Research On Retailer’s Optimal Pricing Strategy In Advance Selling With Deposit Inflation And Freebies Promotion

With the rapid development of network technology,online shopping presents a more diversified form,which not only brings a huge impact on people’s life,but also gives retailers more sales methods to choose from.For example,advance selling is accepted by more retailers and has been loved by consumers,but for advance selling,there are also many sales forms for retailers to choose,such as discount advance selling,deposit inflation,freebies promotion,etc.Advance selling can reduce the risk of retailers and bring greater discounts to consumers,but the uncertainty of goods during advance selling and the length of delivery time will affect consumers’ evaluation of products and retailers’ earnings.Therefore,it is particularly important to choose the right advance selling mode and how to determine the optimal advance selling price and order volume.This paper has a preliminary understanding of the whole e-commerce industry through literature research,online data collection and other methods.Due to the fierce competition in the e-commerce industry,retailers are forced to adopt some new marketing methods to attract consumers.In this context,we consider two different advance selling strategies,namely deposit inflation and freebies promotion,to solve the problem of optimal advance selling price and order quantity of retailers under the corresponding advance selling strategy,and analyze the influence of different factors on the advance selling strategy.At the same time,it discusses the multiple sales modes of refundable deposit and non-refundable deposit,with and without freebies and with or without advance selling,and obtains the optimal advance selling pricing and order quantity under different advance selling modes in order to maximize the retailer’s expected profit.Finally,the paper summarizes the different advance selling strategies under different circumstances and provides practical guidance for retailers.The results show that when the deposit is not refundable,the retailer’s optimal pricing under the advance selling strategy with inflated deposit is lower than that under the refundable deposit strategy,and the cost of each item,the coefficient of inflation of deposit and the amount of deposit also affect the retailer’s choice.An advance selling strategy is generally more advantageous than a no advance selling strategy.For freebies promotion strategy,the best advance selling price is related to the utility of the freebies and increases with the increase of the practicality of the freebies,while the best profit increases first and then decreases with the increase of the quality of the freebies.