In the ever-evolving landscape of retail, a new study sheds light on how multi-channel retailers can navigate the financial challenges of selling green products both offline and on third-party platforms. The research, led by Xueping Zhen from the Department of Management Science and Engineering at Shanghai Maritime University, explores the dynamics of credit financing in a green supply chain, comparing bank credit financing (BF) with third-party platform credit financing (TF).
The study, published in the journal “Sustainable Operations and Computers” (which translates to “可持续运营与计算机” in Chinese), delves into the strategies retailers can employ to manage capital constraints while expanding their reach through third-party platforms. Zhen and her team developed a Stackelberg game-theoretic model to analyze the interactions between manufacturers, retailers, and lenders.
So, what does this mean for maritime professionals and the broader retail sector? Well, the findings suggest that third-party platform credit financing (TF) might just be the way to go. “Under the TF strategy, the retail price or the interest rate are lower compared to the BF strategy, while the wholesale price under TF is higher,” Zhen explains. This win-win scenario benefits the manufacturer, the retailer, and the third-party platform, creating a more sustainable and profitable ecosystem.
For maritime sectors, this research highlights the importance of flexible financing options in supporting the growth of green supply chains. As retailers increasingly turn to third-party platforms to boost sales, having access to affordable credit can make a significant difference. The study also underscores the role of revenue sharing rates, showing that they impact wholesale and retail prices differently under BF and TF strategies.
“Our finding shows that the revenue sharing rate has no impact on the manufacturer’s wholesale price decision under TF strategy, whereas under the BF strategy, the wholesale price decreases as the revenue sharing rate increases,” Zhen notes. This nuance is crucial for maritime professionals involved in supply chain financing and logistics, as it underscores the need for tailored financial strategies that align with the unique dynamics of each retail channel.
In essence, the study by Zhen and her team offers valuable insights into the financial strategies that can drive success in multi-channel retailing. By embracing third-party platform credit financing, retailers can not only manage capital constraints more effectively but also contribute to a more sustainable and profitable supply chain. For maritime professionals, this research serves as a reminder of the importance of adaptability and innovation in the face of evolving retail landscapes.