IDEAS home Printed from https://ideas.repec.org/a/taf/tprsxx/v59y2021i10p3017-3041.html
   My bibliography  Save this article

Manufacturer's contract choice facing competing downstream online retail platforms

Author

Listed:
  • Bingbing Liu
  • Xiaolong Guo
  • Yugang Yu
  • Lin Tian

Abstract

Reseller contract and online marketplace contract are two typical supply chain contracts provided by Online retail platforms (ORPs) in online retailing. Manufacturers can either wholesale their products to an ORP using the traditional reseller contract or choose an agency selling contract to sell their products directly to consumers through an online marketplace provided by the ORP. Based on a game model, this paper studies the contract choice strategy for a monopoly manufacturer facing two competing downstream ORPs. The results show that the competition intensity between the ORPs and the order-fulfilment costs critically moderates the choice decision. Specifically, for a given competition intensity (level of order-fulfilment costs), with rising order-fulfilment costs (the downstream competition intensity), the preferred mode for the manufacturer switches from the pure online marketplace mode to the hybrid mode and then to the pure reseller mode. The intuition of this lies in the interaction of the transfer of the pricing rights and the responsibility for order fulfilment. Meanwhile, the conditions to ensure the dominant equilibrium in the competition of ORPs are analysed. Finally, we extend the basic model by relaxing the assumptions about the same proportion fee rate and the fixed order-fulfilment cost.

Suggested Citation

  • Bingbing Liu & Xiaolong Guo & Yugang Yu & Lin Tian, 2021. "Manufacturer's contract choice facing competing downstream online retail platforms," International Journal of Production Research, Taylor & Francis Journals, vol. 59(10), pages 3017-3041, May.
    • Handle: RePEc:taf:tprsxx:v:59:y:2021:i:10:p:3017-3041
    DOI: 10.1080/00207543.2020.1744767
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00207543.2020.1744767
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00207543.2020.1744767?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qiang Wang & Nenggui Zhao & Xiang Ji, 2024. "Reselling or agency selling? The strategic role of live streaming commerce in distribution contract selection," Electronic Commerce Research, Springer, vol. 24(2), pages 983-1016, June.
    2. Yu Tian & Bin Dan & Ting Lei & Molin Liu, 2023. "Supplier encroachment and information transparency on fresh produce e‐commerce platform: Impacts on the traditional channel," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 733-752, March.
    3. Wang, Tong-Yuan & Chen, Zhen-Song & He, Peng & Govindan, Kannan & Skibniewski, Miroslaw J., 2023. "Alliance strategy in an online retailing supply chain: Motivation, choice, and equilibrium," Omega, Elsevier, vol. 115(C).
    4. Zhang, Tao & Tang, Zhongjun, 2023. "Should manufacturers open live streaming shopping channels?," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    5. Yang, Xi & Dai, Bin & Xie, Xia, 2024. "Supplier encroachment strategies in a retail platform with strategic inventory holding behavior," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 187(C).
    6. Li, Hengyu & Chen, Huangen & Chai, Junwu & Shi, Victor, 2023. "Private label sourcing for an e-tailer with agency selling and service provision," European Journal of Operational Research, Elsevier, vol. 305(1), pages 114-127.
    7. Huang, Song & Chen, Yuqing, 2023. "Manufacturer encroachment with competing dual-purpose online retail platforms," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    8. Xu, Xiaoping & Hong, Zhaofu & Chen, Yujing & Cheng, T.C.E., 2023. "When is it wise to use artificial intelligence for platform operations considering consumer returns?," European Journal of Operational Research, Elsevier, vol. 308(3), pages 1188-1205.
    9. Yanting Li & Cuihua Zhang & Chunyu Li & Yong Ma, 2024. "Online channel configuration strategy considering contract manufacturer encroachment and green investment," Electronic Commerce Research, Springer, vol. 24(3), pages 2065-2112, September.
    10. Zhuo, Wenyan & Peng, Jiawu & Wang, Jingru, 2024. "Game theoretical analysis of incumbent platform investment and the supplier entry strategies in an e-supply chain," International Journal of Production Economics, Elsevier, vol. 273(C).
    11. Cheng, Fei & Chen, Tong & Shen, Yuting & Jing, Xiaodong, 2022. "Impact of green technology improvement and store brand introduction on the sales mode selection," International Journal of Production Economics, Elsevier, vol. 253(C).
    12. Jiang, Zhong-Zhong & He, Na & Huang, Song, 2021. "Government penalty provision and contracting with asymmetric quality information in a bioenergy supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 154(C).
    13. Li, Dan & Liu, Yongmei & Hu, Junhua & Chen, Xiaohong, 2021. "Private-brand introduction and investment effect on online platform-based supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    14. Liu, Bingbing & Yu, Yugang & Guo, Xiaolong, 2021. "Simpler and better: Supply chain contracting in the presence of contract unobservability and upstream competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 154(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:tprsxx:v:59:y:2021:i:10:p:3017-3041. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/TPRS20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.