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price comparison websites
Price comparison websites are a relatively new phenomenen.
On the one hand, these sites appear to act as a massive benefit to us, as consumers. But, as business people, they drive down margins and make it very difficult, particularly, for a small business to compete.
For example, I have started my own website: http://www.cruisepricescompared.com
The site allows cruise agents to advertise their cruise offers for free, so they incur no distribution costs, which means it is a risk-free venture for cruise agents and the consumer gets a better deal because the cruise agent does not have to "wrap up" a distribution cost in the price of his ticket.
But on the other side of the coin, some of these agents are fearful of being undercut by one of their competitors, so they start discounting. This all appears great news for the cruise buyer, as he will get the cheapest deal possible.
But where it all ends is that margins are slashed, in the desperate race between sellers to win the booking.
We blame the internet for this state of affairs. But really it is us, as consumers, that create this situation.
As consumers, we greedily demand ever cheaper goods and services and if we don't get the price we want from seller A, we have no loyalty and we will then demand the deal we want from seller B.
I feel this situation may get even more intense as we appear to be at the start of a global recession.
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Contributed by harley van straten on October 4, 2008, at 3:34 AM UTC.
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