Optimal Channel Strategy in E-Commerce under Revised Consumer Preferences and Endogenous Commission Rates
Year: 2025
Type: article
Abstract: The rapid growth of e-commerce has fundamentally reshaped consumer shopping behavior, with online channels now surpassing physical retail in both usage and sales volume.This shift challenges traditional channel strategy models that assume consumers derive higher utility from offline shopping.Motivated by these changes, we investigated a manufacturer's optimal channel strategy in the context of e-commerce, considering marketplace selling, reselling, and dualchannel configurations.We developed a game-theoretic model featuring heterogeneous consumers who, unlike in prior studies, exhibit a stronger preference for online channels.ur key findings are as follows: (1) Under exogenous commission rates, the optimal strategy depends on the commission level, favoring marketplace selling at low rates, dual-channel at moderate rates, and reselling at high rates; (2) When commission rates are endogenous, platforms strategically lower commissions to retain the manufacturer, making marketplace or dual-channel strategies more attractive; (3) The presence of retailer competition shifts the optimal strategy toward reselling under exogenous rates and toward marketplace under endogenous rates; and (4) The dual-channel configuration yields the lowest profit when consumer online preference is moderate.This study contributes to the distribution channel literature by incorporating evolving consumer preferences, modeling commission rate endogeneity, and examining their joint influence on channel structure decisions in the digital marketplace.
DOI: 10.31387/oscm0630502
Authors: Cheng-Hsun Hsieh, Lu Hsiao, Nora Nuo-Yin Wang
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4416127360