Collaborative Operation Model with Selling Profit Sharing Strategy for Direct Online Retailing

Abstract

This study focuses on the operation mode choice issue on whether brand owners should use the autonomous or the collaborative operation mode in direct online retailing. Results demonstrate that when the service provider’s investment is relatively effective and the selling profit sharing ratio of the service provider is high, the brand owner should choose the collaborative operation mode. Surprisedly, we find that brand owners in a dual-channel scenario have more motivation to use the collaborative operation mode than those in a single e-commerce channel scenario. The e-commerce service market may have much potential in the future.