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<p>Literature on supplier encroachment primarily considered direct selling via agency or supplier-owned channels. However, dual-channel encroachment simultaneously exists, where agency, supplier-owned, and reselling channels differentially serve consumer preferences. We model a supply chain using price competition demand functions with channel-differentiated pricing. An inverse induction method derives demand functions for single-and dual-channel scenarios. Results indicate: Suppliers may choose owned-channel encroachment despite TPP profit loss, unless facing high fixed costs. If the commission rate of agency products is sufficiently large, the TPP can provide an agency channel for supplier encroachment, and the supplier can choose dual-channel encroachment when consumer shopping preferences show significant differences between the supplier-owned and agency channels. Otherwise, the supplier could abandon agency encroachment to ensure profits from the owned channel. Under single- and dual-channel encroachments, setting direct sales prices first is beneficial for the supplier, after which the TPP can ascertain the reselling price.</p>

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Supplier encroachment through agency and owned channels with consumer shopping preferences

  • 期刊论文

  • 发表日期：

    2026年2月26日

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  • Yanfei Xia,
  • Zongyu Mou,
  • Guitao Zhang,
  • Kaixin Ding,
  • Hao Sun,
  • Zhilin Yang

摘要

Literature on supplier encroachment primarily considered direct selling via agency or supplier-owned channels. However, dual-channel encroachment simultaneously exists, where agency, supplier-owned, and reselling channels differentially serve consumer preferences. We model a supply chain using price competition demand functions with channel-differentiated pricing. An inverse induction method derives demand functions for single-and dual-channel scenarios. Results indicate: Suppliers may choose owned-channel encroachment despite TPP profit loss, unless facing high fixed costs. If the commission rate of agency products is sufficiently large, the TPP can provide an agency channel for supplier encroachment, and the supplier can choose dual-channel encroachment when consumer shopping preferences show significant differences between the supplier-owned and agency channels. Otherwise, the supplier could abandon agency encroachment to ensure profits from the owned channel. Under single- and dual-channel encroachments, setting direct sales prices first is beneficial for the supplier, after which the TPP can ascertain the reselling price.