An E-Tailer’s Operational Strategy under Different Supply Chain Structures

Shangyu Pi and Yang Wang
Additional contact information
Shangyu Pi: School of Management, Jinan University, Guangzhou 510632, China
Yang Wang: School of Management, Jinan University, Guangzhou 510632, China

Sustainability, 2020, vol. 12, issue 5, 1-20

Abstract: Motivated by the enormous business success of E-tailers and their distinct business strategies, this paper analyzes the characteristics of dual online channel competition and the fundamental willingness of an E-tailer to open its marketplace to other retailers while at the same time competing with them. We build game theory models to study the dual-channel competition between an incumbent E-tailer and other online retailers under different supply chain structures. Either the manufacturer or authorized third-party retailers can start an online store in the E-tailer’s marketplace. The results show that the transaction fee charged by the platform and the service level provided to customers play significant roles in deciding the marketplace business strategy—the E-tailer faces complicated issues when these two factors fluctuate. A pure strategy of raising the transaction fee may not always be beneficial and a competitor’s superior service level may help to enhance a rival’s sales price. In the expanded research, dual online channel competition with an unauthorized third-party retailer, which is common in the online marketplace, is also examined.

Keywords: e-commerce; platform; supply chain; transaction fee (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/5/2141/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/5/2141/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:5:p:2141-:d:330789

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().