In-Depth Cooperation or Not? The Choice of Retailer and E-Commerce Platform Based on the Consumer Membership System

With the rise of the sharing economy, more and more retailers join the e-commerce platform to expand sales channels. As an important means to improve consumer retention rate, the membership system is widely used in major e-commerce platforms. In this paper, we develop a model to discuss the different cooperation strategies between the e-commerce platform who has a membership system and the retailer who sells product to heterogeneous consumers. We find that the impact of membership service quality on the sales price, commission fee and membership fee is completely opposite under two cooperation contracts. The membership fee and commission fee all rise as the proportion of high-demand consumers increases under two cooperation contracts, and consumer type has nothing to do with sales price under the simple cooperation contract. As an interesting result, when the third-party logistics fee is relatively low, the simple cooperation contract becomes a win-win strategy, and the social welfare is higher than the outcome of the in-depth cooperation contract, while the consumer surplus is lower. When the third-party logistics fee is relatively high, the retailer prefers the in-depth cooperation contract, but the platform always chooses the simple cooperation contract. In addition, we also discuss the results when the retailer launches self-delivery and centralized decision. We find that the win-win situation still exists under the simple cooperation contract.