The Impact of Sales Modes: Implementing Trade-in Programs in E-Commerce Supply Chains and Selecting Recycling Channels

As an effective approach to boosting consumption and facilitating the recycling of consumer goods, trade-in programs have been widely adopted by branders and e-commerce platforms. A platform supply chain system comprising e-commerce platforms and branders is investigated in this paper for this purpose. We construct a two-stage dynamic game model encompassing eight scenarios, discussing the provision of trade-in programs and product recycling issues under the resale and agency selling modes. Below are the key findings: (1) Trade-In Programs: In the resale mode, both branders and platforms prefer to adopt self-recycling when market potential is large, while opting for recycling undertaken by the other party when market potential is small. In the agency selling mode, branders prefer to adopt self-recycling (B-II) when fixed costs are high and the salvage value of used products is high, while platforms choose platform-led recycling (P-II) when fixed costs are low and the salvage value of used products is high. (2) Product Recycling: In the resale mode, branders should opt for self-recycling when facing high fixed costs, small market potential, and high salvage values, while outsourcing is more appropriate when salvage values are low. When the market potential is low, the platform ought to prefer self-recycling if the salvage value is either sufficiently high or sufficiently low; otherwise, outsourcing is preferable. In the agency selling mode, when the salvage value of used products is relatively high, platforms tend to have a free-riding mentality. When platforms provide trade-in programs, they will prioritize self-recycling if the salvage value is higher. In contrast, branders consistently achieve maximum profits when platforms adopt self-recycling. (3) Selection of Selling Mode: Branders always prefer the agency selling mode, while platforms’ mode selection depends on the trade-off between salvage value and commission rate. This study provides strategic insights for platform-based supply chain decisions.