If you're having trouble selling services or items in a crowded sector, why not sell them alongside close competitors under one umbrella? This may sound contradictory, yet it is the premise of the online eCommerce aggregator concept.
This page will provide general information regarding e-commerce aggregators, including their definition and how to tell them apart from marketplaces.
1. What is the definition of an e-commerce aggregator?
E-commerce aggregators, sometimes known as rollup businesses, invest in profitable D2C e-commerce brands that sell on platforms such as Shopify and Amazon. This strategy is not used by business entrants that were previously involved in the brick-and-mortar market. The core notion is that aggregators may establish economies of scale, reduce expenses, optimize operations, and increase revenues by acquiring multiple companies in the same sector and combining resources.
Not all aggregators purchase brands. Some e-commerce aggregators provide a website or app that aggregates various offers from competing brands, allowing consumers to conveniently evaluate their choices in one spot. Because there are so many competing brands online, they provide consumers with a quick and effective approach to accurately evaluate offers and make an informed selection, while also offering companies greater exposure for their services and products.
To understand more about e-commerce aggregators, you can refer to this case study for more information: Ecommerce aggregator: An interesting case study from Thrasio
2. How can an e-commerce aggregator be distinguished from a marketplace?
A. Trademark
Although the marketplace model has a brand, multiple sellers sell their products under their own brand names.
Amazon, for example, is a marketplace approach in which numerous sellers offer their things under their own names.
In the Aggregator approach, however, all services are given under a single brand name.
Uber, for example, is an aggregator model brand. Multiple service providers (car taxis) decided to provide services under the Uber brand.
B. Collaboration Model
In the marketplace approach, the administrator owns nothing and generates money by giving a platform to many merchants. They make money by bringing consumers to a commonplace (website).
The marketplace business's many sellers should be accountable for all product information, the shipping process, and so on.
Service providers are not employees of the aggregator business model, and they have complete discretion to reject or accept the order for service. Swiggy, for example, integrates restaurants with the aggregator approach.
Because the aggregator platform brings together comparable unorganized services in one location, they profit by attracting more clients to utilize their platform to access those services.
C. Superior Quality
Multiple sellers sell various things to various purchasers in the marketplace model. Consequently, the quality may not be guaranteed. Since comparable products are offered by several suppliers, the quality of the products may vary.
The brand name is the identity of the aggregator business model, and the aggregator believes in delivering standard quality. As a result, service providers should deliver quality service to customers and adhere to the terms and conditions as promised and signed throughout the contract.
3. Standard Cost
As previously said, the marketplace contains several sellers selling various things, and the price of the same product varies from vendor to vendor. The buyer can evaluate products from many merchants and purchase what they require.
However, because all services are given under a single name in the aggregator model, the price is standardized. Customers' orders can be taken by providers who are close by. When signing the agreement, all service providers agreed to this term.
Final thoughts
The increasing number of consumers on e-commerce platforms results in a lot of competitors in that field. Therefore, e-commerce aggregators were introduced as a shared space for businesses to sell their products with similar features and characteristics under big brand names. In this article, VNEXT Global has outlined basic information about e-commerce aggregators and distinguishes between aggregator forms and marketplace.
If you are interested in this topic, you can also refer to this blog to understand more about e-commerce aggregators from Thrasio’s case study:
Ecommerce aggregator: An interesting case study from Thrasio
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Author: Chi Vo - Content Marketing Executive
