# Manufacturer Channel Encroachment and Evolution in E-Platform Supply Chain: An Agent-Based Model
## 4 Simulation and Results
### The Effect of Commission Rate  
Commissions are a draw on the e-commerce platform for manufacturers who retail on the platform. Manufacturers pay commissions in return for using the online marketplace offered by the e-commerce platform. In Scenario E, we reduce the commission rate from 0.1 to 0.05 (46).  
Figure 12: Prices in A and D of: (**a**) high-quality product in retail channel; (**b**) low-quality product in retail channel; (**c**) high-quality product in direct sales channel; (**d**) low-quality product in direct sales channel. (\(t=100\)).  
Figure 13: (**a**) Sales quantity in A and B; (**b**) consumer utility in A and D. (\(t=100\)).  
**Observation 4**.: _The commission rate has an impact on the number of dual-channel manufacturers (NDM), product sales, and consumer utility._  
Looking at Figure 14, it can be seen that in the benchmark scenario the number of dual-channel manufacturers is clustered in the lower range (3, 4, and 5). However, when the commission rate is reduced, there are many experimental results clustered around five and six dual-channel manufacturers. This indicates a slight increase in manufacturer channel encroachment tendency under scenario E. In terms of price, it is not evident by comparison that the reduction in commission rate has had a significant impact on price as shown in Figure 15. Two-sample \(t\)-tests show the same results in Table 7. There is no significant difference in the four prices between the two scenes according to the statistical results. This is not quite the same as the common perception that when platforms raise commissions, platform retailers generally raise prices [50]. This study, however, finds no significant difference in prices between the two scenarios with different commissions. This result can be explained as follows: this study is not discussing a single-channel model; the manufacturer operates and decides on the prices of both channels. In the scenario where the commission rate is reduced (E), the manufacturer's propensity to encroach becomes higher, meaning that competition between the two channels becomes stronger. For the manufacturer's retail channel, there is no significant change, given the squeeze from the other channel and the impact of lower prices on margins.  
As Figure 16 shows, product sales and consumer utility also increase slightly under scenario E. For manufacturers, the commission is part of the cost, and when commission rates are reduced, manufacturers pay less for the retail channel. The manufacturer's ability to cover the costs of the direct sales channel is then increased from the side and the tendency to encroach on the channel becomes stronger. For consumers, contrary to scenario D, the increase in dual-channel manufacturers means that channel competition has become stronger and consumers can get a better consumer experience from channel competition. As a result, consumers' purchases and utilities increase slightly.  
\begin{table}
\begin{tabular}{c c c} \hline \hline
**Null Hypothesis (\(H_{0}\))** & \(p\)**-Value** & **Result** \\ \hline \(\mu_{A}(RP_{H})=\mu_{E}(RP_{H})\) & 0.395 & Cannot reject \\ \(\mu_{A}(RP_{L})=\mu_{E}(RP_{L})\) & 0.349 & Cannot reject \\ \(\mu_{A}(DP_{H})=\mu_{E}(DP_{H})\) & 0.933 & Cannot reject \\ \(\mu_{A}(DP_{L})=\mu_{E}(DP_{L})\) & 0.332 & Cannot reject \\ \hline \hline \end{tabular}
\end{table}
Table 7: Statistical test results for Scenario A and Scenario E prices.  
Figure 14: NDM in A and E (\(t=100\)).