Collaborative Rebate Strategy of Business-to-Customer Platforms Considering Recycling and Trade-Ins Simultaneously

Guojun Ji, Zhongfeng Sun and Kim Hua Tan
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Guojun Ji: School of Management, Xiamen University, Xiamen 361005, China
Zhongfeng Sun: School of Management, Xiamen University, Xiamen 361005, China
Kim Hua Tan: Nottingham University Business School, The University of Nottingham Jubilee Campus, Nottingham NG8 1BB, UK

Sustainability, 2021, vol. 13, issue 4, 1-19

Abstract: B2C (business to customer) platforms like JD.com and Suning.com often cooperate with professional recycling companies, and implement recycling programs and trade-in programs simultaneously, especially for electronic products. The former means that platforms recycle old products from customers with cash, whereas the latter means that platforms allow customers to trade in old products for new ones. Under this background, we discuss how to develop the optimal rebate strategy for B2C platforms based on the market recovery price of old products, and give the optimal rebate prices and feasible conditions of single-rebate, dual-rebate, and none-rebate strategies. The results show that the single-recycling rebate strategy is dominant when the residual value of old products is low, and when the residual value of old products is high, platforms should choose in turn the single-trade-in rebate strategy, dual-rebate strategy, single-recycling rebate strategy, and non-rebate strategy with the increase in the cost of new products. In order to obtain higher profits, B2C platforms should provide appropriate rebates to better coordinate the recycling program and the trade-in program on the basis of the market recovery price, the residual value, and the durability of old products as well as the cost, the selling price, and the upgrade range of new products.

Keywords: trade-ins; recycling rebate; B2C platforms; collaborative rebate (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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