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Pricing and bargaining strategy of e-retail under hybrid operational patterns

  • Big Data Analytics in Operations & Supply Chain Management
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Abstract

Dual-channel, as a significant retail strategy, has got more and more attention for academia and industry. While most literature focus on the conflicts between traditional channel and online channel, there are few works consider the conflicts of online retail channels. This paper focuses on the pricing and bargaining strategy of manufacturer and e-retailer under hybrid operational patterns which are adopted by e-commerce platforms. The operational patterns are divided into two types: other-organization e-pattern, such as Amazon, and self-organization e-pattern, such as Alibaba. We consider the commission charge which is collected by self-organization e-platform; and the analysis reveals that a fixed commission only has an effect on the total profit of manufacturer, but a variable commission would influence the wholesale price of other-organization e-platform and e-retail prices of both e-platforms, respectively. The results also suggest that, the wholesale price and the e-retail price are both affected by the service quality and this effect is also influenced by the variable commission. In addition, we also discuss the possibility of the manufacturer and e-retailer adjust their pricing strategy based on big data implementation.

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Notes

  1. In this paper, e-retailer refers to the owner of other-organization e-platform.

  2. Line VC means the impact curve of the service quality on initial wholesale price under variable commission. (similarly hereinafter).

  3. Line FC means the impact curve of the service quality on initial wholesale price under fixed commission. (similarly hereinafter).

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Acknowledgments

The authors are grateful to the editors, the associate editor, and the two anonymous referees for their valuable comments and suggestions, which have significantly helped improve the quality of this paper. The authors are indebted to Dr. Weimin Zheng and Yue Jiang for their insightful discussions. This paper is partially supported by Guangdong NSF 2015A030313782, SUSTC Startup Fund Y01236115, Y01236215, and SUSTC basic research fund (FRG-SUSTC1501A-45).

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Authors and Affiliations

  1. Department of Management Science, School of Management, Xiamen University, No. 422, Siming South Rd., Xiamen, 361005, Fujian, People’s Republic of China

    Shuihua Han, Yufang Fu & Bin Cao

  2. Department of Electrical and Electronic Engineering, South University of Science and Technology of China, No. 1088, xueyuan Rd., Shenzhen, 518055, Guangdong, People’s Republic of China

    Zongwei Luo

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  1. Shuihua Han
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Correspondence to Yufang Fu or Zongwei Luo.

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Han, S., Fu, Y., Cao, B. et al. Pricing and bargaining strategy of e-retail under hybrid operational patterns. Ann Oper Res 270, 179–200 (2018). https://doi.org/10.1007/s10479-016-2214-4

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