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Manufacturer’s online selling strategies under spillovers from online to offline sales

Author

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  • Lin Chen
  • Guofang Nan
  • Minqiang Li
  • Bing Feng
  • Qiurui Liu

Abstract

In this paper, we investigate a manufacturer’s online selling strategy choice between wholesale selling and agency selling, and discuss its impact in the presence of spillovers from online to offline sales. We find that the manufacturer’s optimal online selling strategies vary with consumers’ online channel acceptance and the extent of the spillover effect. In particular, when the online channel acceptance is high, the manufacturer prefers the agency selling strategy. When the online channel acceptance is moderate, if the sale in the online channel leads to a negative spillover effect on demand in the offline channel, the manufacturer has an incentive to adopt the wholesale selling strategy; otherwise, the agency selling strategy is a preferred choice for the manufacturer. When the online channel acceptance is low, if the sale in the online channel leads to a significant negative or a positive spillover effect on demand in the offline channel, the manufacturer should adopt the agency selling strategy; otherwise, reselling the products to an e-tailer is an optimal choice. Moreover, under certain conditions, we find a “win-win-win” result for the manufacturer, the offline retailer, and the online platform by adopting the agency selling strategy. Finally, we show that two types of spillover (i.e., stimulation effect and cannibalization effect) have different influences on supply chain participants.

Suggested Citation

  • Lin Chen & Guofang Nan & Minqiang Li & Bing Feng & Qiurui Liu, 2023. "Manufacturer’s online selling strategies under spillovers from online to offline sales," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 74(1), pages 157-180, January.
    • Handle: RePEc:taf:tjorxx:v:74:y:2023:i:1:p:157-180
    DOI: 10.1080/01605682.2022.2032426
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    Cited by:

    1. Shigong Lv & Yanying Lv & Da Gao & Lulu Liu, 2023. "The Path to Green Development: The Impact of a Carbon Emissions Trading Scheme on Enterprises’ Environmental Protection Investments," Sustainability, MDPI, vol. 15(16), pages 1-15, August.
    2. Arora, Ayesha & Jain, Tarun, 2024. "Data sharing between platform and seller: An analysis of contracts, privacy, and regulation," European Journal of Operational Research, Elsevier, vol. 313(3), pages 1105-1118.
    3. Jiajun He & Xin Fan & Lin Chen & Haoruo Chen & Jin Luo & Zirui Huang, 2023. "Influencing Factors of the Post-Relocation Support Policy’s Satisfaction Degree for Rural Household: A Case Study of County M, Sichuan Province," Sustainability, MDPI, vol. 15(12), pages 1-21, June.
    4. Lin Chen & Ting Dong & Jin Peng & Dan Ralescu, 2023. "Uncertainty Analysis and Optimization Modeling with Application to Supply Chain Management: A Systematic Review," Mathematics, MDPI, vol. 11(11), pages 1-45, May.
    5. Joshi, Raunak & Basu, Sumanta & Jonnalagedda, Sreelata & Avittathur, Balram, 2023. "Multichannel retailer’s channel choice and product pricing: Influence of investment in fit-disclosing technology by competing retailers," International Journal of Production Economics, Elsevier, vol. 262(C).

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