The Broker

A broker brings together buyers and sellers, and usually takes a fee or commission on successful transactions. Brokers are active in business-to-business (B2B), business-to-consumer (B2C), and consumer-to-consumer (C2C) or Peer-to-Peer (P2P) markets. The Brokerage business model is not to be confused with the Merchant business model, where the intermediary buys and owns the good first, and then sells it.

The Broker variants and examples

Although the core business model does not change in most cases, different types of brokers can be distinguished. Brokers differentiate themselves on the level of the service offered buyers and sellers (general market place, search engine for buyers, crowdbuying power, review information to buyer…), and on the level of price setting and transaction between buyers and sellers (fixed price, auction, reverse Dutch auction…).

• Market Place:  provides a broad or dedicated platform for sellers to list their offers on, for buyers to look for interesting offers, and for both to finalise transactions. Example: Pro Merchant Subscription on Amazon
• Auction Broker: specific form of a market place where auctions are organised for sellers (individuals or merchants). Usually charges a listing fee and/or commission per transaction. Example: Christies (offline), eBay (online), Sweemo (p2p experience broker)
• Payment Broker: provides a payment system for buyers and sellers to settle a transaction. Example: PayPal
• Search Catalog: offers buyers a search engine to search on availability and price of specific products or services. Exampless: Kayak, Respond.com (seller participation fee)
• Crowdbuying Broker: leverages the buying power of a group of consumers to get a good deal.
• Lending Broker: brings together borrowers and lenders, and facilitates the transactions. Known as peer-to-peer lending or social lending. Example: Zopa