E-retailer information sharing with suppliers online selling mode

This paper examines the e-retailer’s incentive to share demand information with upstream competing suppliers who can choose agency selling mode or reselling mode to sell their products. In contrast to conventional wisdom, our study shows that, when agency selling mode is adopted, the e-retailer voluntarily shares information. Specifically, when the commission fee rate is relatively high (low), the e-retailer shares information with no (both) supplier (s) and both suppliers will choose reselling (agency selling) mode; when the commission fee rate is neither too high nor too low, the e-retailer’s information sharing strategy is also related to demand uncertainty and competition intensity. In addition, sharing information with one supplier will encourage competing suppliers to choose asymmetric online selling modes under certain circumstances, and the e-retailer is more willing to exclusively share information with the supplier adopting agency selling mode. Our results show that the e-retailer can use information sharing as a tool to steer suppliers’ online selling mode choices.