Abstract:

The rapid development of e-commerce has accelerated the evolution of platform sales modes. Agency selling， a direct sales model for suppliers， can improve channel efficiency through a revenue sharing mechanism. Unlike the traditional reselling mode， where the platforms control the sales price， the agency model allows suppliers to directly set prices while paying a commission to the platform. This mode has been widely adopted by giant platforms such as JD.com and Amazon. However， many manufacturers continue to use the reselling mode. Consequently， it is crucial for platforms to identify which mode is more optimal. Moreover， many platforms often choose different sales modes for the same brand， driven by the intensity of platform competition and platform power difference.Motivated by practical examples that competing platforms adopting different sales modes， a stylized supply chain consisting of one supplier and two competing platforms is analyzed， differentiated by market power. Four distinct channel modes are developed： （a） Mode RR， where both platforms adopt the reselling mode； （b） Mode AA， where both platforms use the agency selling mode； （c）Mode AR， where platform PA adopt the agency selling mode while platform PB uses the reselling mode； and （d）Mode RA， where platform PA adopt the reselling mode while platform PB uses the agency selling mode. The sequence of the game divides into two stages： channel mode selection and pricing stages. In the channel mode selection stage， platforms choose their preferred sales mode. In the pricing stage， the supplier and platforms determine wholesale or retail prices based on the chosen four channel modes. Using backward induction， the equilibrium outcomes are derived and the profits across the four models are compared.The following results are derived. First， the channel mode choice of platforms is influenced by the competition intensity and the platform's market power. When competition is low， RR mode is preferred， while the AA mode becomes optimal under high competition. When competition is moderate and there is a significant power imbalance between platforms， the RA mode becomes the equilibrium strategy. Second， the impact of different channel modes on both the supplier and the platform varies. Under weak competition， the AA mode is more advantageous for the supplier， whereas in highly competitive environments， the RR mode benefits the supplier more. When competition is moderate， the AR mode is optimal for the supplier. Furthermore， under moderate competition， if platform PA holds weaker market power， both the platforms and the supplier can achieve a win-win-win situation under either the RR or AA modes. Third， these findings remain robust even when considering variations in supplier channel costs or differences in platform commissions. Specifically， an increase in supplier channel costs reduces the likelihood of the AA mode being dominant， while a rise in platform PB's commission makes the AA mode more attractive.The research findings offer significant managerial implications for platforms and suppliers. First， platforms should consider three key factors when making channel decisions： the level of competition， the disparity in platform power， and commission. In less competitive markets， platforms benefit more from adopting the reselling mode. However， in a competitive environment， the optimal channel mode for platforms does not necessarily align with maximizing supplier profitability. Therefore， suppliers should adapt their pricing strategies in response to the platforms’ chosen channel mode strategies.

Key words: reselling, agency selling, platform competition, platform power, channel mode selection