Influence of customer acceptance of online sales channel on firm profits under channel competition

This paper focuses on the influence of customer acceptance of online sales channel on the profit of firms when the online and the traditional ‘Brick and Mortar’ channels compete. Profit is calculated when the channels are engaged in Bertrand competition and when the channels are integrated. Influence of customer acceptance of online channel on the firm profit is analyzed for different categories of products. Firms enjoy better profits when the channels are integrated for those products for which customer acceptance of online channel is high.