Online sales mode selection of competing suppliers in a fresh product supply chain

Abstract

This paper studies the selection of sales mode in a fresh product supply chain consisting of two competing suppliers and an e-tailer providing online platform. Suppliers can choose an online sales mode and provide freshness-keeping service. Considering the product freshness level, platform commission, supplier’s market share and cross-price coefficient between two channels, we study three sales scenarios and obtain the optimal decision and profit of the two suppliers and the e-tailer. Then, we get some conclusions through theoretical and numerical analysis. The lower the commission rate charged by online platform, the less the e-tailer likes the marketplace mode. The best action of the suppliers is also related to this commission. The lower the commission rate, the more the suppliers tend to choose the marketplace mode. And their best action is different under different sales scenarios. If the two suppliers adopt different modes, the one who chooses the marketplace mode will have more advantage. We also get an interesting conclusion that when suppliers make the same choice, the commission does not affect their competition and decision-making.