Dynamic Pricing Strategy For An Online Retailer With Multi-B2C Platform Stores

In China, e-commerce developed very fast in recent years, the scale of onlineretailing increased year by year. More and more enterprises start with online retailing.Some build their own websites, but others set up online stores on platform websites, orboth, to achieve more customers. Many enterprises set up several online stores ondifferent platform websites. Some B2C platform websites are platforms from the outset,such as tmall.com, but others are opened from pure B2C websites, such asdangdang.com and360buy.com. All these platforms have their own character, so theirrequirements and services for enterprises can be different. E-tailers have to decidechoose which two platforms to set up stores first when they start with online retailing.As online stores have no time and location limitations, enterprises have to coordinateprice and inventory between online stores.We only study the two online stores case. Base on the existing specific patterns, weinduce three different models, that is, independent inventory model, half-independentinventory model and unified inventory model, to analyze the questions we raised ahead.In this paper, we follow the method for seasonal products; study an e-tailer coordinatestwo online stores with dynamic pricing policy. Through theoretical analysis, we presentthe optimal dynamic pricing policy and properties corresponding, and we also give outthe structural properties of revenue function. Then we analyze the price coordinationeffect and inventory pooling effect, as well as the optimal pricing policy with sales cost.Through numerical experiments we study the coefficient sensitivity, and consider howthe sales cost affect e-tailer’s revenue and optimal pricing. We also compare the differentbetween dynamic pricing and static pricing, as well as discriminating pricing and unifiedpricing. At last we study the initial inventory of different model.Base on the analysis, we find that sales cost make e-tailer’s revenue decrease, butthe optimal prices increase little; and the revenue of half-independent inventory modeland unified inventory model are higher than independent inventory model, but undersome conditions there are almost no differences. The inventory and inventory allocationaffect the revenue differences between dynamic and static pricing as well asdiscriminating and unified pricing policy.