The Merchant

The Merchant business model is used by retailers and wholesalers. Simply stated: merchants buy goods, and sell them with profit. Think of a local store around the corner selling presents, larger supermarkets, an online shop… From a high level perspective, traditional Banking is also built on the same model: banks buy money from people (savings), and then sell a large part of the money with profit to other people (loans).

The Merchant model is not to be confused with the Brokerage business model, in which the intermediary actor brings together buyers and sellers without owning the transacted good in between.

The Merchant variants and examples

The Merchant business model has different variants, with most of the differentation on the level of the sales and distribution channel (f.e. online vs. offline).

• Brick and Mortar Merchant: traditional store, now often with online shop as well (called Click and Mortar Merchant in that case). Example: Barnes & Noble
• Catalog Merchant: traditional mail-order retailer, now mostly with online storefront as well. Example: Lands’ End is a global direct merchant of clothing and home products, sold through regular catalog mailings and the web.
• Online Merchant or e-tailer: a retailer or wholesaler purely operating through the internet. Example: Amazon.com
• Digital Merchant: a merchant that sells only digital products and services. Both sales and distribution run via the web. Example: Apple iTunes