Abstract: With the popularization of internet technologies,distributors apply not only the traditional marketing channels,such as whole and retail sales,but also use internet online direct marketing channels.However,sometimes there may be conflict with the coexistence of the two kinds of channels in the sense of profit gaining.To solve this problem,study is conducted in this paper for such a supply chain in which product valueadded service is provided by the retailers.A dualchannel model with a valueadded cost parameter is developed.By this model,it can analyze the profit obtained by a manufacturer with complete and incomplete information,respectively.Results show that a manufacturer’s profit increases if the valueadded service cost parameter obtained by the model is shared with the manufacturer.It also shows that when the valueadded cost for the distributors is greater than a threshold,the distributors are willing to share such information with the manufacturer such that more profit can be gained for both parts.

Key words: mixed channel, channel conflict, value-added service, information sharing