Blog cover photo from: https://adage.com/article/global-news/amazon-fashion/306062
The asset-light business model is also known as the capital-light business model, as it doesn’t require a lot of money to put a venture into action.
Be it the manpower, the infrastructure, R&D or even the network; instead of spending tons of money to “own” all, you pay a certain amount of capital to get things done and share the profit.
Of course, it does. And that’s because shared economy is the backbone of asset-light business model. How else would an entrepreneur expect to move ahead on the success path faster?
The success of a venture is measured in terms of investment made and the eventual returns. This is why the shared economy has become a hot trend is expected to stay that way for many years to come.
The primary advantage of an asset-light business model is its scalability. Given the fact that the investment made on the startup and operations is less in comparison to the profit harvested.
Growth proportion and prospects are higher in the case of the asset-light business model. As more partners keep adding to the network, and starting service in a new location is as easy as a click of a button, business expansion is not difficult.
However, there is a downside to this model. If the outsourcing business fails, operations suffer a massive blow. So, it becomes necessary to do thorough research and enough brainstorming before deciding which service provider you should opt for. (source: FATbit Technologies)