Models, Inc.

 

In the previous article we looked at three different types of classification systems that experts have used to understand e-business models. In this and subsequent parts of this series, we will use the framework used by the "Managing The Digital Enterprise" project of the Open Courseware Lab of North Carolina State University to understand these business models. The business models within this framework are: Brokerage, Advertising, Infomediary, Merchant, Manufacturer, Affiliate, Community, Subscription and Utility.

Let's evaluate each one of them.

Brokerage Model
These are the market makers who bring the buyers and sellers together in the virtual environment and facilitate transactions. In the Internet parlance, these would be business-to-business (B2B), business-to-consumer (B2C) or consumer-to-consumer (C2C) marketplaces. At one time these were supposed to change the supply-chain networks of a whole lot of industries. However, it did not materialize and a number of marketplace startups folded, though many are still active and profitable.

The primary revenue stream of the brokerage model is the commission fee for each transaction. Depending upon the nature of the buyer-seller relationship, the fee could be charged either to the buyer or to the seller. Also, the formula for computing the fee for a transaction could vary.

The …

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