What Drives A Collaborative Economy

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The Internet as a business tool enables consumers to become both the buyer and the seller of goods, services and brands by way of eCommerce platforms. Via the process of virtual retail methods, any consumer with enough serviceable tech savvy could make purchases online and have whatever goods or services acquired through such be resold to other consumers who might want to buy into them.

collaborative economy

Some web users on the other hand, choose to make certain goods they own or professional services they could offer available for purchase or availment by other web users via the same virtual retail method. Such goods or services could be personally owned or sourced from other entities such as business partners or third parties but regardless of their origins, all these could be resold to many web-based consumers.

When consumers as buyers and sellers successfully interact via the retail cycle to turn in a profit via eCommerce, the process creates a collaborative economy beneficial to a wide range of online consumers. However, the presence of a collaborative economy splits the online marketplace into two: Traditional online retailers and buyers acting as resellers/competitors.

Disruptive

When a collaborative economy occurs, the revenue streams of traditional online retailers get disrupted. An out-of-work chef, for example, who decides to turn his kitchen into a by-online-reservation-only dining experience suddenly, becomes competition to contend with by traditional restaurants that also market themselves online.

The degree of sophistication that online tech offers the out-of-work chef as disruption business model entrepreneur provides him/her considerable leverage to tap into potential guests online via a foodie blog, social media, or perhaps even a small business IP phone system that could be gotten from a RingCentral VoIP provider. Of course, the primary selling point that disruption business models usually offer consumers is cost-efficiency but there are other far more compelling factors that drive a collaborative economy.

future collaborative economy

Why it’s viable

There are far more compelling reasons why people (as online consumers) gravitate to collaborative economies as purveyed by disruption business models to make them considerably viable and with a huge potential to grow further. In a web-based economy, people would always be on the lookout for easier and more convenient ways to participate in the retail cycle. What collaborative economies offer are the following benefits:

  • Brand relief. Established brands tend to become more expensive as time passes. A considerable number of consumers after a while begin to perceive certain brands and the way they are priced to be so primarily because they have costly branding efforts to pursue in order to sustain the brand’s essence and value — and not because of the high quality guarantee. Common sense gets into the picture so consumers begin to hunt for other lesser-known but reliable brands that are more affordable via certain disruption business models.
  • Practical mobile-based alternative. A retail item or service that is priced reasonably but promises high quality value delivery that many consumers could vouch for online becomes a practical alternative to consider. This becomes even more viable especially when the mobile-based retail methods that go with buying into them are easy to understand and require not much hassle.
  • Entrepreneurial motivation. There would always be online consumers who could be just as business-minded as the next online retailer but who could offer better goods or services. Turning in a profit as a legit online business motivates people.
  • Bureaucratic relief. Traditional online retail and financial institutions require availment or online purchase methods that could come off as cumbersome for certain consumers with not much time nor patience to deal with such. Online alternatives such as trustworthy resellers and microlending among online consumers then become attractive to pursue.

For as long as big company systems and retail methods are governed by bureaucracy and traditional methods that aren’t that innovative enough to respond to a mobile consumer culture, collaborative economies would continue to thrive.

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