Product comparison websites are designed to make it easier to get the best price on everything from groceries to smartphones, airfares and credit cards. Unfortunately, most of these services are undermined by the very business structure that they use: a model based on commissions from the companies included in the comparisons.
But one Australian service is changing the comparison game for the better. Quid is launching as a completely independent, impartial service that does not rely on commissions.
“Everyone wants to get the best deal out there and comparing is the way to go. The problem is that many sites are biased towards brands that pay them more money. Most sites don't list products that won't pay them a commission,” the website explains.
“Quid will define a new era in online comparison. Unbiased, transparent and unique.”
This approach is completely different to the current model used by most comparison websites and services – not just in Australia but also around the world.
In order to make money, comparison websites set up deals with specific companies and earn a commission when consumers choose their products off the comparison website. If you were comparing smartphone prices online and the website had a deal with Phone Company X, for example, clicking on the link to Phone Company X’s website would benefit the comparison site. Actually buying a phone at the end of this process would earn the comparison site even more money.
The problem with this structure is that it has started to benefit the businesses involved more than consumers. In Australia, the government’s Consumer and Competition Commission has found that the typical model for comparison websites often leads to:
•Limited or biased comparisons,
•Misleading savings quotes; and
•Heavily promoted or featured products and services that may not offer the best deal for consumers.
These issues are relevant to comparison services everywhere, to various degrees. A look at the Israel-based comparison website Zap, for example, reveals that it features two products at the top of the list, before comparing by price. If someone is short on time, they may click one of the featured options without even realising there are more to choose from.
So even though comparison services are supposed to benefit consumers, the current commission-based model often undermines this intention. Put simply, competition and commercialisation has fuelled a business world where product prices vary significantly between companies and even comparisons can vary based on the website or service that you use.
The unbiased, comprehensive Quid comparisons, however, could change the whole industry. After all, these services should be about giving consumers access to all of the deals available so that it is easy to find the best options for everything.