Swiggy, Uber, Google and OYO – all seemingly different businesses from different industries. What do they have in common, one might ask? Well, they’re all aggregator businesses.
An aggregator business is one that connects many similar businesses in an industry with their customers. For example, Swiggy connects a large number of restaurants (which become partners with Swiggy) with customers, essentially creating one large network under the aggregator’s brand. Aggregators act as a middleperson between businesses and their customers. It is important to note that although the partner businesses sell their products under the brand of the aggregator, they never become the employees of the aggregator.
Customers benefit from the aggregator business model in many ways. It is much more time-saving and easy as they need to browse only one website compared to multiple. They can also compare prices easily and choose the best option for them more easily. Customers might also find it safer as they can check the ratings of the partner businesses and reviews left by other customers.
The partner businesses benefit from the extensive marketing done by the aggregator as it brings more people to the aggregator’s site, leading to more potential customers for them and a potentially larger customer base.
Aggregators benefit from this business model as they get a certain revenue from each sale made by a partner business. This is known as a commission and can be earned in two ways. The aggregators can charge a final price to customers after adding a markup to a minimum price quoted by the partner business. Alternatively, the aggregator can charge a certain percentage of the sale made by the partner business. The aggregators earn this commission from the partner business in exchange for providing them with customers.
With the growth of the internet and new technology, it is likely that aggregator businesses will only become more common. Although this business model did exist before the internet, the internet has helped it become more widespread due to better connectivity and greater ease for processes like transportation and payment, providing an easy and quick way for customers to purchase products online.
Adhiti is a middle year student in school. She likes to keep fit by playing basketball and swimming. She has a keen interest in painting and dancing art forms. A student reporter at YOCee, she loves journalism.