TY - JOUR
T1 - Offline supplementary service strategies for the online marketplace
T2 - Third-party service or marketplace service?
AU - Zheng, Zhijun
AU - Li, Gang
AU - Cheng, T. C.E.
AU - Wu, Feng
N1 - Funding Information:
This work was supported in part by the National Natural Science Foundation of China under Grant 71832011 and the Science and Technology Innovation Team Plan of Shaanxi Province under Project 2020TD-006. Cheng was supported in part by The Hong Kong Polytechnic University under the Fung Yiu King-Wing Hang Bank Endowed Professorship in Business Administration.
Publisher Copyright:
© 2022 Elsevier Ltd
PY - 2022/8
Y1 - 2022/8
N2 - Offline supplementary service that supports and enhances the core product is one of the key factors leading to the success of online sellers and the online marketplace. We explore the optimal supplementary service strategies for the online seller and online marketplace. We consider three kinds of supplementary service, namely unauthorised service (UAS), third-party authorised service (TAS), and marketplace authorised service (MAS). We identify that the marginal cost-revenue ratio (MCRR) shapes the service strategies of the online seller and marketplace. The seller prefers TAS when the MCRR is low but prefers UAS if it is high. However, when the MCRR is moderate, the seller provides both UAS and TAS simultaneously. In addition, we show that the marketplace offers MAS to the seller when the commission rate is relatively low or relatively high. The offering of MAS results in a win–win outcome for the seller and marketplace, and engenders a subsidising effect for the seller and consumer, as well as a revenue-enhancement effect for the marketplace. Interestingly, we find that a higher commission rate not only decreases the selling price but also increases the demand for the product-MAS bundle.
AB - Offline supplementary service that supports and enhances the core product is one of the key factors leading to the success of online sellers and the online marketplace. We explore the optimal supplementary service strategies for the online seller and online marketplace. We consider three kinds of supplementary service, namely unauthorised service (UAS), third-party authorised service (TAS), and marketplace authorised service (MAS). We identify that the marginal cost-revenue ratio (MCRR) shapes the service strategies of the online seller and marketplace. The seller prefers TAS when the MCRR is low but prefers UAS if it is high. However, when the MCRR is moderate, the seller provides both UAS and TAS simultaneously. In addition, we show that the marketplace offers MAS to the seller when the commission rate is relatively low or relatively high. The offering of MAS results in a win–win outcome for the seller and marketplace, and engenders a subsidising effect for the seller and consumer, as well as a revenue-enhancement effect for the marketplace. Interestingly, we find that a higher commission rate not only decreases the selling price but also increases the demand for the product-MAS bundle.
KW - E-commerce
KW - Marketplace
KW - Online retailing
KW - Service strategy
UR - http://www.scopus.com/inward/record.url?scp=85133431247&partnerID=8YFLogxK
U2 - 10.1016/j.tre.2022.102810
DO - 10.1016/j.tre.2022.102810
M3 - Journal article
AN - SCOPUS:85133431247
SN - 1366-5545
VL - 164
JO - Transportation Research Part E: Logistics and Transportation Review
JF - Transportation Research Part E: Logistics and Transportation Review
M1 - 102810
ER -