Research On Reselling Strategy Of E-commerce Platform Under The Option Of "Exit And Direct Selling" By Third-party Sellers

An e-commerce platform acts as a two-sided platform that receives commissions by facilitating transactions between third-party sellers and consumers,and it can also sell goods directly to consumers.The latter,called platform’s own channel,may help e-commerce platforms earn more than commissions,so e-commerce platforms have an incentive to enter the third-party seller market by launching their own channels.For example,Amazon had included 3% of non-self-supporting items sold by third-party sellers within 10 months.However,platform’s own channel tends to cannibalize the market of third-party sellers,so third-party sellers may feel dissatisfied with platform’s own channel or even quit the platform.However,there is a lack of research in the literature on the impact of the option of "exit and direct sales" by third-party sellers on platform self-support,i.e.,third-party sellers can choose to exit the platform and open direct sales channels after the platform’s own channel enters the market.At this point,for the e-commerce platform,the withdrawal of third-party sellers not only makes the e-commerce platform directly lose commission revenue,but also exposes it to competition from third-party sellers’ direct sales channels,so the e-commerce platform needs to carefully weigh whether it should enter the market when faced with the option of third-party sellers’ "exit and direct sales".The basic model in this paper considers a third-party seller who buys from a manufacturer and sells the goods to consumers on the e-commerce platform,while the e-commerce platform,for the purpose of price control and more sales revenue,considers entering the market by launching its own channel,sourcing similar goods from the same manufacturer and selling them to consumers through the platform’s own channel,thus competing with the third-party seller.In this model,it is found that the e-commerce platform and the manufacturer always benefits from launching platform’s own channel to enter the market,while the profit of the third-party seller always suffers as a result,and as the entry of platform’s own channel gives consumers an additional channel to choose from and third-party sellers respond to competition by reducing prices,total market demand will increase.Based on the basic model,this paper introduces an “exit and directly selling” strategy for the third-party seller to deal with e-commerce platform entry,and interesting changes in the results when the e-commerce platform face this exit threat from the third-party seller.The study shows that platform’s own channel entry is no longer always the dominant strategy for e-commerce platforms.When consumer acceptance of a third-party seller’s direct channel is high,e-commerce platforms tend to choose not to enter the market,where the threat of “exit and directly selling” from third-party sellers is effective,and when consumer acceptance of a third-party seller’s direct channel is low or when consumer acceptance of an e-commerce platform’s own channel is high,the threat of “exit and directly selling” from third-party sellers is no longer effective.The e-commerce platform will choose to launch its own channels to enter the market,regardless of whether the third-party sellers stay on the platform at this time.In addition,the launch of a platform’s own channel(both when third-party sellers remain on the platform and when they exit and launch a direct channel)is almost always beneficial to manufacturers,so manufacturers should encourage the entry of e-commerce platform.This paper discusses how e-commerce platforms should adopt a their own channel strategy to enter the market when faced with the threat of “exit and directly selling”by third-party sellers,and also proposes an “exit and directly selling” strategy for third-party sellers,and discusses the effectiveness of the threat of “exit and directly selling” by third-party sellers,hoping to inspire e-commerce platform owners and third-party sellers in practice.