This study analyzes the status of contract types between large retailers and manufacturing suppliers. It also demonstrates the factors affecting the choice of contract type as well as the economic effect of the contract type on the supplier’s performance.

The study found that direct purchase transactions accounted for 47% of total transactions, with the highest proportion, while contract types differed by product group and by industry, depending on the stability of demand, the importance of professional salesman service, and the degree of inventory risk.

The regression analysis showed how transaction cost and bargaining power affected the selection of contract types. As for transaction cost, the proportion of direct purchases tended to increase as retailer’s distribution system was developed, the more the supplier trusted the retailer, and the lower the level of interior decoration or specialized salesperson required for sales process. Regarding the bargaining power of the supplier, the proportion of direct purchase increases as the number of trading companies increases, and the type of transaction and the decision of margin ratio were based on the supplier's proposal.

Furthermore, the paper found that a supplier’s sales tend to decrease on average as the gap in the bargaining power between the retailer and the supplier increases, and the portion of the special contract purchase increases.

As a policy recommendation, this paper suggests that policy for enhancing supplier bargaining, including customer diversification, should be strengthened and that retailers should double their innovation efforts in the face of rapidly changing retail markets.

Preface
Executive Summary

Chapter 1 Introduction

Chapter 2 Literature Review and Contributions of the Study

Chapter 3 Status of Contract Types Between Retailers and Suppliers
　Section 1 Overview of Analysis Data
　Section 2 Distribution of Transaction Types by Retail Formats
　Section 3 Distribution of Transaction Types by Product Categories

Chapter 4 Factors Influencing the Choice of Contract Types
　Section 1 Survey Overview
　Section 2 Model and Estimation Results

Chapter 5 Impact of Contract Types on Suppliers’ Business Performance

Chapter 6 Patterns of Unfair Trade Practices by Contract Types

Chapter 7 Conclusion and Policy Recommendations
　Section 1 Summary of Findings
　Section 2 Policy Recommendations

References
Appendix
ABSTRACT