Selling format selection of supply chain in the promotion period

Changsha University of Science and Technology, Changsha, P.R. China

^* Corresponding author: 362408620@qq.com

Received: 29 February 2024
Accepted: 10 April 2025

Abstract

To reduce the inventory costs caused by product surplus, firms usually offer end-of-season discounts to boost sales. With the rise of e-commerce platforms, firms often sell simultaneously through dual channels with platforms and traditional retailers. The cooperation formats between firms and platforms are usually agency selling, reselling, and direct selling. This paper will examine how each supply player selects the optimal selling format by creating a two-period sales model. Our research unveils strategic insights into the optimal selling formats in promotional periods, revealing that the choice hinges on a delicate balance of consumer patience, platform leasing costs, and channel preferences. Manufacturers lean towards direct and reselling formats in times of low consumer patience to swiftly mitigate inventory backlogs, yet shift strategies to consider agency selling when consumer patience is high, aligning with platform costs and channel preferences. E-tailers, in turn, opt for direct selling when platforms excel, leveraging sales efficiency while sidestepping competition, or resort to consignment when platform leasing is economical, thus navigating the competitive landscape with agility. Platforms, prioritizing consumer patience, incline towards direct selling for impatient consumers to capitalize on immediate demand, yet pivot to reselling or agency selling depending on leasing costs, showcasing an adaptive approach to market dynamics. Finally, our findings not only shed new light on the strategic sales format selection in promotional periods but also offer actionable guidance for supply chain players. This research empower them to navigate the dynamic e-commerce landscape and optimize their promotional strategies for enhanced profitability and consumer satisfaction.