Commission incentives and power structures in live-stream: Exploring dynamic commission rate and wholesale price

The rapid growth of live-stream selling has transformed the retail landscape, yet limited research exists on dynamic commission structures in live-stream commerce. This study addresses this gap by examining optimal strategies within a dual-channel supply chain, where the manufacturer distributes products through traditional online and live-stream channels. By incorporating dynamic commission rate and wholesale price under an incentive mechanism, this research contributes to the understanding of how these structures facilitate collaboration among the manufacturer, streamer, and retailer. Using a multi-period model, we analyze the preferences of the three parties regarding partner selection and commission structures. Comparative analysis reveals that dynamic commission rate benefits the dominant party but can disadvantage the weaker party. Moreover, the manufacturer and retailer, acting as a community of interest, maintain a consistent strategy that enables higher profits. In manufacturer-dominating scenarios, the combined effect of dynamic wholesale price and commission rate enhance profitability for the manufacturer and retailer, but create significant disadvantages for the streamer. In streamer-dominating scenarios, outcomes vary depending on memory parameters that capture the influence of both channels. Furthermore, the dynamic models reveal that three-party cooperation tends to stabilize over period, rather than escalating indefinitely, further supporting the feasibility and sustainability of these strategic approaches. This study provides a novel approach to analyzing dynamic commission structures in live-stream commerce, offering practical insights into optimizing dual-channel supply chains for improved long-term collaboration and profitability.