How should resale platforms operate the customer-to-business-to-customer mode?

Abstract

Secondhand resale platforms allow consumers to sell idle products. Some resale platforms act only as customer-to-customer (C2C) platforms, whereas others implement the customer-to-business-to-customer (C2B2C) model. Different platforms adopt different C2B2C operational strategies. In this study, we developed a two-period model to investigate a platform’s C2B2C operation strategy and its effects. Two scenarios were considered: third-party platforms (TPs) and platforms built by retailers (RPs). We found that although both TPs and RPs implement the C2B2C mode when idle product refurbishment costs are not high, TPs are more willing to implement the C2B2C mode. Furthermore, platforms should adjust their decisions in C2C transactions when implementing the C2B2C mode. Specifically, RPs may reduce C2C transaction service levels and TPs may decrease C2C transaction fees. We also analyzed the effect of the C2B2C mode on new product demand and found that it depends on the unit cost of new products and the refurbishment cost.