The impact of online referral services on cooperation modes between brander and platform

The prevalent platform retailing has prompted branders to consider whether to expand their marketplace channel and adopt online referral services to improve performance. In this context, we develop a setting in which a brander sells a product directly by its official website, a manufacturer provides a substitutable product for a platform that additionally provides an online referral service. Then, a stylized model is established to investigate whether a brander should introduce a marketplace channel when a platform provides the online referral service. The results show that the brander always trends to join the platform if the price competition is intense, and the online referral service is an alternative option and improves a limited total demand for the brander. Moreover, the platform can take advantage of the online referral service as a tool to deal with the brander's marketplace channel intrusion. When the price competition is relatively weak and the platform's initial market share is moderate, both the brander and the platform choose Brander-Marketplace-Reseller with Service Mode to achieve a win-win situation; Otherwise, Brander-Marketplace-Reseller without Service Mode achieves a win-win situation. The platform should strategically choose to provide the online referral service for the brander as the platform fee increases.