THE BROKERAGE MODEL

Whether a company sells products or services to consumers, other businesses, or both, there are many different ways to approach the marketplace and make a profit. Business models, of which the brokerage model is simply one, are used to describe how companies go about this process. They spell out the main ways in which companies make profits by identifying a company's role during commerce and describing how products, information, and other important elements are structured. Just as there are many different industries and types of companies, there are many different kinds of business models. While some are simple, others are very complex. Even within the same industry, companies may rely on business models that are very different from one another, and some companies may use a combination of several different models.

One Internet business model is the brokerage model. At the heart of this model are third parties known as brokers, who bring sellers and buyers of products and services together to engage in transactions. Normally, the broker charges a fee to at least one party involved in a transaction. While many brokers are involved in connecting consumers with retailers, they also may connect businesses with other businesses or consumers with other consumers. A wide variety of different scenarios or business configurations fall under the banner of a brokerage model. These include everything from Web sites posting simple online classified ads and Internet shopping malls (Web sites that sell products from a variety of different companies) to online marketplaces, online auctions, aggregators, and shopping bots.

Community Model

The community model is a method of developing an online presence in which several individuals or groups are encouraged to join and participate in ongoing interaction designed around a common purpose. Web communities, or virtual communities, were not only a way for like-minded people to come together online, they also were an increasingly important element of business plans.
the community model comes in two basic varieties: those centered on relationships and those centered on tasks. The former typically are informal, grassroots-oriented communities that revolve around shared interests, ideas, topics, and goals. In these communities, the development of relationships is the primary goal. To maximize member involvement, community sites must offer maximum degrees of interactivity and personalization. For example, GeoCities offers space and tools for members to set up their own Web sites and establish virtual communities within the broader GeoCities community. Task-centered communities generally are more structured and impersonal. The relationships established or augmented online are a means to a mutual end, such as enhanced profits. More specifically, Web communities are established between business partners, between businesses and their customers, between different groups of customers, within companies, and between individuals and groups devoted to particular topics.

In business-to-business (B2B) relationships, the community model provides all community members with the ability to share and check electronic invoices, communicate and exchange funds on secured networks, and resolve problems quickly and openly. Internet communities offer exceptionally streamlined workflow processes between and within companies, where the functionality of key tasks is integrated and synthesized. This necessitates less personnel, paperwork, and software, and boosts efficiency, thereby minimizing operating costs and enhancing profit margins.