Pricing and bargaining strategy of e-retail under hybrid operational patterns

Dual-channel, as a significant retail strategy, has got more and more attention for academia and industry. While most literature focus on the conflicts between traditional channel and online channel, there are few works consider the conflicts of online retail channels. This paper focuses on the pricing and bargaining strategy of manufacturer and e-retailer under hybrid operational patterns which are adopted by e-commerce platforms. The operational patterns are divided into two types: other-organization e-pattern, such as Amazon, and self-organization e-pattern, such as Alibaba. We consider the commission charge which is collected by self-organization e-platform; and the analysis reveals that a fixed commission only has an effect on the total profit of manufacturer, but a variable commission would influence the wholesale price of other-organization e-platform and e-retail prices of both e-platforms, respectively. The results also suggest that, the wholesale price and the e-retail price are both affected by the service quality and this effect is also influenced by the variable commission. In addition, we also discuss the possibility of the manufacturer and e-retailer adjust their pricing strategy based on big data implementation.