Optimal pricing strategy: rural delivery and service sharing

Purpose While eCommerce logistics has boomed, the urban-rural gap in the last mile logistics infrastructure remains, with the structural imbalance in logistics resources becoming increasingly stark. Rural areas are vast and sparsely populated, and the demand for eCommerce logistics service is less and scattered. This leads to poor last mile logistics in rural areas and low service efficiency. This paper promotes the sharing of logistics resources to improve service efficiency by optimizing the logistics resource service sharing pricing strategy. Our results provide reference for the decision-making of the delivery service sharing mode and pricing of eCommerce logistics in rural areas. Design/methodology/approach This paper applies a game theoretic model the sharing of the rural last mile delivery service, specifically in the distribution service of two competing players operating in one region. The logistics service pricing decision-making model of eCommerce players under the non-sharing/sharing service mode is built, and the optimal pricing strategies obtained. Findings The optimal distribution service sharing willingness decision is given based on cost, consumer price-sensitivity and market potential. We find that logistics resource service sharing should prevail, albeit within an operating range. Our results provide reference for the decision-making of delivery service sharing mode and pricing of eCommerce logistics in rural areas and help to improve the quality of service for eCommerce delivery. Originality/value This work provide decision-making references for eCommerce delivery firms to know when switch from one delivery mechanism to another by choosing the right delivery sharing strategy and logistics service pricing, and thus enhance the quality of last mile delivery service in rural areas.