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Optimal contract design for live streaming shopping in a manufacturer–retailer–streamer supply chain

Author

Listed:
  • Yi He

    (Hainan University)

  • Lidong Chen

    (Hainan University)

  • Jingjing Mu

    (China Aerospace Science and Technology Corporation)

  • Azmat Ullah

    (Hainan University)

Abstract

This study considers a manufacturer–retailer–streamer supply chain, in which the retailer first purchases products from a manufacturer and then sells them to consumers through a streamer. In the live streaming context, the retailer usually cooperates with the streamer by providing three different contracts: only a commission of the sale (OC), only a fixed fee (OF), and a commission of the sale and fixed fee (CF). Therefore, this study develops a theoretical model to investigate the effects of these three contracts on supply chain members’ optimal decisions and profits. The following results were obtained: (1) the retailer prefers an OC contract with a high-ability streamer, and the manufacturer benefits from this contract. Additionally, the manufacturer, retailer, and high-ability streamer can achieve a win–win–win outcome in certain cases. Furthermore, the retailer is willing to sign an OC contract with a low-ability streamer when the fixed fee of the OF contract is high. (2) The retailer prefers to cooperate with a low-ability streamer through an OF contract when the fixed fee is low. (3) The CF contract is the most profitable alternative for the retailer when the total commission rate is low and the fixed fee is medium.

Suggested Citation

  • Yi He & Lidong Chen & Jingjing Mu & Azmat Ullah, 2024. "Optimal contract design for live streaming shopping in a manufacturer–retailer–streamer supply chain," Electronic Commerce Research, Springer, vol. 24(2), pages 1071-1093, June.
    • Handle: RePEc:spr:elcore:v:24:y:2024:i:2:d:10.1007_s10660-022-09591-3
    DOI: 10.1007/s10660-022-09591-3
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