Who is this research for? This research is relevant for retail executives, e-commerce leaders, and product and brand managers responsible for online channel strategy.
Executive Summary
This research from Valerie Good at the Sam M. Walton College of Business (Department of Marketing) examines how two online retail formats—agency selling and reselling—are associated with product-level sales performance. Under agency selling, suppliers sell directly to customers on a third-party platform while retaining control over pricing, promotion, and inventory. Under reselling, the platform purchases products from suppliers and then controls pricing, promotion, and fulfillment. Using data from more than 5,000 products sold on a major U.S. online platform, the study analyzes how these ownership and control differences relate to sales outcomes.
The findings suggest that agency selling is generally associated with lower sales performance than reselling. However, the negative association with agency selling is weaker for some items, including higher-priced products, frequently purchased nondurable products, and products with fewer customer reviews. These results indicate that online retail format decisions should not be made uniformly at the brand or firm level. Instead, retailers may benefit from aligning sales formats with how customers evaluate, purchase, and repurchase specific products.
Action Items for Industry
- Match format to product economics: Favor reselling for products that benefit from platform-led pricing, promotion, and demand aggregation.
- Use agency selling selectively: Consider agency selling for higher-priced, information-rich, or frequently purchased products where supplier control may add value.
- Revisit portfolio-level assumptions: Avoid assuming one marketplace format fits all products within a brand or category.
- Assess review volume strategically: Products with fewer customer reviews may rely more on supplier-led information and marketing under agency selling.
- Design hybrid retail strategies: Allocate products across agency and reselling formats based on their information needs, pricing, and purchase frequency.
Quote from the Researcher
“Product suppliers must move beyond a one-size-fits-all sales approach by strategically aligning online sales formats (agency selling or reselling) with specific product characteristics, such as price and purchase frequency, to optimize performance across digital channels. Ultimately, the most successful retail strategies will be those that implement a hybrid approach, leveraging the scale of reselling for volume while utilizing the control of agency selling for high-value or information-rich products.”
– Valerie Good
Co-Authors & Affiliations
Hao Wang — Miami University, Farmer School of Business
Joon Ho Lim — Illinois State University, College of Business
Link to the Original Research
Published in Journal of Business Research, available here.
📩 Interested in learning more? If you’d like additional information about this research or to connect directly with the researchers, please email us at research@walton.uark.edu.
