Optimal fresh agricultural products private brand introduction and sourcing strategy considering different power structures

Abstract

AbstractIn recent years, many fresh e‐tailers have introduced private brands (PBs). The introduction of PBs will increase product competition and incur fixed fee for e‐tailers; thus, e‐tailers need to consider whether to introduce PBs and where do they source their fresh products. To address these challenges, this paper develops theoretical models. The results show that introducing PB benefits e‐tailers if the construction fee of the PBs is relatively low. Interestingly, national brand (NB) suppliers have an incentive to negotiate with e‐tailers to order PB products from them. Moreover, the willingness to introduce PBs is influenced by the power structure.