Volume 57, Number 1, January-February 2023
|157 - 181
|03 February 2023
Channel structure of E-platform encroachment
International Institute of Finance, School of Management, University of Science and Technology of China, No. 96, Jinzhai Road, Hefei 230026, P.R. China
* Corresponding author: firstname.lastname@example.org
Accepted: 8 December 2022
This paper focuses on the supply chain consisting of a manufacturer, a third-party (3P) seller, and an e-platform, while the 3P seller sells products through the e-platform. If the e-platform not only provides a sales channel for the 3P seller, but also determines the retail price and then sells products directly, we call it e-platform encroachment, which creates price competition between the 3P seller and e-platform. We find that the encroachment benefits the manufacturer and e-platform but hurts the 3P seller. And both the manufacturer and 3P seller prefer the price discrimination strategy to the uniform pricing strategy, while the e-platform does not necessarily. The price discrimination strategy encourages the manufacturer to offer the 3P seller a preferential wholesale price as the compensation and to curb the competitive advantage of the e-platform. The two pricing strategies have the same total sales quantity but different allocations across channels. Moreover, we propose a new coordination mechanism to reduce the double marginalization effect and improve supply chain performance. In extensions, we demonstrate numerically how the e-platform should decide the commission rate and compare the e-platform encroachment model with the manufacturer encroachment model to reveal the impact of different encroachment roles on all parties in the supply chain.
Mathematics Subject Classification: 91A40 / 91B50
Key words: Supply chain management / encroachment / channel structure / pricing strategy
© The authors. Published by EDP Sciences, ROADEF, SMAI 2023
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Current usage metrics show cumulative count of Article Views (full-text article views including HTML views, PDF and ePub downloads, according to the available data) and Abstracts Views on Vision4Press platform.
Data correspond to usage on the plateform after 2015. The current usage metrics is available 48-96 hours after online publication and is updated daily on week days.
Initial download of the metrics may take a while.