The Digital Age Brokerage Model

By: Milos Pesic
Submitted: 2007-01-17 16:17:21
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We are now in the digital age. All nations now converge on the WWW. What better way to make business? Traditional business models have now been changing as rapidly as the change in technology.

The method of generating revenues in business used by the several companies to sustain their enterprise is now replaced by newer kinds of business models to respond to the new internet commerce. Yet all these are necessary. A business model positions businesses in a more or less predictable value-chain and so determines whether and how a certain company makes money efficiently and effectively.

Nonetheless, the fundamental business models are still retained, only that it comes in a fresh garb. One good example is the age-old auctions. Auctions have been a very reliable form of brokerage model since time past. It is only in these days though that this type of brokerage model has been gaining a more popular ground. In the past, auctions, as a brokerage model, could only be implemented in the brokerage industry to set the prices of commodities for sale or lending such as agricultural items, financial instruments, and unique items like fine art and antiquities. These days though, the use of the auction brokerage model has now expanded to more goods and services – almost any other items and services you can think of – all through the basic backing of a commissioned brokerage agent. Other business brokerage model types that are now established and prevailing in the internet, aside form online auctions are of several forms:

Marketplace Exchange (Orbitz; ChemConnect) operates either independently or under the assistance of an industry consortium covering the entire marketplace transaction process from assessment to negotiation and finalization.

Virtual Marketplace/Mall (Amazon) hosts online merchants and automated transaction and relationship marketing services while charging applicable setup, monthly listing, and/or transaction fees.

Buy-Sell Fulfillment (CarDirect; Respond) is where a brokerage acts in-between the buyers and the sellers, taking orders to buy or sell a product or service, while also handling related terms like pricing and delivery.

Demand Collection System (PriceLine patent) is an ingenious ‘name-your-price’ business brokerage model wherein the broker arranges the fulfillment of a sale after a prospective buyer makes a final (binding) bid for a specified good or service.

Auction Broker (eBay) is the auction-type wherein the broker charges the seller (individual/merchant) a listing-fee and commission settled with the transaction’s value and according to varying terms of the offering and bidding.

Transaction Broker (PayPal; Escrow) provides third-party services for buyers and sellers to settle their payment transaction.

Distributor is where the broker facilitates business transactions between franchised distributors and trading partners through a catalog operation connecting a large number of product manufacturers with volume and retail buyers.

Search Agent is a software “robot” used to search-out the price and availability for a good or service specified by buyers, locating hard-to-find information.

All these new-age brokerage models have facilitated the operation (and new rise) of brokers whether specializing in real estate, mortgages, international shipping, insurances, and the like. And these are flourishing as more internet business models continue to evolve.

Milos Pesic offers Brokerage advice. For more information, articles, tools, current news, and valuable resources on Brokerage and Brokerage related topics, visit his site at Online Brokerage

Article source: Expert Articles

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