Online retail formats and product sales performance: The moderating role of product characteristics

Suppliers and e-retailers are business-to-business partners who are both competitors and collaborators. With the platformization of online retailers, suppliers can either sell their products to the e-retailer (i.e., reselling) or directly sell to customers on the platform (i.e., agency selling). Yet, few empirical studies provide insights into which online retail format (agency or reselling) is associated with better product sales performance. Additionally, which product characteristics leverage the effectiveness of the retail format? Drawing on the Grossman–Hart–Moore (GHM) framework, the authors suggest that agency selling is associated with lower product sales performance than reselling. They test their hypotheses using data from a leading online platform. Results from a mixed-effect linear model show the negative association between agency selling and product sales performance is weaker for higher-priced, search, and nondurable products, and for products with lower review volume.