| Lesson 8 || Aggregation model (an adaptation of the storefront model |
| Objective ||Define the aggregation business model. |
Aggregator Business Model
(Adaptation of Storefront Model)
Have you ever spent a day shopping, traveling from store to store, mall to mall, and still not found what you were looking for?
This problem provided the inspiration for the aggregation business model. In the aggregation business model, one
company brings together a variety of products and services, making itself a value-added intermediary between producers and
consumers. Unlike the agora model, where haggling occurs, the aggregation model is characterized by a set of products and
services being sold at stable prices.
A business model is the method of doing business by which a company can sustain itself (generate revenue).
The business model spells-out how a company makes money by specifying where it is positioned in the value chain.
There are many benefits of bringing a business to the Internet. An e-business can offer personalization, high quality customer service and improved supply-chain management. Examples of the models include:
- Storefront Model
- Auction Model
- Portal Model
Customer Experience Strategy
- This model is a basic form of e-commerce in which the buyer and the seller interact directly.
- It combines transaction processing, security, online payment and information storage to enable merchants to sell their products online.
- To conduct storefront e-commerce, merchants need to organize online catalogs of products, take orders through their Web sites,
accept payments securely, send merchandize to customers and manage customer data.
- The storefront should be marketed to potential customers. Many of the leading storefront model companies are B2C (Business to
Aggregator Business Model is a network model where the firm collects the information about a particular good/service providers, make the providers their partners, and sell their services under its own brand. Since the aggregator is a brand, it has to provide services which have uniform quality and price.
A great real world example of the aggregation business model is pillpack.
pillpack.com is a full-service online pharmacy that enables consumers to fill prescriptions and purchase over-the-counter medications from the comfort of their own homes. Let us say your local drug store does not stock your favorite face cream (it is your favorite because you have extremely sensitive skin and this is the only cream you have ever used that does not make your skin break out).
Rather than traveling from store to store or special ordering the product, you try out PlanetRX.com. Not only do they ship your face cream directly to your home, but they also have your blood pressure pills and pharmacists available to answer your questions 24 hours a day.
These value-added benefits (home delivery, 24-hour access to a pharmacist) combined with a large
selection of products and services characterize the aggregation business model.