Research on the Impact of Retailers' Online Channel on Supply Chain

For a Manufacturer who has online direct sales channel, considering the free-riding behavior of consumers, the question of retailers opening the online sales channel was studied in centralized decision making and manufacturers dominated Stackelberg decentralized decision making. Through the theoretical and numerical analysis, following conclusions were obtained. If retailers open online sales channel, the total profit will decrease in centralized decision making. However, in the condition of decentralized decision making, it is favorable for retailers when offline channel has a small basic market share, but it is also favorable for manufacturers when offline channel has a big basic market share. In summary, retailers should better make the decision of opening the online sales channel or not according to the basic market share attic offline channel.