Understand Aggregator Business Model

  • 29th Jul'20
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The aggregator business model alludes to a business approach used by different ventures in the web-based business space, wherein such businesses accumulate data on explicit products and enterprises from different contending sources in the market through their online stage. 

Ordinarily, the merchandise and/or specialist co-ops are the genuine clients of such aggregator based businesses. Consequently, the aggregator business model enables these specialist organizations to acquire clients, for the most part for a specific expense or commission. 

 

What is an Aggregator Business Model?

Aggregator Business Model works based on credibility. Say, if you are a service provider, an aggregator - i.e. - a brand will sign a contract with you and provide their customers with the services that you offer under their name. It works on network marketing. Since the aggregator is a brand, every service they offer has its ecosystem. The services provided are uniform, systemized, though they are provided by different service providers. 

One advantage of this model is that, as a service provider, you do not become an employee of the aggregator. Along with providing services for them, you can hold your own separate identity. 

 

 

How does it benefit? 

Aggregator Business Models are extremely beneficial for the consumers. Because, they save their time, money and generate a trust chain. This increases the value proposition of the Aggregator Business Model for its consumer. 

 

Let us understand this in detail: 

A consumer wants Trust, easy access, cost-effectiveness, and time-saving services from any service provider or an aggregator. 

 

Trust

Aggregators have their rating systems. Since every step was taken by them and every service provider they choose has been thoroughly scrutinized, consumers easily start them. In the digital era, there are multiple platforms on which a customer can post his/her review on the service provided and rate it. In many cases, aggregators are startups or established brands who are extremely cautious of their brand value and avoid negative reviews from their customers. Therefore, credibility is an important value proposition for an aggregator. 

 

Easy Access

No one wants to waste time on operating complicated mobile applications. It takes a lot of time and effort. Comparing prices, reading the reviews, discussing who is the best, and then availing that service. A consumer saves all this time and energy while using an aggregator model because everything is ready in hand for them. The applications to book the services are user-friendly and saves them from individually accessing each service provider. 

 

Time-Saving 

If you are on a vacation and want to book a hotel you just log in to one of the aggregator applications, see the rate comparisons and choose the cheapest hotel you want that provides the best services. Life is easy for you. The services here are quick and efficient. You do not have to wait for long to hail a cab, just book it through any application and the cab is at your doorstep. Simple living and high thinking. 

 

Cost-Effective 

Since there is competition even in between the aggregators to rope in maximum customers, as a consumer, you can avail of nice and sometimes heavy discounts. 

 

Aggregator vs Marketplace Business Model

An online marketplace is essentially an Internet business site or an application that arranges the items and administrations of various organizations/venders and sells them on its own site. The firm just goes about as an arbiter and doesn't claim the items or administrations gave. 

Henceforth, the costs are controlled by the merchants themselves. Marketplace just charges a commission as they are giving dealers a stage (with an enormous system) to sell. Instances of the online marketplace are Amazon.com, Flipkart.com, Hotels.com, and so forth. 

The Aggregator Business Model normally sort out a disorderly and populated part like inns, taxis, and so forth and offer their support under their image. Aggregators, much the same as a marketplace, are huge brands that give merchandise/administrations under their own name. 

 

 

How does an Aggregator Business Model work? 

An Aggregator Business Model works in these simple steps: 

  • Aggregator visits the service provider.
  • They work out a partnership plan. 
  • An Aggregator is either a brand or a start-up, so they set its norms 
  • Provide customers with easy access to the service 
  • Customers avail the services through the aggregator. 
  • Service Providers get more customers 
  • Aggregators get their commission. 

 

How do aggregator sites make money?

The income age in an aggregator business model is like that of the marketplace business model. The accomplices of the organization are the wellspring of the income. The organization produces income through commissions which are paid in one of two different ways: 

The organization causes an imprint upon the accomplice cost. The accomplice fixes the cost and the aggregator firm provides the last cost estimate to the clients in the wake of including their increase for example 20%. 

The organization takes a commission rate for each buy from the accomplice. This is equivalent to a partner commission however normally has stricter terms and conditions as a result of the information. 

 

Is Amazon an aggregator?

Amazon is a stage for merchants by being a foundation supplier. It permits dealers to centre around making or sourcing items, while dealing with promoting, satisfaction, and by being a customer-facing facade.

Be that as it may, they control the most significant part - the client relationship. By controlling the client relationship Amazon catches most by far from the general biological system. Clients don't come to purchase from a merchant, they come to purchase from Amazon. 

Amazon is an aggregator who totals dealers - which they pay for aside from the expenses - to clients with whom they have a selective relationship at scale. 

 

The future extent of Aggregator Bussiness model 

Today any web-based business is blossoming with the sponsorships and motivating forces that they give clients and providers to pick up a piece of the overall industry and footing. Indeed, even the significant players won't support if the patterns keep on remaining. 

The aggregators should really test the model by disposing of endowments and motivating forces and afterwards make sense of whether it's possible or some twigging is required in the model. 

 

For more information, click the below link

Aggregator Business Model | What Is It And How Does It Operate?

This model (also called the On-Demand Delivery model or Uber for X model) involves organizing an unorganized and populated sector like hotels and taxis and providing the service under one brand. Read More

 

We, at OpenGrowth, are continually looking for trending startups in the ecosystem. This was a blog on the Aggregator Business Model. If you want to know any further information about the startup ecosystem or have any mind-boggling ideas, do refer to the other blogs at OpenGrowth. If you have any suggestions, do let us know in the comment section below. 

 

About the Author: Sudeshna Dutta

Sudeshna is an engineer in making. Apart from dealing with circuits and chips, she is passionate about playing keyboard and wants to attain professionalism in it with her talent coupled with hard work. She prefers the music of all tastes and genres.

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