Agency selling or reselling? Channel selection of green products with consumer environmental awareness

Abstract

Motivated by the growing consumer interest in new energy vehicles, this paper studies a manufacturer's pricing and channel selection issues when selling green products to environmentally conscious consumers. Three channel structures are examined: (1) a single agency selling channel, (2) a single reselling channel, and (3) dual channels of agency selling and reselling. Agency selling refers to the case in which the manufacturer directly sells products to consumers on the platform by paying a fixed fee. Reselling refers to when the manufacturer wholesales products to the platform, which is then responsible for selling to end consumers. We find that an increase in consumers' green awareness has a positive impact on green technology levels, retail prices, and the profits of the manufacturer, platform, and retailer. When consumers' green awareness and the revenue-sharing rate are relatively low, the manufacturer will choose the single reselling channel, which is beneficial for both the manufacturer and retailer. When consumers' green awareness is moderate, the manufacturer will choose the hybrid channel in which the manufacturer and platform will reach a win-win situation. When consumers' green awareness is high, the dual channel is simultaneously beneficial for the manufacturer, platform, and retailer, which reveals that Pareto optimisation occurs.

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