Which Online Channel Is Right? Online Auction Channel Choice for Personal Computers in the Presence of Demand Decay
Format of Original
Electronic Commerce Research and Applications
Electronic commerce has become a viable marketing channel for many companies as they take advantage of the ease of electronic markets to move merchandise quickly and inexpensively. Researchers have investigated the use of an e-commerce channel in conjunction with traditional channels, but less research has been dedicated to choosing which e-commerce channel to use. In this study, we examine the choices made by Dell, a computer manufacturer, about whether to utilize their own proprietary auction site to sell computers or to use eBay, a popular and well-established third-party auction site, to move excess merchandise. We ﬁnd that Dell receives a price premium over other vendors of Dell computers, and that DellAuction.com receives a price premium over eBay.com auctions. This price premium is drastically reduced as technology ages and is made obsolete by newer technology-based products. We further ﬁnd that there is little to no price premium for extremely new technology, which is consistent with a contention that the online auction demand is so high for new technology that Dell cannot realize much of a price premium making a more popular third-party channel a more viable option.
Ow, Terence T. and Wood, Charles, "Which Online Channel Is Right? Online Auction Channel Choice for Personal Computers in the Presence of Demand Decay" (2011). Management Faculty Research and Publications. 53.