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Measuring modularity on manufacturers' distribution channel strategies: direct selling, reselling or agency selling

Author

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  • Qinyu Song
  • Meng Yang
  • Yaodong Ni

Abstract

In recent years, consumers not only pursue cost-effective products but also begin to attach importance to individual customisation. This paper investigates the effects of the modularity level on a manufacturer's three channel strategies. We find that the modularity level under reselling and agency selling is lower than that under direct selling. Considering modularity, the retail price under agency selling is lower than that under direct selling. Therefore, when the consumer pays attention to the modular design, if the commission fee is high (low), the manufacturer will adopt the direct selling (agency selling) model. However, when the consumer's customisation concern is weak, the manufacturer prefers the reselling format. In addition, referring to dual distribution channels, the manufacturer may authorise the modular design to the retailer when the modular-sensitive the parameter is high. [Submitted: 29 August 2023; Accepted: 5 March 2024]

Suggested Citation

  • Qinyu Song & Meng Yang & Yaodong Ni, 2025. "Measuring modularity on manufacturers' distribution channel strategies: direct selling, reselling or agency selling," European Journal of Industrial Engineering, Inderscience Enterprises Ltd, vol. 19(4), pages 539-571.
    • Handle: RePEc:ids:eujine:v:19:y:2025:i:4:p:539-571
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