Impressionable or Immune? Examining the Influence of Marquee Sellers in B2B Secondary Market Platforms for IT Products

Abstract

Consumers around the world have moved dramatically toward online platforms. Purchasing goods and services from independent suppliers through digital platforms has become a routine part of daily life. Recently, the COVID-19 pandemic has accelerated the paradigm shift toward digital economy and servitization. Data show that ecommerce sales have grown by $32 billion during the last two years ( https://www.digitalcommerce360.com/article/coronavirus-impact-online-retail/ ). A large part of this ecommerce is on platforms-based models, where management of the platform community remains a difficult problem. One such question often discussed in the platforms context remains: Does acquiring a marquee seller help the platform owner? If so, how exactly? We show that in the specific context of B2B platforms, the impact of a marquee seller’s presence is significantly positive on prices obtained by other sellers on the platform. This is because the marquee seller generates higher prices, given its brand, and these prices become reference prices for other sellers. The managerial implications highlight the importance of acquiring marquee sellers and encourage platform owners to understand the associated price effects. Our paper suggests that platform owners should consider and target sellers with marquee brand names, as they can result in a sugar-rush for prices of other sellers on the platform.