Multi-channel Supply Chain Coordination Based On Revenue Sharing Contracts

E-commerce has become of the most important patterns of consumption. Both manufactures and retailers can open their own online channels to meet diverse demand and gain additional competitive power. But different channels cause cannibalization of consumers and competition of different channels. Due to the difference of objectives for manufactures and retailers, the profit of supply chain is hardly optimized, which is called Double Marginal Effect. This article tries to solve the channel selection problem faced by manufactures and retailers, which throws light upon the contradictions of different channel choices. Another problem this paper aims to is to coordinate of multi-channels supply chain.First, this paper picks up different channel structures and analyses their profits with Stackelberg game respectively. Then we get the preference of the channel structures in the prospective of manufacturer and retailer respectively. Also the channel choice contradiction is clear by making comparison of channel choice preference of manufacturer and retailer. It finds that if the manufacturer selects the dual channel structure, retailer will suffer a profit decrease when the channel cost is small. While if the retailer selects the dual channel structure, manufacturer will gain from this it as well as long as the online channel cost is small. Meanwhile, this article coordinates the supply chain and eliminates the objective difference between manufacturer and retailer by revenue sharing contract. Both manufacturer dual channel, retailer dual channel and mix channels with manufacturer online channel, retailer online channel and traditional channel are concerned. It picks up the corresponding revenue sharing contract and condition that improves the profits of participants of the contract. At last, it approves the efficiency of the revenue contracts for multi-channel supply chain coordination.