Aggregator Business Model

Aggregator Business Model -

i. Part I : About It -
Aggregator Business Model is a network model, where the firm collects the information about a particular good/service providers, make the providers their partners, and sell their services under its own brand. It is Branding platform for service provider and msnufacturer. Since the aggregator is a brand, it has to provide services which have a uniform quality and price. This is done through signing up a contract with the partners. The good/service providers never become aggregator’s employees and continue to be the owners of the good/service provided. Aggregator just help them in marketing in a unique win-win way.

ii.Part II: Characteristics of Aggregators :
1. Customers -
The aggregator business model runs on a two-fold customers strategy, where the service consumers as well as the goods/service providers acts as the customers of the company. The brand is built in such a way so as to attract both of the parties to use this platform rather than the competitors.

2.Industry-
All the service providers are from the same industry. Aggregators collect the good/service providers of a single industry and organize them under his own brand Like  Policy Bazar , OYO , Trivago etc.

3.Partnership Model-
The good/service providers are not the employees of the aggregator. They act as partners to the business. Partners always have the freedom to accept or to reject the offer provided by the aggregator (these terms are clarified in the contract).

4.Brand-
Aggregators spend most of their revenue in building up a brand. This brand has certain notable features like – quality, price band, on demand delivery, etc. All the goods/services are provided under a single brand but by different providers. Branding is done at every Customer Touch point to have a recall value.

5.Quality-
The aggregator strives to provide a standardized quality to every user. They make sure that the partners provide you the standardized quality product/service. These aggregators have teams that make sure quality is maintained.

6.Contract-
A contract is signed between the aggregator and the goods/service provider where all the terms are cleared. The terms provide a win-win situation for both the parties, where the partners focus on providing quality product/service to the customers and the aggregator focus on marketing and creating more leads for the partners.

iii. Part III : Terms usually included -
✍Branding Terms.
✍The standardized quality required by the aggregator.
✍The Commission (OLA Business Model), or Take Up rate (Oyo Business Model).
Other terms depending on the industry and the aggregator involved.

iv. Part IV :
🎯Aggregator Revenue Model-
💰As already stated above, the good/service providers are the real customers of the aggregators.
💰Aggregators provide them with the customers and in return charge some commission. (Uber Business Model)
💰The partners quote the minimum price at which they’ll operate and the aggregators, after adding up the take up rate, quote the final price to the consumer. (Oyo Business Model)
💰This method isn’t always in operation. The revenue generation is different for different business stage, cycle, and season. There is a big role of discounts and surge pricing in determining the total revenue generation by the aggregators. They might

🎯Pricing -
Aggregator Has Diff.Market Place..  (like Amazon, Alibaba, Flipkart, etc.). They provide different services for different but standardised prices (or price bands).
For E.g. OLA has a definite price per kilometer.

🎯Competition -
Competition in aggregator Business Model is tough to handle as same partners might work for competitors.

v. Part V : Working Methodology Aggregator Business Model 
✅Theoretical explanation of this model is simple.
✅Aggregator visits the Good/service providers.
✅Aggregator promises them more customers and proposes a partnership plan.
✅Service providers are now the partners.
✅Aggregator builds up his own brand and tries to attract customers through many marketing strategies.
✅Customers make purchases through the aggregator.
✅Partners get the customers as promised.
✅Aggregator gets the commission.

vi.Part VI : Challenges-
The aggregator business model was initially introduced within the transportation and mobility segment to meet the demand for services that can facilitate both on-demand commuting as well as logistics. However, the biggest challenge that comes with aggregator based mobility services is the fact that such business are usually driver centric, i.e. they provide more benefits for the driver rather than the end consumer due to the possibility of gaining more loyalty from cab drivers. To eliminate such issues, some aggregators have begun to provide various discounts and subsidies for both drivers and customers.

vii. Part VII: Future scope of Aggregator model in India-
✒Today any ecommerce business is thriving on the subsidies and incentives that they give customers and suppliers to gain market share and traction.  Even he major players will not sustain if the trends continue to remain.
✒The aggregators will have to actually test the model by eliminating subsidies and incentives and then figure out whether it’s doable or some twigging is required in the model.
✒With the steady rise of e-commerce in India and growing demand for on-demand services, the aggregator model is playing a key role in bringing structure and equilibrium within the organized space across various industries. While still at a nascent stage, it can be concluded for now that the aggregator model will witness greater adoption among numerous market players in the near future, enabling the creation of an ecosystem that benefits all parties involved.

Dr. Shivangi Zarkar (Ph.D)
- Founder of Dr.Shivangi Biz Maestro
- Co-Founder of Born 2 Biz
- Co-Founder of Udyog Megh
Mob. No 8850560056 , 8850373717