Business ideas for 2014: Niche price comparison website
Consumers want the best prices on everything from taxi rides, to bicycles, to pet food, making 2014 a great time to capitalise on the price comparison business model
We’re all familiar with comparison sites such as Go Compare, Moneysupermarket.com and Comparethemarket.com, which have grown to become multi-million pound companies.
So starting-up in such an established market might appear counter-intuitive. However, with several verticals not yet targeted, 2014 is the year that niche price comparison engines become big business.
Starting a niche price comparison website: Why it’s a good business idea
Operating as an intermediary between the seller and the buyer, a price comparison platform serves as a valuable tool to help consumers find the right product or service at the right price.
Currently dominated by insurance and utilities specialists, the comparison industry has grown to an estimated worth of £1bn and there is space in the market if you can identify an innovative solution to a problem and ensure that there is demand for it.
Entrepreneurs are already experimenting with different ideas including broadband, alcohol, tasks and food, demonstrating the popularity and opportunities of this business model. Some, such as Broadbandchoices.co.uk has been around for nine years, although was called Consumer Choices until broadband became its entire focus in 2012.
If you think you have a great niche for a comparison site, experts such as Graeme Sandwell, from affiliate network paidonresults.com, suggest moving quickly “as it is becoming a crowded sector, for very good reason.”
Niche price comparison website business opportunities
Typically an affiliate-based business, comparison sites offer an additional marketing channel to help companies engage with, and attract, customers.
The main source of revenue for comparison marketplaces is generally Pay Per Click (PPC) advertising or Cost Per Click (CPC) advertising; whereby a business pays for each click-through to their website.
There are several other revenue streams you can incorporate such as banner ads, commission made through your site known as Cost Per Acquisition (CPA), sponsored links and paid posts; where companies pay a monthly fee to have their products or services appear at the top of search results. The key to a successful price comparison site is to establish a strong client base so good PR and competitive affiliate fees are integral.
Costs of setting up a comparison platform depend on the functionality of the website and how advanced you want your price engine to be. Most sites generally require a high level of coding and technological expertise so it is best to hire a web developer to assist you. However there is price comparison software on the market which can be used for set up purposes such as Zebra.co.uk.
Niche comparison sites have proved an attractive investment opportunity of late with several start-ups securing early-stage investment including laptop price comparison specialist Swogo, which secured £60,000 last year, just two months after its official launch.
Who else has started a niche price comparison website?
In recent months there has been a rise in niche comparison start-ups to facilitate consumer demand. Early-stage businesses such as Compare and Share, Swogo and Bikmo have successfully identified new areas within the market and are scaling fast.
Some comparison sites are even looking for entrepreneurs with ideas for other verticals to work with them; Bikmo for example is offering to share its platform and technical knowledge with start-ups looking to launch in the industry.
David George, CEO of Bikmo:
“Price comparison is going to be huge in 2014 – do it right, and it saves your users time and money, making their lives easier so that they’ll come back time and time again.
“Any business model you use, CPA, CPC or paid posts, are all volume based. Generate 10 leads and you’ll make pennies, but create something awesome which adds value to their user experience then they’ll remember it, they’ll return and your bank balance will rise.
“Above all, don’t be mediocre. Don’t expect by putting a few links on a website that you’ll make millions. Understand your market, how you can make noise, and innovate.”
James Greenbury, CEO of Parcel2Go.com:
“With consumers increasingly looking online to find the cheapest deals, comparison websites offer strong and sustainable growth potential – particularly for those who act quickly.
“At Parcel2Go.com, the number of active users has risen by over 400% since 2008. As more and more people cotton on to the savings available online, this trend is only set to continue.
“Working with a range of companies grants a vast amount of industry and consumer insight, which is an incredibly useful tool for businesses both new and established, thus helping your business to stay ahead of the game.
“With the continuing rise of e-commerce and increasingly accessible software, there’s never been a better time to start a comparison website.”