The Internet came to revolutionize all areas of our lives, especially the business world, bringing with it a large number of sales opportunities and promotion possibilities such as digital marketing. The peer-to-peer model is a type of business that, thanks to technological advances, has also managed to grow and establish itself in a large number of sectors, providing many benefits and opportunities.
In this article we explain what the peer-to-peer business model consists of and what advantages it presents so that you know if it can be a good idea for your project.
What is the peer-to-peer business model?
A peer-to-peer model business is based on the sale of products or services through a platform where consumers can buy what various brands or people offer without intermediaries.
The company that has developed the platform makes its technology available to brands (or individuals) and consumers to facilitate their connection, taking a commission (percentage) for each of the transactions that take place.
Some of the most common characteristics that the peer-to-peer business model presents are:
- Wide supply and demand: They are intended for sectors in which there are a large number of sellers and buyers. In this way, a high level of transactions is generated and the commissions obtained make this model a very profitable business.
- Good seller-buyer communication: The main function of this type of business model is to offer sellers and buyers a link that allows contact between them, thus guaranteeing that all parts of the sales process are simplified and streamlined.
- Easy and secure transactions: Peer-to-peer model platforms also offer a secure payment method, as well as legal support for both parties in case any type of fraud occurs.
On the other hand, the peer-to-peer model is not only intended for companies that sell to individuals, but also for businesses that take place between individuals and between companies themselves.
Advantages of the peer-to-peer model
The peer-to-peer Model can offer many benefits for both parties, among the most notable are:
- More competitive prices: By eliminating intermediaries, prices can be lowered, something that can be positive both for consumers, as they find cheaper prices, and for brands, which can stand out from the competition by offering more accessible prices on the platforms.
- Less risk: As we have mentioned, this type of business is characterized by having specific regulations that allow secure transactions to be offered, thus reducing the possibilities of fraud for both parties.
- Varied offer: Through this business model, consumers have access to a wide variety of products and services on the same platform. This gives them the possibility of comparing prices more easily and opting for the best option, thus producing a much more satisfactory purchase.
- Greater reach: Brands or individuals who sell through the peer-to-peer business model have the possibility of reaching a broader audience, thus increasing their sales possibilities.
Disadvantages of the peer-to-peer model
Although the peer-to-peer model offers a large number of advantages and is suitable for a wide variety of sectors, it also has some disadvantages that may make your project not a 100% fit:
- Quality risk: Intermediaries are, many times, those in charge of offering the client minimum quality standards in the products and services offered. By ignoring this figure, there is a risk that part of the offer does not meet the expected quality.
- Cold relationship between the parties: The peer-to-peer model depends entirely on technology, so the relationship between seller and customer is not usually as close, making it more difficult to generate some trust.
- High response time: again, intermediaries are usually the ones in charge of offering efficient customer service. By not having their figure, the doubts sent by consumers may take longer to be resolved, jeopardizing the sale.
Examples of companies with a peer-to-peer business model
Surely, while you were reading the article, currently well-known businesses that meet the characteristics of the peer-to-peer model have come to mind. Here are some popular examples to give you a better understanding of how it works.
amazon
Amazon is among the largest companies with a peer-to-peer model in the world. It started as an online bookstore, but little by little it has expanded to many sectors, offering products of all kinds and from different suppliers, from food, to fashion, to technology, among many others. Sellers have seen Amazon as a great opportunity to expand the boundaries of their business and customers, a way to find products at very competitive prices and enjoy fast shipping.
Vinted
Vinted is one of the most famous second-hand clothing platforms. Its low prices have made many people prefer to use it. Besides, This business is nourished by other individualsas is also the case with Wallapop, who have found on this platform a way to sell the clothes they no longer use.
Airbnb
Individuals from anywhere in the world can promote their accommodation through this platform. The objective of this portal is to provide travelers with stays that are different from typical hotels or vacation apartments, often offering cheaper prices (although there are all types).
The creators of the platform they make money through commissions that apply to the prices of the hosts’ accommodations. But, in exchange, these guests can have their stay seen by more tourists, who can find places that better suit their needs.
Uber
Uber has managed to unite under the same platform clients who are looking for a more modernized service than taxis and individuals who offer their driving services. In this way, passengers can travel in a much more flexible, cheaper and comfortable way, while individuals can carry out their activity for a small commission.
The Uber platform, in fact, like the rest of the examples that we have highlighted here, has been a true revolution for its sector, offering a customer experience never seen before. This shows that the peer-to-peer business model is one of the most successful at the present and, possibly, also in the future.