Introducing Brokerage vs. White-Label Brokerage
The Forex market becomes more and more crowded with the brokerage businesses established, you first have to decide which business model you follow and shape the range of your services accordingly. In terms of the business model, there are basically two main options to choose from: introducing brokerage and white-label brokerage. When it comes to the differences, a major part of them is going around flexibility and range of operations. To make the right decision between these two and invest your capital in the best way, you may need a consulting service from experts in the industry.
At Qinox Tech, we offer a great consulting service with our experienced and skilled team members which can guide you through regulatory framework, risk management, sales and marketing strategies and so on. If you want to become a Forex broker but do not have so much knowledge about establishing one, you can find preliminary details below.
Introducing Brokerage
An Introducing Broker is simply an affiliate marketing specialist working under the roof of a bigger brokerage. Their job description is to acquire traders for a primary broker which collects the money from the deposits and then shares a part of it with the Introducing Broker. An IB takes full responsibility for customer acquisition and the acquired customers can be tracked by both IB and primary broker.
The services provided by an IB can vary depending on the needs of the primary broker and the type of partnership. Additional operations like client retention and conversion can also be provided by IB which serves as the main difference between them and marketing affiliates.
For a starter, becoming an IB can be a better option than becoming a primary broker, since it is very cost-efficient and you may want to learn how it works before jumping into a sea full of sharks. All the technological tools such as platform and payment solutions will already be active and offered by the primary brokerage.
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Besides the advantages, there are also shortcomings of becoming an IB. At the end of the day, you will always be dependent on another institution. Your whole business model should be formed in a way that maximizes the profit of the primary broker and you will benefit from that. If you are an ambitious entrepreneur wanting to stand on your own feet, a white-label brokerage can be a better fit for you.
White-Label Brokerage
Compared to IB, white-label brokerages are independent in many terms such as brand, risk management, client support, platforms, etc. What this model offers is great flexibility. You can combine different services and define your business model by yourself.
Qinox Tech is one of the most promising Forex technology providers with turnkey Forex white-label solutions. Qinox CRM, white-label MT4 and MT5 bridges, Qinox PSP and a wider range of solutions are what you need and what you get in order to start your white-label brokerage. You can check out all of our services and see what is best for you.
As a white-label brokerage, you will have more space by positioning yourself among different functions. However, there will be some limitations despite the high degree of autonomy. The services used in your platform will be made by other companies and you can have hard times while eliminating the technical inefficiencies. But still, monetary aspects like fees, spreads and terms will all determined by your white-label brokerage, not the platform provider. It means that you can bend the rules of the game even though you are not the designer of the platforms.
As you can foresee, the costs of establishing a white-label brokerage are significantly higher than those associated with opening an IB due to a larger number of services. Luckily, the potential revenue and growth opportunity are equally higher so you can compensate for the costs with high profits.
Feeling Confused?
If you feel a little bit lost in all the details, Qinox Tech is here for you to clear the way. Get in touch with us to learn more about the concepts and what we can offer to make your dreams come true.
