price was a typographical error" or the "price went up" (i.e. bait and switch). Some companies will also play other games, such as listing prices for refurbished items without making this clear, or offering no warranty, or never having the item in stock and always making you wait a week while they order it--the list of tricks goes on and on.

I'm certainly not saying that all the companies in these engines are dishonest. But many of the ones with the "best prices" get their prices down using tactics that are not in the best interests of the consumer. Even with the honest ones, most engines inherently favor those that provide low prices but poor service, few return privileges and other "intangibles", over those that take a more balanced approach instead of cutting costs at all costs. As I mention frequently, shopping on the basis of price alone is a recipe for disaster, and when you use one of these engines, you are getting a list of vendors based on price. So you have to be very careful.

Another fundamental problem with these engines relates to how they do their searches. While many of their users think they search across the Internet to find the best prices of every vendor around, they in fact typically do not--they only list the companies that are part of their network. In most cases a vendor must pay the engine to be listed, or provide a "kick-back" based on sales generated from the engine, or provide value to the search company in some other way. This basically removes the objectivity of the engine: you're only searching the vendors who are "in the club".

Finally, consider this. If you are a successful vendor who provides good service and great prices, you don't need to be listed in one of these engines to get business. You probably don't have the absolute best prices, and you can't have the best prices without sacrificing everything else that makes you a good vendor. Furthermore, you may not want to be listed if it means you have to raise your prices to cover the search engine's commission. As a result, some of the better, larger vendors never consider certain engines at all, and you won't find them in the results when you use those engines.

Does this mean that I think these search engines are of no value? Actually, that's not the case. I think they are very useful for one thing: letting you see approximately what an item costs. If you search for a product and say, average the first 10 or 20 prices that are returned for it, that gives you a ballpark idea of what the item is worth, and this is useful to know when shopping. Just avoid the temptation to buy from the name at the top of the list.

Next: Vendor Evaluation Factors

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