Online channel introduction under contract negotiation: Reselling versus agency selling

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Abstract
This study investigates manufacturers' online channel introduction strategies by considering two typical retailing formats, namely, reselling and agency selling. Online spillover effect and contract negotiation are considered to make the model more consistent with practice. We find that with a strong bargaining power, the manufacturer will always be profitable when it introduces online channels, whether it is reselling or agency selling. Meanwhile, agency selling is always profitable for the manufacturer than reselling. Interestingly, we find that an incentive alignment exists when two online channels are introduced, where agency selling is profitable for both the manufacturer and the e‐commerce platforms (EPs).
Funding Information
  • Fundamental Research Funds for the Central Universities
  • Natural Science Foundation of Guangdong Province (2021A1515012211, 2020A1515111044)
  • National Natural Science Foundation of China (71772191, 71701221, 71901227)

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