Ray Podder at MarketingProfs.com: “Have you checked your business model lately?”
Take the example of current merchant models—the types of brands that aggregate other brands as the merchants of their product offerings. Brands like Expedia and Hotwire that sell hotel rooms from brands like Marriott and Hilton, etc. Or brands like Macy’s and JCPenney that sell brands from Nike and London Fog, etc. Basically, we’re talking about brands with the current business models that buy in discounted bulk from the brands they carry and resell it back to the brands’ own potential customers at price points they (the aggregate brands) can control.
Today, this idea of “merchanting” may no longer be a sound model. In the brick and mortar cost models of yesterday, this type of commerce made all the sense in the world. But today the business model has to add real value, and information on business process and competition is not only abundant but also readily accessible. Circumventing the middleman is a few clicks away, and the Internet has made that all too simple. Buy low and sell high is business 101, right? You might think so, yet today models that still operate this way face some restructuring challenges.