Optimal contract design for live streaming shopping in a manufacturer–retailer–streamer supply chain

Abstract

This study considers a manufacturer–retailer–streamer supply chain, in which the retailer first purchases products from a manufacturer and then sells them to consumers through a streamer. In the live streaming context, the retailer usually cooperates with the streamer by providing three different contracts: only a commission of the sale (OC), only a fixed fee (OF), and a commission of the sale and fixed fee (CF). Therefore, this study develops a theoretical model to investigate the effects of these three contracts on supply chain members’ optimal decisions and profits. The following results were obtained: (1) the retailer prefers an OC contract with a high-ability streamer, and the manufacturer benefits from this contract. Additionally, the manufacturer, retailer, and high-ability streamer can achieve a win–win–win outcome in certain cases. Furthermore, the retailer is willing to sign an OC contract with a low-ability streamer when the fixed fee of the OF contract is high. (2) The retailer prefers to cooperate with a low-ability streamer through an OF contract when the fixed fee is low. (3) The CF contract is the most profitable alternative for the retailer when the total commission rate is low and the fixed fee is medium.

Impact of Corporate Social Responsibility on Operations of a Live-Streaming Supply Chain

“…Xu et al [23] studied the manufacturer's sales modes of products directly or indirectly through the platform that provides live-streaming functionality. He et al [24] investigated the optimal contract design for live-streaming shopping by designing three cooperation methods between retailers and live streamers. In addition, some scholars have focused on live-streaming marketing strategies based on the introduction of live-streaming channels [25].…”

“…However, the high pit fees are eroding the profts of enterprises, as they need to pay the pit fees in advance, and it is unknown whether the live streamers can achieve a certain number of sales, which means that the risk is entirely borne by the enterprise. Terefore, to better expand LCs, live streamers should control their pit fees and collaborate with brand owners [24].…”

Live streaming e-commerce supply chain decisions considering dominant streamer under agency selling and reselling formats

“…Fan et al [ 10 ] explored the live commerce spillover effect on manufacture's original channel with Stackelberg game and found that the existence of live commerce spillover effect increases manufacture's profit while it cuts down streamer's. Optimal transaction mechanism between retailer and streamer among only commission fee, only fixed fee and both commission and fixed fee was investigated by He et al [ 15 ]. Wang et al [ 34 ] discussed the distribution contract selection between supplier and platform in the context of live streaming e-commerce and put forward the suggestion on the selection of streamer.…”

“…The information value and entertainment value provided by streamers’ marketing effort have a positive effect on consumers' purchase intention [ 7 , 12 , 23 , 37 ]. We use to denote the marketing effort of the streamer, and the cost of marketing effort satisfies quadratic function which is widely used in previous research [ 15 ]. The demand function is derived from consumer behavior and the utility is positive correlation with marketing effort and negative correlation with product price.…”

Pricing Strategy of Dual-channel Supply Chain with E-commerce Live Broadcast

“…Fan, Wang & Song [8] argued that the live streaming service of streamers affects both the sales of traditional channel manufacturers as well as the return rate when selling products live. He, Chen & Mu [9] looked at three modes for inviting streamers to sell commodities: commission-only, fixed-fee, and a combination of both. The study indicated retailers prefer to work with streamers with high sales capacity in a pure commission mode.…”