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 the brokerage model that can be used by eBusinesses and 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 diagrams below.
1) The Buy/Sell Match 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. e-businesses based on this model work on high-volume,
low-markup transactions for which they charge a broker's fee.
A site that aligns itself to the Buy/Sell Match model might:
Provide consumers a place to research, price, design, order, and arrange for delivery of a new vehicle at their home or the office
Offer online investing services and investment ideas and insights
Brokerage Model
Buy/Sell Fulfillment: customer specifies buy or sell orders for a product or service, including price, delivery, etc. The broker charges the buyer and/or seller a transaction fee.
The Buy/Sell Match Model: Discussed in detail above.
The Buyer-Aggregator 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.
The Classified-Advertiser model: 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. 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 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 e-store 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.
The Auction and Reverse Auction broker: Auction and Reverse Auction brokers 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.
Directory and Evaluator Model: 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 following list describes examples of each of the variations on the B2C model.
Examples of the Buyer Aggregator Model
An example of the Buyer Aggregator model is a site that pools the purchasing power of buyers who have a common goal of purchasing and receiving a discount on goods and services, and then connects those buyers with the sellers of those products and services. The Buyer Aggregator Model describes buyer aggregation as the process of bringing together individual purchasers from across the Internet to transact as a group so they can receive the same values traditionally afforded to organizations who purchase in volume.
Sellers pay a small percentage of each sale on a per-transaction basis.
Aggregator Model Electronic commerce business model where a firm that does not produce or warehouse any items collects information on goods or services from several competing sources at its website. The firm's strength lies in its ability to create an environment which draws visitors to its website, and in designing a system which allows easy matching of prices and specifications.
Account aggregation
Account aggregation is a method that involves compiling information from different accounts, which may include
bank accounts,
credit card accounts,
investment accounts, and
other consumer or business accounts,
into a single place.
Account aggregation is a process by which information from all of an individual's accounts are collected in one place.
For example, an online banking service may offer a home page in which account holders can see information from all their checking, savings, CDs and brokerage accounts in one place. Personal finance software, apps and online services like Quicken also provide account aggregation services.
Account aggregation services allow users to access multiple bank accounts (even accounts from different banks) in an integrated manner via a single interface. In fact, Bank of America also provides this aggregation service. The basic operation is as shown in Figure 5-1. After authentication, the account aggregator serves as a proxy to get the information from the required banks for the user. The information is aggregated and possibly processed before being displayed to the user. Obviously, this service offers some advantages to consumers. It also presents a security issue, however, because users need to release sensitive personal information to the account aggregator for authetication purposes.
Figure 5-1: Account aggregation service
Data and Interactions
Disparate data sources, such as:
Other Web sites and portals.
Core business systems and Databases.
Other transient data sources.
A set of interactions that includes:
Aggregating multiple sources of data.
Accessing distilled views of the data.
A schematic of the participants in the Information Aggregator business pattern is shown in
The Information Aggregation business pattern consists of these participants.
Putting the Pattern to use
Web sites for sporting events that allow millions of fans (users) to have real-time access to the latest news, scores, and
results (data) from sporting events using various devices such as Web browsers, PDAs, and wireless phones (network).
Examples are found at www.espn.com and www.olympic.org
Internet (network) portals that aggregate information from disparate core business data sources (data) and allow thousands of users (users) to personalize this information to meet their preferences. Examples are found at https://www.yahoo.com and https://www.foxnews.com
Five examples of the variations on the B2C model.
Generalized portals rely heavily on mass appeal and huge volumes of traffic. The most obvious examples are search engines like Google, Bing, and DuckDuckGo. ISPs like AOL generate traffic through content and services.
Vortals or specialized portals are based on an area of interest or industry-service. These portals keep to specific content to ensure continued interest from a group of visitors. Although volume is of importance, it is less so than for Generalized portals.
Profile or personalized portals enable visitors to customize the site based on their interest and requirements.
Customer loyalty models are structured along the lines of frequent flyer miles and supermarket customer loyalty points, offering buyer incentives in various forms. They can reward viewers for undertaking surveys, completing forms, viewing advertisements, or making purchases with points that can be accumulated and redeemed in various ways.
The Free model, often adopted by Generalized portals, offers something for free. These models can develop into or from portals and may also merge into the infomediary model. They may offer free services, email, web space, internet access, software or other products. This model strives for loyalty while offering general appeal.
Variations of the B2C model
What characteristics or benchmarks can be used to assess the business value of a company such as Twitter?
Have you used Twitter to communicate with friends or family?
What are your thoughts on this service?
What are Twitter's most important assets?
Which of the various methods described for monetizing the assets of Twitter do you feel might be most successful?
eCommerce Business Models
Major Business-to-Consumer (B2C) Business Models
Major Business-to-Business (B2B) Business Models
Business Models in Emerging eCommerce Areas
How ecommerce changes business: Strategy, Structure, and Process
Business Architecture 1) Generalized portals rely heavily on mass appeal and huge volumes of traffic. The most obvious examples are search engines like Google, Bing, and DuckDuckGo. ISPs like AOL generate traffic through content and services.
This traffic makes the generalized poral sites valuable billboards for advertisers.
2) Vortals or specialized portals are based on an area of interest or industry-service. These portals keep to specific content to ensure continued interest from a group of visitors. Although volume is of importance, it is less so than for Generalized portals.
3) Profile or personalized portals enable visitors to customize the site based on their interest and requirements. 4) Customer loyalty models are structured along the lines of frequent flyer miles and supermarket customer loyalty points, offering buyer incentives in various forms. They can reward viewers for undertaking surveys, completing forms, viewing advertisements, or making purchases with points that can be accumulated and redeemed in various ways. 5) The Free model, often adopted by Generalized portals, offers something for free. These models can develop into or from portals and may also merge into the infomediary model. They may offer free services, email, web space, internet access, software or other products. This model strives for loyalty while offering general appeal.
In the next lesson, we look more closely at the various Advertising models.
