Abstract: A study is conducted to analyze the impact of product pricing and inventory information disclosure strategies on the profitability of an online retailer selling two differentiated products. The consumers' purchasing behavior is analyzed, a profit model for online retailers is developed, and the strategies of disclosing and hiding inventory level information for the two differentiated products under three different supply and demand situations are compared. The results show that the disclosing inventory level information is a better choice when the supply of high-quality products exceeds the demand, and hiding inventory level information is a better choice when the supply of low-quality products exceeds the demand. In addition, when combined with the inventory disclosure strategy and the different supply and demand situations of the two differentiated products, the online retailer should choose the strategy for sufficient supply of high quality products, out of stock of low quality products, and hiding inventory level information in order to maximize profits during the sales period.

Key words: inventory information disclosure, differentiation, price