Can You Really Use Google to Benchmark Purchases?

From a procurement perspective, a search engine is still a long way from being a satisfactory benchmarking tool. In this advisory piece, Al Nagar, head of benchmarking, Mercato Solutions, discusses how buyers can navigate best price. For more insightful thinking visit KnowledgeBus.

It’s not surprising that almost nine in ten of us will now use a search engine to look up information on a product prior to making a purchase. An office manager, for example, might compare the price of USBs online before heading out to the local stationery store to purchase them. Google calls this action the ‘zero moment of truth.’

This ability for the average consumer to do a quick price check on a search engine or price comparison site has undoubtedly had an impact on the prices resellers are able to charge for products. In fact £650 million every year is being taken in commission by price comparison sites with more than 20 million users.

But while this has had a huge impact on how we compare the prices of our personal purchases, it has so far failed to serve as a satisfactory benchmarking tool in the business world – not least because the first price you see on the screen is unlikely to be the trade price and may not actually be achievable in reality.  And as for the volatility of the IT market, trade level pricing rarely stands still.

The next best thing

Too often we’ll find the exact item we’ve been searching for, at what we think is perhaps a trade  price to compare against, only to discover that it’s out of stock, the listing is archaic and the price is far from trade level.

This isn’t necessarily administrative negligence on the company’s part, as leaving out-of-stock items on their sites can actually be in their best interests. If it pulls buyers onto their pages in search of one specific item, the company can then encourage them to continue their search, redirecting the buyer to the next best alternative – which may be at a higher price.

Comparing apples with apples?

Using a search engine as a procurement tool can also be a hindrance when online resellers don’t offer a complete description of the vendor’s products online. By excluding the vendor’s part code, for example, you may end up comparing the prices of two very similar products, believing them to be the same.

But subtle differences, such as one being last year’s model for example, could lead you to pay well over the odds, despite thinking you’ve snapped up a bargain.

Resellers also bundle products into packages, which include additional service charges, making it even harder to compare prices for individual items.

Too good to be true

Finally, it is an unfortunate fact that some things are too good to be true. And, to get the level of trust you desire it may be necessary to pay a premium. If the low price is ringing alarm bells and you don’t trust the seller, step back and ask yourself why the product isn’t available for the same price from its competitors.

Is it an original product? has it been reconditioned? or is it a ‘grey’ product previously destined for another European territory? Is there a chance that it could be counterfeit? Has it been imported from outside of the EU? Products purchased from Asian countries, for example, may leave you unable to register the warranty or unable to return the item should it need repairing.

If you’re operating to a tight schedule and need your items when the reseller has promised, what assurance can you get of a refund should the product fail to arrive, or if the delivery is delayed due to an item being out of stock?

Optimum value

We all know that the internet is a great source of price and product information, but for true benchmarking, procurement experts should rely on a supply chain benchmarking tool. These not only save a huge amount of time and energy searching online, but they also deliver validated and trustworthy results that professionals can rely upon.

First Voice

  1. alain alleaume:

    I fully agree in your comments ; I would add an other comment regarding catalogs items. In some demos of eProcurement vendors they are delightfull to show you how you can pick up items from the Amazon website, compared prices, select and add it in your shopping cart as a kind of punch out catalog. Maybe the product is well known as a “on the shelf” product and you are not facing discripancies as you mentionned using Google, but in a sense it seems for me that companies allowing such practices are going backward regarding internal rules and purchasing policy compliance

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