Pricing and Strategies for Dual Channel Retailers based on Return Policy

Abstract

In order to study whether dual channel retailers should provide return service to customers,and when the dual channel retailers should provide return service,and whether retailers should sign a return agreement with manufacturers by paying additional cost and when retailers would like sign this agreement,this paper builds corresponding profit models for offline and online channels respectively. Based on the profit maximization,the optimal pricing and profit of retailers are solved. The corresponding optimal strategies are proposed based on the probability of customer returning goods from different channels. The research results show that whether retailers sign return agreements with manufacturers has no relationship with market segmentation parameters,however,that will be impact with the return rate. In addition,online channels should provide more detailed product descriptions to reduce the uncertainty of products to reduce the return rate. Offline channels should improve service level to increase market share(i.e.,market segmentation). This study provides significance and scientific insights for the selection of return strategy and pricing decision of distributed dual channel retailers.

Department(s)

Electrical and Computer Engineering

Keywords and Phrases

Dual channel; Optimization; Pricing; Profits; Return strategy

International Standard Serial Number (ISSN)

1005-9830

Document Type

Article - Journal

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2025 Nanjing University of Science and Technology, All rights reserved.

Publication Date

28 Feb 2020

Link to Full Text

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