488 / 2024-04-25 16:34:16

Supplier Encroachment via E-commerce Platform

supply chain management, encroachment, e-commerce, dual-channel

The rapid development of e-commerce platforms has made it easier for upstream suppliers to sell their products directly in the retail market. This study aims to examine the decision-making process of supplier encroachment into the retail market via an e-platform. Our findings suggest that the commission fee rate has a crucial impact on the supplier’s encroachment strategy and each firm’s performance. When the commission fee rate falls below a certain threshold, the supplier encroachment can benefit all supply chain members. However, if the rate exceeds this threshold, increased downstream competition will weaken the supplier encroachment’s wholesale price reduction effect, and thus dampen the retailer’s profit. Furthermore, as the commission fee rate continues to increase, the supplier truly encroaches on the market, which can be detrimental to all supply chain members. As the commission rate exceeds a high threshold, the supplier will not sell any products on the e-platform and will ultimately be unwilling to partner with the e-platform for encroachment. In addition, we investigated the scenario where the platform plays a role in determining the commission fee rate.