AU2244600A - Method and system for bundling items for on-line auctions - Google Patents

Description

51524 DP:MN P/00/011 Regulation 3.2

AUSTRALIA

Patents Act 1990 COMPLETE SPECIFICATION FOR A STANDARD PATENT

ORIGINAL

Name of Applicant: Ewanted.com Corporation Actual Inventor: EMAN GHANMA Address for Service: COLLISON CO., 117 King William Street, Adelaide, S.A. 5000 Invention Title: METHOD AND SYSTEM FOR BUNDLING ITEMS FOR ON-LINE AUCTIONS The following statement is a full description of this invention, including the best method of performing it known to us: 1 METHOD AND SYSTEM FOR BUNDLING ITEMS FOR ON-LINE

AUCTIONS

Field of the Invention The present invention pertains to on-line auctions, and more particularly to reverse auctions where buyers first post offers to buy items and sellers then bid to satisfy the offers.

Background of the Invention Ewanted.com Corp http://www.ewanted.com, imandi Corporation http://www.imandi.com and Respond.cor Inc. http://www.respond.com have •established reverse auctions. A reverse auction is an auction where prospective buyers post offers to buy and then prospective sellers competitively bid to meet the terms of the offer to buy. The seller with the most competitive bid wins, consummating a transaction with the buyer.

Reverse auctions are commonly used to buy and sell collectibles and other hard to find goods. Reverse auctions work well for buying and selling commodities.

Services are identically sold via reverse auctions.

S•One limitation of the standard reverse auction format is that sellers' transaction costs may be undesirably high. It is not always wise for a seller to peruse reverse auction sites, placing multiple bids, to find a single buyer in need of a single low margin item. Appreciate that the sale of a low margin item by a single buyer may not provide a sufficient profit for a seller to make a sincere effort to place a reasonably priced bid. Accordingly, buyers requesting a single low margin item may not always achieve reasonably priced seller bids. Sellers of low priced items often wish to sell in volume to make such transactions economical.

One way to accommodate buyers' low price demands and sellers' wish for volume is to bundle buyers into a group to give buyers more buying power. Acompany Inc. http://www/acompany.com uses a direct sales format that uses a sliding price scale for volume sales. Volume discounts are offered as the number of buyers 2 increases. Grouping buyers results in buyers sharing these volume discounted prices. There is no provision, however, for allowing multiple sellers to directly compete such as occurs in a reverse auction.

While the accompany.com method is effective at facilitating volume, there is still a need to further economize on-line buying. It is believed that even the volumediscounted prices offered by Acompany Inc. may not always be competitive in an ideal market sense because there is typically only single seller for a particular item.

Accordingly, what is desired is a better way to assure buyers of a competitive price and a certain deal for auctioned items. What is also desired is an efficient S:i :transaction format that closely proximate market ideals.

SUMMARY OF THE INVENTION A system and method for auctioning items relies on a web-based server for operating a reverse auction via a network, e.g. the Intemrnet. Buyers and sellers communicate with the server to enable buyers to post offers to buy items and to enable sellers to post bids responsive to the offers to buy.

The present system and method for auctioning items establishes a hybrid reverse auction, including the capability of bundling multiple requests to buy common items.

.:The present system and method also includes the capability of enabling both the buyers and sellers to modify the offers and bids, respectively. Bundling the buyers offers to buy reduces the seller's transaction cost per item by giving the sellers an opportunity to bid once for multiple items. The offer and bid modification capability enables buyer's to actively participate in the reverse auction bidding process after an initial offer to buy is posted. Accordingly both the buyers and sellers simultaneously compete for auctioned items.

Bundling, according to one aspect of the invention, is encouraged by the server.

The server posts an item suggestion to the network to encourage buyers to make common offers to buy the suggested item.

3 Each common offer addresses a common item and includes a price term and a quantity term. The server bundles the common offers for presentation to sellers.

Common items are typically identical, however, there are instances where common items are fungible, and other instances where common items share a common product line, or brand name.

The server establishes a collective period for receipt of the common offers and revises the bundle of common offers each time another common offer is received, or an existing common offer is revised.

Sellers bid against each other to consummate transactions arising from the bundled offers. The server posts the bids to the network. Sellers revise their bids as necessary in accordance with the auction principles set forth herein.

Brief Description of the Drawings Fig. 1 is a diagram of a system in accordance with the present invention.

Fig.2 is a flow diagram of a collective period sequence in accordance with the present invention.

Fig.3 is a flow diagram of a bidding period sequence in accordance with the present invention.

Fig.4 is a flow diagram of a method including the step of posting item suggestions to the network in accordance with the present invention.

DETAILED DESCRIPTION Fig. 1 shows a system for bundling items for reverse auctions generally designated with the reference numeral 10. The system 10 includes a communications network 12, a host server 14, buyers 16 and sellers 18. The communications network 12 is accessible by the buyers 16 and sellers 18. Preferably, the communications network 12 is the Intemet and the buyers 16 and sellers 18 connect to the Intemnet via personal computers.

The host server 14 is a web server that hosts a hybrid reverse auction web site in communication with the communications network. The host server 14 receives 4 offers to buy from buyers 16 and posts those offers to buy on the web site for viewing by sellers 18 and other buyers 16 via the network.

Sellers 18 view the posted offers to buy and communicate bids in response to the posted offers to buy. Preferably, the responsive bids are posted to the web site for buyers 16 to view and for other sellers 18 to view.

The host server 14 initiates a hybrid reverse auction by posting item suggestions for auction. Item suggestions may either originate from a buyer's request, or from an auctioneer. Item suggestions posted on the network induce buyers to post 10 offers to buy the item suggested. The term "item suggestions" is broadly :o construed, being used interchangeably with the term "suggested items" in this paper.

The host server 14 bundles the offers to buy the suggested items and posts the bundled offers to the network, via the reverse auction web site. Posting the oleo bundled offers enables sellers to bid on the bundled offers to buy.

It can be appreciated that the present invention, while designed for the Intemrnet, may be adapted for use in closed networks such as an Intranet or a closed wide :area network. It can also be appreciated that while the use of item suggestions encourages the collection of common offers to buy, there are other methods of collecting common offers to buy. For example, a simple textual search of offers to buy on any given reverse auction site may result in the categorization of common offers to buy.

Preferably, the process of bundling occurs as offers to buy are received by the host server. The server immediately publishes, and revises the published bundled offers to the network. Alternately, posting the bundled offers is delayed until a bundle is fixed for auction. Delaying posting of bundled offers enables an instant auction of the bundle. Such an instant auction occurs in much less time than the three to seven days often used in common on-line auctions.

For the purposes herein the term "buyer(s)" includes prospective buyers and the term "seller(s)" includes prospective sellers. The term "item(s)" includes goods, services, securities, financial instruments, real and other property.

Fig. 2 shows a method 20 of bundling in accordance with the present invention.

The method 20 includes the steps of beginning a collective period 22, receiving offers to buy 24, bundling common offers to buy 26, posting the bundled offers to the network 28 and ending the collective period 30. The collective period includes an ending period.

The method includes the step 31 of determining whether an offer was received during the ending period and the step 32 of extending the collective period duration. The step 32 selectively modifies the collective period duration, i.e.

.o extends the collective period in certain desired circumstances. Preferably, the step 32 only occurs when an offer is received during the end of a collective period i.e.

the ending period. It can be appreciated, however, that extending the collective period 32 may occur under a variety of pre-determined circumstances.

The collective period normally has a predetermined duration established by the server. The server receives offers to buy 24. Some of the offers to buy are :common. The server bundles the common offers to buy 26 and posts the bundled offers to buy 28 to the network. Preferably, the server continually updates the bundled offers, instantly posting additional, or modified, common offers upon receipt. Accordingly, additional and modified common offers are added to the bundle upon receipt until the collective period ends The ending period is fixed at the end of the collective period. Whereas a typical auction may last a week, the ending period may last a few hours.

When an offer to buy is received during the ending period 31, and the offer to buy is meaningful, the collective period is extended. Extending the collective period 32 enables additional buyers to enter the auction, and current buyers to modify their offers to buy. Extending the collective period helps preserve auction fairness by preventing other buyers from "sniping" the reverse auction from expectant 6 buyers. When no meaningful offers are received during the ending period, the collective period ends An offer to buy that would most likely result in consummation of a transaction with a seller is deemed a meaningful offer to buy. Accordingly, typical indicia of a meaningful offer are price and quantity terms that are more desirable to a seller than many of the posted price and quantity terms.

Fig. 3 shows a method 34 for bidding on bundled offers. The method 34 includes the steps of beginning a bidding period 36, receiving bids 38, and posting bids *o 40 to the network.

The host server sets a bidding period, typically along with posting an item o.

suggestion. The bidding period begins upon posting the item suggestion, or upon receipt of a first offer to buy. Typically, the initiation of the bidding period coincides with initiation of the collective period (Fig. 2) and continues for the duration of the collective period. Accordingly, the bidding period shares the ending period described with respect to Fig. 2.

The pre-determined duration of the bidding period is extendable upon occurrence of a triggering event. A triggering event is, for example, the receipt of a low bid during the ending period or a higher offer to buy, or an increase in the quantity term of any offer to buy.

In an altemrnate embodiment of the invention, the bidding and collective periods do not coincide such as may be desired when bundling offers to buy is accomplished prior to bidding.

The method 34 includes the step 42 of determining whether bids are received in the ending period. If so, the step of extending the bidding period 44 occurs.

Preferably, the bidding period is extended only when the step 42 is caused by a meaningful bid. A meaningful bid may be a low bid. Non-meaningful bids do extend the bidding period. An example of a non-meaningful bid is a bid, which would result in consummation of a transaction with a seller. This method of 7 extending the bidding period prevents last minute bidders from "sniping" an auction from an expectant seller. Extending the bidding period preserves auction faimrness and predictability.

Extension of the bidding period automatically extends the collective period to enable additional buyers to make offers to buy, and to enable current buyers to revise offers to buy (Fig. 2).

Offers to buy include a price term, a quantity term and may include a written item description. Each bundled offer has a bundled offer quantity term equal to the sum 10 of all offer quantity terms. The bundled offer typically has a bundled offer price term range that extends between the lowest offer price term and the highest offer S""price term.

Sellers bid on particular bundles. Each bid includes a quantity and price term. Each seller may bid only once, however, a seller may modify his or her bid. Multiple sellers bid on a single bundle. When a single seller has insufficient quantity of items to satisfy the bundle, additional bidding sellers satisfy the remainder of the bundle.

Fig. 4 shows an exemplary method 50 of guiding buyers to post offers to buy :common items. This is accomplished by the step 52 of posting item suggestions *I o. to the network, the step 54 of receiving offers to buy the suggested items, the step 56 of bundling the offers to buy the suggested items, the step 58 of posting the bundled offers to the network, and the step 60 of receiving bids on the bundled offers.

The step 60 includes receiving new bids and/or receiving modified bids. The step 54 includes receiving new offers to buy and/or receiving modified offers to buy.

Both buyers and sellers compete directly during the collective period thus establishing a hybrid reverse auction that enables the buyers also to bid through modifying posted offers to buy. A single seller, or multiple sellers with appropriate bids can win all, or a portion of the bundled bids. Thus, each seller may consummate transactions with all, or a portion of the buyers to satisfy all, or some of 8 the buyers' offers to buy.

The method 50 includes the step 62 of determining if the collective period ends and the step 64 of consummating a transaction. The server continues to receive offers to buy until the collective period ends.

According to one aspect of the invention the step 54 includes receiving offers for identical items. The step 56 of bundling includes bundling the identical items. The step 60 of receiving bids includes receiving bids on the bundled identical items.

While the foregoing detailed description has described various embodiments of **o 10 the invention it is to be understood that the above description is illustrative only and *.uO not limiting of the disclosed invention. Multiple ways of determining when offers to o• buy items are identical may be employed in accordance with the present invention.

S .i Allocating bundle quantities to various sellers may be accomplished in many ways, &Soo the bids first in time may be accepted first, or the lowest priced bids may be 15 accepted first and associated with the highest priced offers to buy. Accordingly, the invention is to be limited only by the appended claims.

S.l.

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Claims (19)

1. A system for bundling items for reverse auctions, comprising: a communications network accessible by buyers and sellers; a host server in communication with the communications network, the host server receives offers to buy identical items; the host server bundles offers to buy identical items; and the host server posts the bundled offers to buy to the network to enable sellers to bid on the bundled offers to buy.

2. A system as set forth in claim 1, wherein the host server sets a collective period for receiving the offers, the collective period having a pre-determined duration.

3. A system as set forth in claim 1, wherein the host server sets a collective period for receiving6Dffers and a bidding period for receiving bids forOi}ffers, the bidding period coincides with the collective period to enable offers to buy and bids to be concurrently received and posted to the network.

4. A system as set forth in claim 3, wherein the bidding period and collective periods share a pre-determined duration and the host server extends the duration for a fixed extension period upon occurrence of a triggering event.

5. A system as set forth in claim 4, wherein the triggering event is the receipt of a bid.

6. A system as set forth in claim 4, wherein the triggering event is the P SEC receipt of an offer to buy.

7. A system for auctioning bundled items, comprising: a communications network accessible by buyers and sellers; a host server in communication with the communications network, host server establishes a collective period for receiving common offers to buy and establishes a bidding period for receiving bids responsive to the common offers to buy; each offer to buy and each bid includes a price and quantity term; and the host server enables modification of the price and quantity terms of each offer to buy and of each bid during at least a portion of the collections period to facilitate an auction where both buyers and sellers actively compete for items.

8. A system as set forth in claim 7, wherein the collective period and bidding period coincide. ago. S9. A system as set forth in claim 8, wherein the collective period and oleo bidding period coincide and the server establishes an ending period so that when a bid or an offer to buy are received during the ending period, the collective period and bidding period extend. A system as set forth in claim 9, wherein the collective period and bidding period extend only upon receipt of a meaningful offer or a meaningful bid.

11. A method for bundling items for reverse auctions, comprising: receiving a first offer to buy a first item; receiving a second offer to buy a second item, the items being common in subject matter so that the first offer and second offer are common offers, the first offer having a first offer price term and a first offer quantity term, the second offer having a second offer price term and a second offer quantity term; 11 bundling the common offers to form a bundled offer, the bundled offer having a bundled offer quantity term equal to the sum of the first offer quantity term and the second offer quantity term, the bundled offer having a bundled offer price term range; and posting the bundled offer to the network to enable sellers to bid on the bundled offer.

12. A method as set forth in claim 11 further comprising the step of: posting suggested items to the network; and wherein, the steps of receiving a first offer and a second offer include selecting one of the suggested items to facilitate the step of bundling the first offer and the second offer.

13. A method as set forth in claim 11 further comprising receiving a first bid i o having a first bid price term and a first bid quantity term, and a second bid having a second bid price term and a second bid quantity term, the first bid quantity term and the second bid quantity term meeting at least a portion of the bundled offer quantity term to allow more than one seller to satisfy the bundled offer.

14. A method as set forth in claim 11, wherein each bid includes a quantity term that meets the quantity term of the bundled offer to allow a single seller to satisfy the bundled offer.

15. A method for bundling items for reverse auctions, comprising: receiving a first offer to buy a first item; receiving a second offer to buy a second item, the items are identical; the first offer having a first offer price term and a first offer quantity term, the second offer having a second offer price term and a second offer quantity term; 12 bundling the first and second offers to form a bundled offer, the bundled offer having a bundled offer quantity term equal to the sum of the first offer quantity term and the second offer quantity term, the bundled offer having a bundled offer price term range; and posting the bundled offer to the network to enable sellers to bid on the bundled offer.

16. A method as set forth in claim 15 further comprising receiving a first bid having a first bid price term and a first bid quantity term, and a second bid having a second bid price term and a second bid quantity term, the first bid quantity term and the second bid quantity term meeting at least a portion of the bundled offer quantity term to allow more than one seller to satisfy the bundled offer.

17. A method as set forth in claim 15, wherein each bid includes a quantity term that meets the quantity term of the bundled offer to allow a single seller to satisfy the bundled offer. *.i

18. A method as set forth in claim 15 further comprising the step of: posting suggested items to the network; and wherein, the steps of receiving a first offer and a second offer include selecting one of the suggested items to facilitate the step of bundling the first offer and the second offer. 13

19. A method as set forth in claim 15 further comprising the step of: modifying at least one offer to buy.

20. A method as set forth in claim 15 further comprising the step of: modifying at least one bid.

21. A system for bundling items for reverse auctions as defined in claim 1 substantially as hereinbefore described with reference to the examples. Dated this 22nd day of March 2000 15 Ewanted.com Corporation By their Patent Attomeys COLLISON CO e•