Assistant Professor Yiting Deng and Associate Professor Onesun Steve Yoo have published a paper in the INFORMS Service Science Journal.
Assistant Professor Yiting Deng and Associate Professor Onesun Steve Yoo’s co-authored paper “Can Third-Party Sellers Benefit from a Platform’s Entry to the Market?” has been published in the INFORMS Service Science Journal and featured in the UCLA Anderson Review. Alongside their co-authors, UCLA’s Christopher Tang and University of International Business and Economics’ Wei Wang, they explore the intricate dynamics of this partnership and shed light on the multifaceted nature of the debate.
In today’s digital era, e-commerce platforms have revolutionised the way we shop, with Amazon being the dominant player. However, behind the convenience and efficiency of online marketplaces lies a complex and often debated relationship between these platforms and the third-party sellers who rely on them.
Their study suggests that third-party sellers actually performed better than expected when competing with the platform, charging higher prices and increasing their revenues.
Running a platform that hosts other merchants while simultaneously selling competing goods has proven to be a highly successful business model. However, this approach raises concerns about a potential conflict of interest and has remained a complex and ongoing matter for antitrust regulators, with no definitive resolution thus far.
The complex relationship between e-commerce platforms and third-party sellers presents both opportunities and challenges. While platforms provide access to a wide customer base and resources, concerns about control and competition persist. Diversification and thoughtful regulation are key to navigating this landscape successfully, enabling sellers to establish a resilient business model while upholding consumer interests. As the e-commerce industry continues to evolve, an open dialogue and collaborative efforts will be crucial in shaping a fair and thriving ecosystem for all participants involved.
Read the full paper or the UCLA Anderson Review.