Mobile Price Comparison.
Last year social networking sites seem to be the vibe, despite no
definable business model. Today, hardly a month seems to pass before
another mobile price comparison service is announced.
UpSnap are the latest to launch
with their "Scrooge Buster" in the US. But unlike other competitors,
this one is free, apart from the cost of the sms you send them. This
neatly circumvents one of the key problems with price comparison - mean
people don't like to pay for things :-)
To use it, you simply sms them the make and model of the product.
They search their database for the best prices and sms you back. You
can then request that you're put through with a voice call to your
merchant of choice.
The business model behind this is not very clear apart from that
they make their money from the merchant, not the user. So they either
charge merchants to be included in the results they sms you, or they
charge the merchant for putting you in touch with them with a voice
call.
If they charge merchants for being included in the search results
(like Google's AdWords), it's not much use unless the merchant is also
offering the lowest price. If people use a price comparison tool, it's
pretty unlikely that they'll choose to buy a product from a more
expensive supplier. So, unless the merchant thinks she's going to be
the cheapest, it's a pretty useless advertsiing medium.
If, on the other hand, they make money from connecting the user to
the retailer they choose, they have a massive logistical issue as they
need to sign up to their service every merchant they list. And if they
don't sign up every merchant, they're not delivering their promise
(finding the cheapest) to their users.
And anyway, I imagine only a relatively small fraction of people
will choose to be connected there and then, meaning revenues are going
to be significantly lower than you might think.
Hmmm. Am I missing something? Or is the price comparison game not such an easy one to crack?
[The Mobile Technology Weblog]
2:56:44 PM
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