When comparison shopping on the Web, you may be surprised to discover that
some of the sites you are comparing are actually from the same company.
Why are companies doing this?
I first came across this situation when shopping online for a projector to
connect to my laptop for use with training classes and seminars. I had already
done my research to decide on the model and was using Google to see what pricing
was available on the web.
After viewing some of the sites identified by the search engine I had a nagging
feeling that there was something similar about these sites that I could not
quite put my finger on. Then I figured it out. The wording of the warranty
information for the projector was exactly the same at one of the sites I had
already visited.
That makes sense, my brain was telling me, since the information probably
comes from the manufacturer. But there was more. Going back and forth between
the two sites I noticed that links on the bottom of the page were very similar.
Then looking further, it couldn’t have been more obvious. The street
address for these two sites was exactly the same.
How could this be? They each had a different company name, web site and toll
free number. Even the pricing on each site for the same product was different!
Playing detective, I called the toll free number of the higher priced site.
My call was promptly answered, and after telling the representative what product
I was interested in, received the same pricing that was on their site. When
asked if that was their lowest price, he told me it was.
I then asked him about the site with the same address that had a lower price.
He informed me that while they shared the same address, and even some business
policies, they were completely separate companies, with different levels of
customer service.
True to his word, when I called the lower priced company, I was on hold awhile
before a person actually picked up the call. He confirmed the company differences
and explained how they had fewer people in both sales and customer service.
For the lower price, they expected most of the orders to be placed online.
Using this strategy, the two companies are more closely able to match the
level of service performed to the price they are charging for the item. Want
a fast response when you have questions or a problem? Buy from the higher
priced company. Want a lower price? Deal with a little less customer service.
And, yes, there will always be some people that call the higher priced company
for information and then place their order at the lower price site. But that
would have happened anyway. This is no different than what brick and mortar
retailers face everyday, except that the cost to set up this “alternate” store
is only incremental on the web.
But this should come as no surprise. We have recently been fielding more
requests from clients (usually manufacturers,) that are looking to reach markets
that they feel are currently underserved by their existing sales channel.
If you would like to discuss how this type of situation may benefit your
company, give us a call. We’ll be happy to discuss the options you may
have available to you.
