The purpose of this study is to investigate the impact of different e-retailing channel structures, specifically the Reseller Model and the Marketplace Model, on profitability, consumer return behaviour, and environmental sustainability. The study further aims to propose a collaborative Returns Provider Program (RPP) to address the operational and environmental challenges associated with cross-border returns.
The study develops a non-cooperative Stackelberg game-theoretic model to analyze the strategic interactions between manufacturers and e-retailers under alternative retail channel structures. Two baseline models, reseller model and marketplace model, are constructed and then extended to global settings with and without a returns provider program. Closed-form equilibrium solutions are derived to examine how retail prices, profits and carbon emissions respond to changes in return rates, international shipping costs and residual value arrangements.
The results show that channel structure critically shapes profit allocation among manufacturers and e-retailers. Manufacturers benefit more in the reseller setting, whereas marketplace model earns higher retailing profits in the marketplace setting. Return-related risks shift from manufacturers in reseller model to e-retailers in marketplace market. The RPP reduces both the financial and environmental burdens of cross-border returns, particularly when non-defective return rates, global shipping costs and residual values are high. Consequently, the RPP not only optimizes economic performance but also mitigates carbon emissions, aligning with global sustainability goals, particularly SDG 12 (responsible consumption and production) and SDG 13 (climate action).
This study contributes to the literature by extending supply chain research beyond the dyadic perspective, incorporating manufacturers, e-retailers, third-party return providers, and environmental considerations into a multi-stakeholder framework. It is among the first to integrate e-retailing channel choice, cross-border return logistics, and carbon emission considerations within a unified Stackelberg game-theoretic framework, and to formally evaluate a returns provider program as a sustainable retailing solution. It offers actionable insights for optimizing channel strategies and implementing sustainable reverse logistics in global e-retailing.
