Abstract
A smooth transition from merchant provider "Supplier" to end user "Buyer" is a science and yet art in retail industry. In vast country like China, a model of Buyer-Supplier relationships is one of the major theories in Marketing Channel. However and unfortunately, only few empirical studies addressed such crucial working partnerships in China's retail industry. In recent years, the retail scene in China is very vibrant, growing and expanding dynamically. The buyers and sellers are increasingly organizing new "arm's length" arrangements in particular through the "Dairishou" system. If this system is set up professionally and efficiently, it will ensure smooth flow from merchandise production, to customer purchase, and this could prove to be very significant in term of profitability of an enterprise. The "Dairishou" is the middle merchant which supposed to perform 2 functions in channel network systems in China. One of the functions is to coordinate and consolidate inventories from manufactures and dealers as the supplier. The second function is to sell the merchandise through the retail space in the department stores and shopping centers as the retailer. The linkage of the 2 functions is the key factor of channel network in China. The primary purpose of this article is to highlight, emphasize our dependency and reciprocal action in distribution channel relationships. Subsequently examines and describes a framework for developing buyer-seller relationships through "Dairishou" in China retail market. When choosing distribution channels, companies need to rely on assigned principles that are aligned with their overall competitive strategies and performance objectives. Shrewd channel members attempt to manage their environment by judiciously selecting exchange partners engineering fitting exchange patterns and roles. (Dwyer and Welsh 1985) The authors use primary data from a national survey of "Dairishou" to analyze and investigate constructing channel network with buyer and supplier. As a result, the Dairishou as middle merchant most likely tend to use joint action with supplier rather than buyer. Perhaps the major implication of our study is that increasing attention must be directed in the future channel issues to promote progress in China.
