The private label introducing for a B2C platform firm

Private label has become an important strategy for retailers and B2C platform to gain competitive advantages. This paper investigates product introduction and position of B2C platform's private label in a distribution channel composed of one manufacturer and one B2C platform. Results indicate that introducing private label can create a win-win situation for both the B2C platform firm and the national brand manufacturer, and the production cost of private label is an important factor for B2C platform to introduce private label. The analysis suggests the position decisions depend on parameters like product base demand, production costs, and product substitutability. We show that a private label will benefit the manufacturer and the platform under certain conditions. The optimal PL position lies on the segment that manufacturer's profit and platform's profit could increase.