596 / 2024-04-26 15:24:37

Supply chain channel configuration with power imbalance and spillovers under platform retailing

channel selection power; platform retailing; spillover effect

 This study examines how the channel selection power and the brand spillovers affect firms’ channel configuration strategies in a platform retail market. We consider four modes (mode rr, ar, ra, and aa) according to different sales models, in which manufacturers have the channel selection power, while the weak-brand manufacturer will consider whether to implement the brand spillover strategy or not. Some intriguing findings are derived. First, the equilibrium channel structure mainly depends on channel selection power, the degree of complementarity, the commission rate, and the brand spillover effect. Second, manufacturers will only choose to resell when the commission rate or the degree of complementarity is high, while when both of them are relatively low, agency selling is a better choice. Third, when manufacturers have the channel option, modes rr, ar and aa are the optimal channel configurations, while mode ra will be excluded and brand spillover effect will further make mode aa a good choice for the manufacturer. Finally, having channel selection power may result in a triple win for the three firms. Meanwhile, a stronger channel selection power does not always benefit consumers.