Cooperation strategies for e-commerce platforms with seller classification

Abstract

Purpose The purpose of this paper is to study the cooperation and pricing strategies for e-commerce platforms when considering seller classification. Design/methodology/approach E-commerce platforms serve to facilitate trade and generate revenue from the participants. By classifying the sellers in the market into two types (the individual sellers vs the professional sellers), the authors examine how the interaction between the two types of sellers affects the platform’s cooperation and pricing decisions. Specifically, the authors compare two cooperation strategies for the platform: cooperating only with the professional sellers (strategy I); and cooperating with both the two types of sellers (strategy II). Findings When the platform attractiveness for the professional sellers is high enough, strategy II is absolutely beneficial than strategy I; whereas when the platform attractiveness for the professional sellers is low and the performance requirement of the individual sellers is relatively high, strategy I will be more beneficial. Practical implications For a platform choosing strategy II, it should make effort to differentiate between the different types of sellers by the product or service quality. Originality/value The paper is among the first to study the cooperation and pricing strategies for the e-commerce platform with seller classification.