Reselling Or Agency Selling? Impact of Online Intermediaries' Information Sharing with Manufacturers and Retailers

Download or read book Reselling Or Agency Selling? Impact of Online Intermediaries' Information Sharing with Manufacturers and Retailers written by Qiang Lin and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Recently, manufacturers have not only sold through retailers, but also started to directly access customers via online intermediaries by paying a proportional fee. This paper studies the incentive for the intermediaries' vertical demand information sharing with the manufacturers and retailers under the reselling and agency selling formats, and examines the impact of information sharing on selling format selection. We consider an e-commerce supply chain consisting of an online intermediary, a manufacturer, and an online retailer. The online retailer purchases products from the manufacturer and directly sells through the intermediary, whereas the manufacturer can sell through the online retailer and the intermediary (i.e., reselling), or only through the retailer and directly through the intermediary (i.e., agency selling). Our analysis shows that under no information sharing, a win-win outcome for the manufacturer and the intermediary might be reached (i.e., both their ex ante profits increase) when they simultaneously adopt the reselling or agency selling format. However, we find that sharing information with both the manufacturer and the retailer would make the reselling format detrimental to the manufacturer or the intermediary. Moreover, when the proportional fee is low (the proportional fee is intermediate), both the selling formats might not (might) lead to a win-win outcome if sharing demand information with only the manufacturer. Finally, we confirm that regardless of the reselling or agency selling format, sharing information with only one member is more beneficial for the intermediary rather than with both or no members. Specifically, the intermediary prefers to share information with the manufacturer or the retailer (only the manufacturer) under the reselling (agency selling) format. Only the agency selling format can lead to a win-win outcome in this case if the intermediary discloses information to the retailer under the reselling format.