Impact of E-commerce environment on selection of sales methods considering delivery lead time of goods

Abstract

In this study, we discuss a brick-and-mortar sales (the existing sales method through the sales channel 1) and an online sales under an e-commerce environment (the sales channel 2). We focus on each differences of goods return ratios and delivery lead-times to a customer through both sales channels for a selling period. Concretely, we consider a parallel sales method that the sales channel 2 is newly incorporated into the sales channel 1. In the parallel sales method, a manufacturer incurs returns processing costs and fixed system operational costs for both the sales channels. For an appropriate selection ratio to the sales channel 2, the additional system operational costs in the parallel sale method could be retrieved, and it could lead to improving the profit to the manufacturer. Utility of the parallel sales method is investigated from each difference of goods return rates and delivery lead-times between both the sales channels by comparing the expected profit of the manufacturer adopting the existing sales method with that adopting the parallel sales method. © Springer-Verlag Berlin Heidelberg 2007.