Internet Retailing Intermediation: Multi-Level Analysis of Inventory Liquidity and Fulfillment Guarantees

Abstract

Internet retailers intermediate online markets by setting prices, matching wholesalers' supply with consumers' demand, affording inventory liquidity, and meeting fulfillment guarantees to consumers. Little attention has been given to studying the two latter intermediation functions. To fill this research gap, this study examined a sample of 25 mainstream online retailers in some 704 transactions with consumers. The study evaluates the inventory liquidity and the fulfillment guarantees these Internet retailers provide to consumers. Furthermore, it presents a path-analysis model, which suggests that retailers coordinate their actual and promised inventory-liquidity and delivery performance to satisfy the fulfillment guarantees made to consumers. Moreover, the results show that key transactional attributes (i.e., the net prices and the number of items fulfilled) commonly present in Internet markets and visible to all market participants impact both the levels of inventory liquidity and the delivery performance of the transactions between consumers and Internet retailers.