Compete and Cooperate : Entry Sequence and Logistics Sharing Strategies in Platform Retailing

In recent years, platforms have been increasingly adopting a hybrid mode. A platform serves as a reseller as well as a marketplace, leading to direct competition with third-party sellers. A new trend of logistics sharing has recently emerged in platform retailing: a platform (e.g., Amazon.com) opens its own logistics systems for third-party sellers. This study uses the Stackelberg game to analyze the competition and cooperation between a platform owner and a third-party seller. Additionally, we explore how the interaction of entry sequence choice and logistics sharing strategy affects their pricing decisions and profits. The results reveal that the platform owner can benefit from logistics sharing in most situations, and entry sequence choice can be used as a negotiation method to motivate third-party (3P) sellers to use platform’s logistics service and achieve a win-win situation by mediating the commission rate and platform’s logistics service level. When the logistics sharing option is excluded, both the platform and 3P sellers want to enter the market later if they cannot provide significantly better logistics services than their competitors. In contrast, when sharing logistics services, the platform and 3P sellers hope to enter the market earlier, and the profit gap caused by the entry sequence increases. Additionally, we find that the platform owner can strategically adjust the unit logistics service price to avoid strong competition in certain dimensions