Abstract

Purpose: The purpose of the research is to empirically examine the economic effect of channel structure on retail pricing. The channel structure observed under this study includes exclusive dealing, common retailing, straight buying (wholesale pricing), and consignment. Research design, data, and methodology: The empirical data was collected using secondary data mainly the annual consumer price index spanning a period of 20years i.e., 1995 to 2016. A field observation was undertaken by enquiring from retail outlets to indicate how their stock of products are acquired either through consignment or straight buying. Based on the field observation the data collected were categorized according to the channel forms for further analysis. Results: The analysis of the results revealed that the rates of price increase for consumer products are high for exclusive dealing than common retailing. It was also identified that consignment increases price level more than straight buying. In terms of the combine distribution structure, exclusive dealing, and consignment as one channel form has a higher case of increasing retail prices. Conclusion: Through this research the mechanisms of channel structure on retail price and social welfare are found out. Also, theoretical, and practical contribution as well as future research are strongly suggested.