Great move on Buy.com’s part for a few reasons:

1) Found in the “What’s this” link: “…allow you to compare Buy.com’s pricing to other merchants” – This unequivocably shows the customer confidence Buy.com’s pricing. This move takes Buy.com from a shopping destination to a shopping portal. A potentially very significant shift.

2) A wise man once clued me in a few years ago about the true nature of the internet being about distribution. Buy.com’s move is both an offensive move (as mentioned above) and a defensive move (start all shopping here) and gets Buy.com into the distribution game. This will prove to build customer loyalty over time and look for other traditional shopping destinations to do the same – look to the pure plays first Overstock.com would be a good candidate. One could argue that Buy.com is copying Amazon’s Merchants @ efforts albeit delivered in a more transparent UI.

3) Buy.com’s marketing costs will be lowered by not having to be reliant on the comparison engines of the world. Let’s assume Buy.com is spending 5 – 15% of revenue on marketing depending on the category (Conversion, average order size and click thru rates are also critical factors) they can pocket some of this money and the balance to buy other targeted traffic – see 4 below to see why this is interesting.

4) Creates an additional stream of revenue – golden click-based revenue – which converts at orders of magnitudes higher than order-based revenue. It would be nice if in future earnings reports if Buy.com will break out “site revenue” (revenue generated from orders on their site) from “syndication revenue” (orders generated from sending traffic elsewhere). What I love about this is this puts a “traditional” merchant in the same game as his marketing “partners” – the comparison engines – that game being click arbitrage off the search engines.

5) It will be interesting to watch for any ‘blow back’ from Buy.com’s affiliate marketing channel. Buy.com is a voracious affiliate marketer that demanded their own small army of support from CJ after switching from Linkshare (supposedly due to non-payment) to CJ. As a Buy.com Affiliate the problem is that the affiliate could be sending order dependant traffic to Buy.com which doesn’t convert, but ends up converting on a syndication merchant from the comparison grid. The impact would be a decrease to the Affiliate’s Earnings per Click and ultimately cost the Affiliate money. A great way around this would be for Buy.com to share the click revenue (if any generated) with the affiliate who drove the traffic during the same session – I would remove any latency from the equation.

Great tip Brian, please keep the scoops coming as most of your comrades in the blogging world keep cycling the same stories.

I had often pondered whether it would be an interesting model for merchants to list comparison pricing information while creating an additional revenue source. I thought if I mentioned it people would think I was nuts though!

Nice tip Bri, take a screen shot next time please!

Yes, I know…I almost always take screen shots. Didn’t think it would get taken down!

I see it.

http://www.buy.com/retail/product.asp?sku=202294040&loc=105&sp=1

Whatever happened to yub.com? I thought the idea was cool- very Web 2.0 in the early days? But you never hear boo about it…and it’s not promoted on the new buy.com site…

Yub.com is just like Jellyfish.com in terms of the cash back/commission sharing scheme, which has been mentioned a few times (or maybe it’s the other way around? Don’t know which company came first

http://www.comparisonengines.com/2006/06/28/guest-commentary-by-harrison-zanuck-jellyfish-cash-back-shopping-for-the-masses/

I still don’t see it…? If you see it, take a screen shot please!

Morra- Yub was a great idea, and it existed before the social space became so hyped. But I think Yub.com missed a few key parts in their business model, especially in the “2.0″ realm. The site itself is rather clunky as well. Perhaps also it is because Buy.com has always been much more of a follower rather than an innovator.

I don’t think it’s completely an “extra revenue from secondary clicks” play. Look closely, the primary merchants shown have a higher price… psychologically speaking, a user would see that and think twice about buying it from the competitor.

Buy.com needs to be careful because by doing this they’re opening up a leak on their site for affiliates. Many affiliates send customers to Buy.com hoping to earn commissions on sales through the Buy.com website, but if the customers end up purchasing at Circuit City for example their affiliates will be very upset not to be compensated.

Hey Brian, great job finding this. I’ve got a screenshot up:

http://arul.blogs.com/interaction/2006/07/buycom_comparis.html

For those pointing out the affiliate issues – I agree that it’s a real concern, but I applaud Buy.com for at least testing the waters here. This and Yub are great experiments for Buy.com as they start to learn how to be a customer oriented company. Of course, the key with any experiment is incorporating the knowledge you gain into your next endeavor, so we have to wait and see if this move will benefit Buy.com in the long-run, but I think they’re on the right track here.

I think the reason that everyone is having trouble finding the buy.com price comparison engine is that its only dispayed on products they are selling at the lowest prices.

For instance if you slect the ViewSonic VG2021M listed on their homepage buy.com lists 3 other places you can buy it, they have the lowest price. If you perform the same search on pricegrabber there are four vendors listed that beat buy.com’s selling price.

Great thread here… A lot of interesting thoughts and information.

The affiliate marketing perspective is definitely something that Buy.com needs to consider. However, in one manner it’s similiar to a “sponsored links” (Google Ads) section seen on Buy.com search pages (except much more relevant of course). Affiliates aren’t credited for clicks to those links eithier.

I followed 3putt’s advice to the ViewSonic VG2021M. Interestingly enough if you Refresh the page, different merchants are shown sometimes. B&H was actually lower than Buy.com’s price. Rather than the matter of price, it is probably more of how much CPC the merchant (via PriceGrabber ?) is paying and whether they are a featured/trusted merchant or not.

Thanks for the screenshot post Arul.

As companies try to “corner” the Internet marketplace you will see lots of experiments like this and it should get really interesting. But it seems the more companies like buy.com try to narrow what a consumer sees they may only succeed in driving traffic to other price comparison sites that have a more open format. A site I’ve been keeping an eye on http://www.kulist.com seems to have an interesting model and functionality that could be what consumers are driven to when they are not seeing the whole picture from a merchant based PC site.