Sellers Channel Choice and Optimal Pricing on Heterogeneous Online Platforms

This paper sets an analytical model to study the decision problem of a seller facing two heterogeneous online platforms-the for-profit platform and the open platform. Consumers' acceptance of the open platform and the different cost for selling on heterogeneous platforms are considered in the model. Three research questions are discussed: How should the seller choose the platforms to trade on, the for-profit platform, the open platform or the both? If the seller trade on both of the heterogeneous platforms, how should he/she set price on them? How will the consumers' acceptance of the open platform affect the seller's optimal choice? The main finding indicates that seller's optimal channel choice is varying with the consumers' acceptance of the open platform. When the consumers' acceptance rate of the open platform is low, the seller's optimal choice is to selling on the for-profit platform only; When the acceptance rate is in a middle range, selling on both of the heterogeneous platforms is the optimal option; When the acceptance rate is high, the seller's optimal choice is to selling on the open platform only.