Collaborative Rebate Strategy of Business-to-Customer Platforms Considering Recycling and Trade-Ins Simultaneously

Abstract

B2C (business to customer) platforms like JD.com and Suning.com often cooperate with professional recycling companies, and implement recycling programs and trade-in programs simultaneously, especially for electronic products. The former means that platforms recycle old products from customers with cash, whereas the latter means that platforms allow customers to trade in old products for new ones. Under this background, we discuss how to develop the optimal rebate strategy for B2C platforms based on the market recovery price of old products, and give the optimal rebate prices and feasible conditions of single-rebate, dual-rebate, and none-rebate strategies. The results show that the single-recycling rebate strategy is dominant when the residual value of old products is low, and when the residual value of old products is high, platforms should choose in turn the single-trade-in rebate strategy, dual-rebate strategy, single-recycling rebate strategy, and non-rebate strategy with the increase in the cost of new products. In order to obtain higher profits, B2C platforms should provide appropriate rebates to better coordinate the recycling program and the trade-in program on the basis of the market recovery price, the residual value, and the durability of old products as well as the cost, the selling price, and the upgrade range of new products.

Trade-in program in online platforms considering network externalities and recycling services

“…Ma et al (2020) analyzed the impacts of the price reference effect and quality reference effect on product price, corporate profit, and consumer surplus within the framework of the trade-in program. Ji et al (2021) investigated the pricing dynamics in both recycling and trade-in models, delving into the impacts of residual value in used products and the cost of purchasing new products with the trade-in program on an e-commerce platform. Yuan et al (2023) examined the impact of strategic consumers and analyzed the effects of the trade-in program on pricing strategy, indicating that a trade-in period should be extended with dynamic pricing strategies.…”

How to promote mobile phone trade-in and the integration of green supply chain from the perspective of multi-party game theory

“…In addition, some studies combine other areas. From the full life cycle of the product, it considers the impact of the deposit system on the profits of manufacturers, and formulates online and offline trade-in strategy models from market segmentation, and formulates the best rebate strategy [27,28]. Combined with the characteristics of online trade-in, another scholar constructed a closedloop supply chain model that provides two different trade-in models of gift certificates and cash coupons [29].…”