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A website I'm currently working on requires there to be both a residential and commercial version of the website.

The two versions will be quite similar across the board, but the copy will have some differences, and the images used will be different. This is to make them more targeted for their particular audience. The difference in copy will generally be pretty minor, maybe a sentence or two on some pages. There will also be a couple of pages that are in the residential version and not the commercial version (and maybe vice-a-averse).

Just trying to think of the best way to do it really.

On the initial visit, the user will be on a landing page and then they choose commercial or residential. From that point on they'll have an option in the menu to change to the other version, but the landing page won't appear again.

I guess the two major issues are what's best for SEO and what's best for the user experience.

Firstly, should I be using the URL to differential the sites (eg commercial.mysite.com & residential.mysite.com or mysite.com/commercial/ & mysite.com/residential), or should I use a session variable to store the version selected. For a number of reasons it seems that using the URL would be best, but then I'm concerned about the SEO implications of this. Would there be a duplicate content penalty?

Are there any other things I should be thinking about regarding SEO specific to the fact I’ll have two versions of the website?

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It sounds like you are about to over complicate things. I certainly would not be creating two sites for this. What is the harm of a contractor seeing residential products and services and vice versa? It is very common that a site lists products and service under two separate pages for this. There is no need for duplicate content this way. Splitting your site up into two sites would be far less effective and the risk of duplicate content would be an issue.

Then you have people like me who are shopping for both residential and commercial products. For example, I maintain several properties which can include boiler repairs and work. I work on boilers for houses and boilers for apartment buildings. I need products for both residential and commercial. When I search, I want to see the parts I need in one site and not jump around to multiple sites. If it is too much trouble and I end up on different sites, I would just say, "Forget it!" and leave.

Let's say I did a search for B&G circulator pumps and Beckett Burners. Do you think two sites with fewer products is going have the same penetration in search and capture my attention the same as a single site with all of the products? No. It won't. Content rules in search. The more you can offer on a single site, the better it will perform.

Do not over complicate things. Simple works- stick with simple. Forget cookies and different sites. Just do what millions have done before, create two buttons and two pages. Simple works.

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    In addition to @closetnoc thoughts, you can control it with user groups which load out needed widget/channel/content. Its pretty common to see something public facing like "contractor price" right alongside "your price", then a fat "sign up for commercial account". You will probably end up with a bit more success since its more visible to the general visitor. Since its a signup thing, you can still mitigate the site once they are logged in as their "approved commercial account" or whatever. Example would be a product page loading the contractor image as priority instead of the consumer image. – dhaupin Feb 26 '15 at 14:55
  • @dhaupin Great points! It is also not so common to see a call for price on the more competitive commercial products where they may not want to telegraph their position in the market. Although the call for price thing is annoying, I understand it. You can have the price shown if the user registers as a business user and then complete the registration if they chose to take the next step and buy. I have seen this a lot too. – closetnoc Feb 26 '15 at 15:11
  • That call for price is very annoying indeed. I think in most cases its a vendor/supplier requirement rather than store policy though. Often they have strange stipulations like "for competitive reasons, you aren't allowed to sell this product online, but you are allowed to list it" or "you can sell this product online as long as you hide the price until they are in cart or logged in as B2B". Never understood why really, but it seems to be a popular thing for vendors to require. – dhaupin Feb 26 '15 at 15:48
  • @dhaupin You are right. It can be a requirement to carry a product to keep the price hidden. Again, I assume it is designed to help prevent the various bots that scrape the net for competitive analysis from gaining too much information so I kinda understand it. It is really annoying. I generally get around this by simply calling, telling who I am briefly and giving them comfort that this is a valid query, then simply asking questions. Most of the time, they do not ask for contact information so I do not worry too much about being marketed to. – closetnoc Feb 26 '15 at 15:58
  • While these are all good comments, they dont apply to this case. The website relates to the construction industry, so 'commercial' basically refers to big apartment blocks and large scale developments of that nature, while 'residential' refers to a single house, apartment, etc. There is very very little overlap, which is why they need to be seperate – Tesla Mar 29 '15 at 14:24

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