Joint Channel and Logistics Selection Strategies in an E-Commerce Supply Chain with a Capital-Constrained Supplier

Abstract

Some prominent e-commerce giants, such as Amazon and JD.com, have established their own logistics service and shared it with other merchants. In this paper, we study the channel (reselling channel or agency channel) and logistics service (platform’s logistics or third-party logistics) selection strategies in an e-commerce supply chain composed of a limited capital supplier and a platform within the consideration of the supply chain finance. We show that the supplier’s channel and logistics service selection strategies depend on the cost coefficient of the platform’s logistics service and the production cost. Interestingly, the supplier prefers the reselling channel rather than the agency channel with the platform’s logistics service. This explains why the merchants in JD.com rarely use JD.com logistics in the agency channel. From the perspective of the platform, the platform may prefer the supplier to use third-party logistics service to deliver goods in the agency channel particularly when the cost coefficient of the platform’s logistics service is relatively large. Furthermore, the platform will put in more effort level aimed at enhancing the logistics service in the reselling channel.