Agency, Reselling, or Hybrid: Strategic Channel Selection in a Green Supply Chain

Abstract

This study explores the channel preference of a platform and a green manufacturer in an online market. The platform offers both the agency channel and the reselling channel, while the manufacturer designs a green product to improve the green effort and sells it through the platform. We find that the manufacturer’s channel preference is determined by the interaction of the green investment, the commission rate, and the competition intensity. In contrast, the online platform prefers the hybrid channel when both the commission rate and green investment inefficiency are moderate but prefers the agency channel otherwise. Interestingly, the manufacturer can change its sales center between the reselling channel and the agency channel, thus resulting in a win–win outcome for the manufacturer and the platform by selecting the hybrid channel. This study reveals the benefits of green product selling in an online market and provides useful guidelines for green product manufacturers and platform managers in improving their strategic selling channel.