Strategic Analysis of the Online Recycler’s Reselling Channel Selection: Agency or Self-Run

Abstract

With the rapid development of the internet, many WEEE (Waste Electrical and Electronic Equipment) online recyclers have emerged and developed. They improve recycling efficiency significantly and bring hope for sustainable development. Unfortunately, few works in the literature are concerned about it, with many questions still unanswered. The WEEE online recyclers always face a challenge with regard to how to strategically design their reselling channel structure in fact. In this paper, we examined this challenge by two decision models: agency and self-run. We derived the performance of the self-run model and agency model by backward induction and then examined the desirability from different stakeholders' perspective. The results suggested that WEEE online recyclers prefer the self-run model to the agency model when the unit recycling cost is low and a conflict exists between the WEEE online recycler and e-retailer for the resale channel preference. Interestingly, the manufacturer shows consistent resale channel preference with the WEEE online recycler when the unit recycling cost is low. Our further analysis revealed that all players can agree on the agency model in a certain case. In addition, we found that the consumer surplus and the recovery ratio in the self-run model are always better than that in the agency model. Our work provides insight into the promotion of the WEEE online recycling industry and into the resale channel selection for online recyclers. The study also generates managerial insights for environmental sustainability.

Marketplace or Hybrid: Vendor’s Information Sharing with e-Retailer

“…Based on the theoretical models, Wei et al [ 16 ] attempted to optimize the online sales formats of e-retailers under the effects of the e-retailers' platform roles, difference in market shares, etc. Guo et al [ 17 ] studied the resales platform structure of online recyclers for waste electrical and electronic equipment (WEEE) and created agency and self-run models to analyse the platform selection of such recyclers. Some scholars extend their research to the competitive strategy between suppliers and retailers.…”

Agency or Self-Run: the effect of consumer green education on recyclers’ distribution channel choice under platform economy

“…Assumption 1 ensures the recycler's cost for recycling used products is higher than the consumer's expected willingness to sell, therefore the recycler will have enough raw material to perform the remanufacturing (Li, Feng, and Luo 2019;Guo, Li, and Nie 2020).…”

“…Relaxing this assumption would complicate the mathematical calculations of our model and deviate from our main research question. Besides, this assumption is an abstraction of reality, and it is widely used in the remanufacturing related literature (Kleber et al 2020;Guo, Li, and Nie 2020).…”

“…Therefore, the sales activities through the Agency channel are a specific exemplar of the platform economy. Alternatively, the recyclers can choose to sell remanufactured products on their own online platforms, which are referred to as the "Self-Run channels" (Guo, Li, and Nie 2020). In practice, the E-retailers who also sell remanufactured products do not provide the Agency channel for the recyclers.…”

“…Unfortunately, previous literature on recyclers' distribution channel selection in the green supply chain usually ignores the influence of the consumer green education (Abbey et al 2015;Chitra 2007;Wang and Hazen 2016). In addition, the traditional view that the recyclers should abandon the Self-Run channel to save the operational costs seems not to be applicable when the consumer's green education is well developed (Guo, Li, and Nie 2020;Song, Li, and Zhuang 2021).…”