Marketplace Business Model vs. Aggregator Business Model

June 14, 2022, by Sid Saurav

The marketplace business model and aggregator business model, though very similar, have noticeable differences.

But before talking about those differences, let us first talk about what these models are.

An online marketplace is basically an eCommerce website or an application that organizes the products and services offered by different sellers and sells them on its own website. The firm only acts as a mediator and doesn’t own the products or services provided. Hence, the prices are determined by the sellers themselves. Marketplace only charges a commission as it provides sellers with a platform (with a huge network) to sell. Examples of the online marketplace are Amazon.com, Flipkart.com, Hotels.com, etc.

The aggregator business model usually involves organizing an unorganized and populated sector like hotels, taxis, etc., and providing their service under a standard brand name. Aggregators, just like a marketplace, are big brands that provide offerings under their own brand name. The sellers are their partners but, unlike the marketplace, sellers don’t sell under their own names. Offerings are sold under the name of the aggregator and hence the price/price-band is determined by the aggregator. Examples of online aggregators are Uber, Ola, Oyo, Munchery, etc.

Brand Image

A marketplace has its own brand but the partners (sellers) perform their services or sell their goods under their own brand. That is, the brand image of partners also matters. For example, Hind Computer Ltd. selling its products on Amazon has its own brand identity and brand image.

All the partners working with aggregators perform under one brand – the aggregator’s brand.

Standardized Quality

Different partners working with a marketplace have different product qualities. It’s a marketplace for different producers serving different customers. Similar products provided by different producers may have different qualities.

Aggregators believe in a similar and standardized quality. They see to it that the offerings provided by the partners are of similar and standardized quality. Certain teams are given duties to check on the quality provided by the partners.

Standardized Price

Since partners are responsible for deciding the prices, similar products may have different prices in the marketplace. The same product may be sold for ‘x dollars’ by one seller and ‘y dollars’ by another. The user has to find the price suiting his requirements.

Aggregators decide the price themselves. Partners perform their services or sell the products at the price decided at the time of the contract.

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