Identifying effective signaling approaches for remanufacturing

Abstract

Remanufacturing is a typical circular mode, but the sales of remanufactured products remain limited. Learning from manufacturers, remanufacturers have undertaken various circular supply chain management (CSCM) efforts to improve products' quality, delivery and service, and at the same time they have set up shops on online platforms to enhance their product sales. Meanwhile, online platforms offer diverse signaling approaches that can reflect remanufacturers' CSCM operational performance, including the average product rating by former customers that reflects products' quality, the product-featured label by a platform that reflects products' quality and delivery, and related commitments from remanufacturers that reflect products' quality and service. However, it remains unclear how online signaling approaches reflecting remanufacturers' CSCM operational performance impact product sales. Grounded in signaling theory and using 564 sales data from 48 remanufacturers and 13 manufacturers on Amazon.com, this study reveals that both the average product rating and the product-featured label, which reflect remanufacturers' CSCM operational performance in products' quality and delivery, are positively correlated with remanufacturers' product sales. However, in comparison to manufacturers, the positive effect of average product ratings is weaker for remanufacturers. In addition, related commitments released by remanufacturers, reflecting their CSCM operational performance in products' quality and service, have a negative impact on product sales. Interestingly, when remanufacturers achieve a higher average product rating or receive the “Amazon's Choice” label, their commitments have an insignificant impact on product sales, in contrast to manufacturers that experience a negative effect.