What is Brokerage Model? Is It Helpful for e-Commerce Businesses

Brokerage Model is evolved, enhanced and advanced version of a traditionally called ‘broker’. A broker is a person usually involved in the facilitation, negotiation and arbitration of any deal or service. It is also termed as marker maker. Similarly, Brokerage Model is a business model in which a third party plays the role of a broker by providing services and facilities. In return of its services, it charges the proportional amount of money involved in respective transaction or service. Brokerage Model offers a single platform for different activities of sellers and buyers. The world of internet has given further impetus to Brokerage Model by enabling the online role of third-party in the provision of different types of services and facilities.

Brokerage Model has greater scope and wider range than other concept of businesses. It can facilitate business-to-business (B2B), consumer-to-consumer (C2C) or business-to-consumer (B2C). Brokerage model is being utilized in different ways and types. There is profound role of Brokerage Model in e-commerce businesses. Though there is variation in operations of this model but role of a third party remains constant. Let’s explore how Brokerage models is being used and implemented in the arena of internet.

Virtual Marketplace/Virtual Mall:

It is the online platform where multiple sellers post their products. Customers visit the virtual marketplace and buy the product they like. It enables the customers to explore different products by different brands or merchants on a single platform. On the other hand, Virtual marketplace offer to merchants to have a larger market and greater opportunity to sell their items. The case in point is Amazon, which is one of the largest virtual marketplaces.

Search Agent:

It offers users to provide best search result with the incorporation of the artificial intelligence (AI). AI is used to search the relevant result and best possibility of user’s requirements. It facilitates the user to find out the best price for a god or service. It plays the intermediary role in searching the demanded service or product by a user. For instance, LinkedIn Premium package offers to search the best possible job for a person. On the other hand, a best possible employee for the company. It uses AI to match the job requirements and users’ profiles.

Transaction Broker:

In this type of Brokerage Model, it offers the secure gateway for the payment mechanism between two parties like sellers and buyers. It enables the financial transactions among user. It facilitates two parties by ensuring the encryption and security of payment gateway. For example, PayPal offers the payment gateways that are secure and user-friendly.

Auction Broker, Reverse Auction (Demand Collection System):

According to a dissertation help firm, it offers the digital bidding process for sellers and buyers. In auction broker, seller posts the item to get the best price. Buyers compete with each other to buy the product. Buyer with highest price buys the product from seller. EBay is one of the famous auction broker operating in the arena of the internet. Whereas, in reverse auction role of buyers and sellers are swapped. It is used as tool in B2B for the procurement. The primary function of the reverse auction is to contest purchase prices downwards. The case in point is the functioning of Quibids.

Buy/Sell Fulfilment:

Buy/Seller Fulfilment is one the most common type of Brokerage Model. It allows the users to buy or sell the desired product or service on as single platform. It allows the sellers to setup an online stall for services or products. Buyers go through those stalls to select and buy a product. On the other hand, buyers can also post their requests for services or products to get a suitable seller. For example, Fiverr is an online platform which offers sellers to post their product and buyers to post their request.

Marketplace Exchange:

Marketplace Exchange is the platform where market related deals and negotiation takes place. It is just like the barter system where commodities and products are exchanged with a reasonable deal. For example, operates by electronic exchange for the trading of different chemicals and related products.

In a nutshell, Brokerage Model has rigorously revolutionized the operation of e-commerce businesses. It has helped and assisted by all means to make ecommerce businesses successful. Brokerage Model is assisting and facilitating e-commerce businesses by providing payment methods to virtual markets facilities.  The price of Brokerage model is minute as compared to its benefits. With very little charges of its services, e-businesses can grow themselves exponentially. There is a high potential for e-commerce businesses to equip themselves with sophisticated technical support via Brokerage Model.

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