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Managing the Digital Enterprise: Brokerage Model Analysis

Explore the diverse Brokerage Models including Marketplace Exchange, Buy/Sell Fulfillment, and Demand Collection System. Learn about leading brokers like Orbitz, ChemConnect, and eBay.

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Managing the Digital Enterprise: Brokerage Model Analysis

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  1. Brokerage Model Unit 5-1-1 Managing the Digital Enterprise By Professor Michael Rappa

  2. Brokerage Model • Brokers are market-makers • They bring buyers and sellers together and facilitate transactions • Brokers play a frequent role in business-to-business (B2B), business-to-consumer (B2C), or consumer-to-consumer (C2C) markets • A broker charges a fee or commission for each transaction it • The formula for fees can vary

  3. Marketplace exchange Buy/sell fulfillment Demand collection system Auction broker Transaction broker Distributor Search agent Virtual marketplace Category of Brokerage Models

  4. Marketplace Exchange • Offers a full range of services covering the transaction process, from market assessment to negotiation and fulfillment • Exchanges operate independently or are backed by an industry consortium • Orbitz • a leading online travel company that enables travelers to search for and purchase a broad array of travel products, including airline tickets, lodging, rental cars, cruises and vacation packages • ChemConnect • a leader in helping customers optimize their purchasing and sales processes for chemicals, plastics, and related products through a unique combination of market information, industry expertise, e-commerce solutions, and an active network of trading partners

  5. Buy/sell Fulfillment • Takes customer orders to buy or sell a product or service, including terms like price and delivery • CarsDirect • The leading multi-brand online car buying service, providing new and pre-owned automobiles and related products and services • CarsDirect.com has become the natural choice for consumers who demand objectivity, selection and upfront pricing, and for dealers who want to leverage the Internet for cost-effective incremental sales and revenue.

  6. Demand Collection System • The patented "name-your-price" model pioneered by Priceline.com • Prospective buyer makes a final (binding) bid for a specified good or service, and the broker arranges fulfillment • Priceline.com • Offers products for sale in two categories: a travel service that offers leisure airline tickets, hotel rooms, rental cars, packaged vacations and cruises; and a personal finance service that offers home mortgages, refinancing and home equity loans through an independent licensee

  7. Auction Broker • Conducts auctions for sellers (individuals or merchants). Broker charges the seller a listing fee and commission scaled with the value of the transaction • Auctions vary widely in terms of the offering and bidding rules. • eBay • A powerful platform for the sale of goods and services by a passionate community of individuals and businesses

  8. Transaction Broker • Provides a third-party payment mechanism for buyers and sellers to settle a transaction • PayPal • Enables any individual or business with an email address to send and receive payments online securely, easily and quickly. • PayPal's service builds on the existing financial infrastructure of bank accounts and credit cards and uses the world's most advanced proprietary fraud prevention systems to create a safe, global, real-time payment solution

  9. Distributor • Distributor is a catalog operation that connects a large number of product manufacturers with volume and retail buyers • Broker facilitates business transactions between franchised distributors and their trading partners

  10. Search Agent • A software agent or "robot" used to search-out the price and availability for a good or service specified by the buyer, or to locate hard to find information • MySimon • The premier comparison shopping destination, helps people make more informed purchase decisions whenever they shop • Uses Virtual Agent™ technology to create "intelligent agents" trained by the company's team of shopping experts to collect information from virtually every online store

  11. Virtual Marketplace • A hosting service for online merchants that charges setup, monthly listing, and/or transaction fees • May also provide automated transaction and relationship marketing services • Amazon.com • seeks to be Earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices

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