Timing is crucial, try to monetize too early and you could stifle the demand, leave it too late and it may become harder to charge for your service.
Despite the huge popularity of price comparison sites, new comparison website development is still big business, and there are a lot of niche markets that remain untapped. In this era of online shopping, consumers love the fact they can save themselves time and money by comparing products and prices from a range of suppliers on a single site.
If you are considering building a price comparison website, there’s no denying that you need reasonably deep pockets to start with, but the good news is, if you monetise your comparison website correctly, you will soon begin to see a return on your investment.
When you build a price comparison website, your business model needs a plan on how you will make money from the site. Timing is crucial, try to monetize too early and you could stifle the demand, leave it too late and it may become harder to charge for your service.
There are a number of options to consider and the route you take will very much depend on your market, your audience and the suppliers that you are promoting. Here are your main options:
Advertising is one of the most common ways for comparison sites to make money. Selling advertising space for banner, display and text adverts will bring in a steady stream of revenue. If your price comparison site is targeting a niche market, then there will be plenty of brands that you can approach directly.
An alternative option is to set up a Google AdSense account. You can dictate where adverts appear on your site and the type of advert, i.e. text, display or rich media. Advertisers then bid, in real time, for your ad space. This option gives you less control over who is advertising on your site, although you can control categories of advertisers and you can also block ads. For Google AdSense to work, you need to have relatively high volumes of traffic to your site.
Earning referral commission from the affiliate suppliers featured on your site is another popular option for monetising online comparison websites. There are a couple of models to consider. If your users will be making purchases as a direct result of finding a supplier on your site, then Cost Per Acquisition (CPA) is an option. You will only get commission when the user makes a purchase, so you’re taking the risk, and you will need to make sure that your site is intuitive to use and provides all the information a user needs when making a purchasing decision. The alternative option is Cost Per Click (CPC), where every click through from your site to a third party supplier earns you commission. You’re providing the lead and the onus is then on the supplier to close the sale.
Your target suppliers may well already have an established affiliate partner programme that you can sign up to. They will give you tracking links to add to your website, that track click-throughs or sales, as appropriate.
The direct route
If the third party suppliers that you are intending to feature on your comparison site are very niche or do not have Ecommerce capability, then it is unlikely that they will have an established affiliate partner programme. Your only option might be to form an official agreement to receive a percentage kick-back for every sale generated from your site. Obviously the downside of this is that sales and commission are much harder to track and prove.
Another option to consider is to invite third-party suppliers to pay to feature on your site. Again, there are a number of models to consider. You might request a monthly or annual fee, or the supplier might pay for X number of products to be featured. You can also offer sponsored listings and paid posts, where companies pay a more to have their products or services appear at the top of search results.
Charge the user
If your market is very niche and users will see added value in subscribing to your site, then you may be able to charge them a membership fee to access the site and its facilities. In this instance your site should offer real added value and you will need additional budget to market and promote it to your niche audience.
Here at SOZO we have extensive experience of price comparison website development. We’ve been designing comparison sites for over 12 years have worked with some of the largest sites in the UK. If you’d like to learn more about our experience, then visit our price comparison site page or get in touch today.