Agency, reselling, or hybrid mode? Competing with store brand

Abstract

Platform supply chains are emerging as a new form of global supply chain that encompass reselling, agency selling, and hybrid selling modes. This paper examines the impact of store brand products on the firms’ sales strategies. We consider the selection between three sales modes available to suppliers, both with and without the store brand products: reselling, agency selling, and hybrid selling. Comparing the firms’ optimal strategies shows that the hybrid mode consistently yields greater profits when compared to the agency selling mode. Notably, our findings reveal that firms’ optimal choice of sales mode varies depending on the commission rate. The optimal sales mode differs when the commission rate is lower or higher. In the presence of the store brand products, firms choose the reselling mode only when the commission rate is high and consumers’ perceived value of national brand products is low. Otherwise, equilibrium outcomes are not achieved.