Bricks vs. clicks: Which is better for marketing remanufactured products?

• Selling remanufactured products via e-channel (Model M) or third-party (Model 3P).
• There is a larger (smaller) quantity of remanufactured (new) products in Model M.
• More importantly, Model M is always greener than Model 3P.
• Although Model M is greener than Model 3P, firms are reluctant to adopt it.
• The more retailers in the market, the greener Model M relative to Model 3P.

The economical and environmental benefits are the central issues for remanufacturing. Whereas extant remanufacturing research focuses primarily on such issues in remanufacturing technologies, production planning, inventory control and competitive strategies, we provide an alternative yet somewhat complementary approach to consider both issues related to different channels structures for marketing remanufactured products. Specifically, based on observations from current practice, we consider a manufacturer sells new units through an independent retailer but with two options for marketing remanufactured products: (1) marketing through its own e-channel (Model M) or (2) subcontracting the marketing activity to a third party (Model 3P). A central result we obtain is that although Model M is always greener than Model 3P, firms have less incentive to adopt it because both the manufacturer and retailer may be worse off when the manufacturer sells remanufactured products through its own e-channel rather than subcontracting to a third party. Extending both models to cases in which the manufacturer interacts with multiple retailers further reveals that the more retailers in the market, the greener Model M relative to Model 3P.