B2C cross-border E-commerce logistics mode selection considering product returns

Long delivery lead times and costly transportation postage are significant characteristics of B2C cross-border e-commerce and logistics. They engender preference inconsistencies and reversals in customers, which can lead to product returns. The aim of this study is to enable retailers to select the optimal cross-border logistics mode that fulfils their marketing strategies while taking product returns into consideration. We propose a novel way to describe customer utility by incorporating customer time preferences, and construct three cross-border logistics models. The theoretical and numerical analyses indicate that, if retailers want to eliminate or reduce their product return rates, they can adjust their delivery lead times in each logistics mode under various product procurement and sales prices, commodity tariffs, international and domestic postage and operating costs. In particular, the O2O mode is always a better option for retailers than the O2D mode, and under certain conditions, the D2D mode is better for retailers than the O2O mode. To increase market demand, the O2O mode is optimal for retailers selling high-priced products, while the O2D mode is optimal for retailers selling low-priced products. This study also provides suggestions for overseas manufacturers. These findings are applicable to B2C cross-border e-commerce, cross-border logistics, and overseas production.