|Lesson 5||The Brokerage model |
|Objective||Identify the various brokerage Models.|
Brokerage models can be applied to both B2B and B2C businesses, although some are more suited to one or the other.
Variations of the B2C model
A broker will usually take a commission for transacting business on behalf of others or for introducing buyers and sellers. There are many variations of this model that can be used by eBusinesses. Some are adapted from more traditional business models and some are unique
to eBusiness. Here are seven of the more common types of Brokerage models. Examples of each are described in the MouseOver below.
The Buy/Sell Match model
The Buyer Aggregator model
The Buy/Sell Match
model concentrates on fulfillment of buy/sell
transactions. In many cases, this is based on a traditional "brick-and-mortar" business with a Web extension. This model can be
applied to financial and insurance brokers and to travel agents. eBusinesses based on this model work on high-volume, low-markup
transactions for which they charge a broker's fee.
The Classified Advertiser model
The Buyer Aggregator
model brokers transactions on behalf of a
group of buyers with one or more sellers.
The grouping of buyers allows for greater purchasing power and thus reduces costs for each of the grouped buyers.
Sellers may pay the broker a fee based on a percentage of the transaction value. This model can be applied in either B2B or B2C applications.
Not unlike classified advertisements in a newspaper or magazine, this broker charges a fee to the advertiser based on the time period and/or size of the advertisement,
regardless of whether or not a sale results. The broker may also offer search and rating services.
The Virtual Mall model
In this model, a broker sets-up a site and rents out virtual space to many online retailers or eTailers. The broker may offer a variety
of additional services to the stores, such as advertising and marketing, search facilities, advice, and even store-development platforms
with transactional services.
The Virtual Mall Intermediary model
The Auction and Reverse Auction broker
The Virtual Mall Intermediary
model is very
similar to the Virtual Mall model, but takes it a step further. The Virtual Mall Intermediary broker locates multiple suppliers of a
product, and then sells the product online from an eStore or virtual mall. The broker handles the online transactions and may initiate
the billing, shipping, and tracking of the order. In some cases, the actual supplier of the goods is not identified to the buyer. S
Auction and Reverse Auction brokers
Directory and Evaluator model
are another type of B2C Brokerage
model. Adapted and expanded from a traditional business model, an Auction broker offers goods and services from one or many resellers,
for which they receive a fee per transaction. In the case of a Reverse Auction, buyers name their price and the broker seeks out a
supplier who can fulfill that price.
These brokers offer a directory listing for general or specific goods or services. In many cases, they also evaluate the business
concerned, and offer value awards to companies based on customer feedback. They may also offer rewards to customers.
These brokers may charge membership and/or pay-per-click fees. In some cases, membership fees are also charged to the customers.
The MouseOver below describes examples of each of the variations on the B2C model.
In the next lesson, we look more closely at the various Advertising models.