U.S. patent application number 11/109254 was filed with the patent office on 2005-08-25 for online auction method and system facilitating the sale of multiple product units at prices varying with volume.
Invention is credited to Growney, Kevin, Youssi, Patrick.
Application Number | 20050187859 11/109254 |
Document ID | / |
Family ID | 34860127 |
Filed Date | 2005-08-25 |
United States Patent
Application |
20050187859 |
Kind Code |
A1 |
Growney, Kevin ; et
al. |
August 25, 2005 |
Online auction method and system facilitating the sale of multiple
product units at prices varying with volume
Abstract
An online auction system for auctioning off products includes a
server system, plural buyer systems, and plural seller systems. The
server system comprises a seller interface, a buyer interface, a
price adjustment mechanism, and a bid manager. The seller interface
performs an online bid setup process including obtaining, from a
given seller system, price varying information and quantity
information corresponding to the price varying information. The
buyer interface communicates, to select buyer systems, bid
information and product information, and accepts from a given buyer
system a given quantity needed and a given bid. The price
adjustment mechanism determines a given parity price for the given
buyer, which varies according to the given quantity needed. The bid
manager defines a given winning bid for the given buyer as a
function of the given parity price and a rank of the given buyer in
relation to other buyers.
Inventors: |
Growney, Kevin; (San
Francisco, CA) ; Youssi, Patrick; (San Francisco,
CA) |
Correspondence
Address: |
INNOVATION MANAGEMENT SCIENCES
P. O. BOX 1169
LOS ALTOS
CA
94023-1169
US
|
Family ID: |
34860127 |
Appl. No.: |
11/109254 |
Filed: |
April 18, 2005 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
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11109254 |
Apr 18, 2005 |
|
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09417459 |
Oct 12, 1999 |
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Current U.S.
Class: |
705/37 |
Current CPC
Class: |
G06Q 50/188 20130101;
G06Q 30/0283 20130101; G06Q 40/04 20130101; G06Q 30/08
20130101 |
Class at
Publication: |
705/037 |
International
Class: |
G06F 017/60 |
Claims
What is claimed is:
1. In an online auction system for auctioning off products in
measurable units, the online auction system comprising a server
system, plural buyer systems, and plural seller systems, said
server system comprising: a seller interface for performing an
online bid setup process including obtaining, from a given said
seller system, price varying information and quantity information
corresponding to said price varying information; a buyer interface
communicating to select buyer systems bid information and product
information and accepting, from a given said buyer system, a given
quantity needed, the given quantity needed being an amount of units
of a product a given buyer using said given buyer system desires to
purchase, and accepting a given bid; a unit price adjustment
mechanism for determining a given parity price for said given
buyer, said given parity price varying according to said given
quantity needed; and a bid manager for defining a given winning bid
amount for said given buyer as a function of said given parity
price and a rank of said given buyer in relation to other
buyers.
2. The server system according to claim 1, wherein said products
comprise goods.
3. The server system according to claim 1, wherein said products
comprise services.
4. The server system according to claim 1, wherein said products
comprise computer hardware and software systems.
5. The server system according to claim 1, wherein said products
comprise personal computers.
6. The server system according to claim 1, wherein said bidding
information comprises bidding period information.
7. The server system according to claim 6, wherein said bidding
information comprises an auction start date/time and an auction end
date/time.
8. The server system according to claim 1, wherein said price
adjustment mechanism comprises a unit price adjustment mechanism
for determining a given unit parity price.
9. The server system according to claim 1, wherein said bid manager
comprises a mechanism for quoting as said winning bid amount said
given parity price when said quantity needed is greater than a
current high bid quantity.
10. The server system according to claim 9, wherein said current
high bid quantity comprises the current highest quantity bid at a
parity price for that quantity.
11. The server system according to claim 1, wherein said bid
manager comprises a mechanism for quoting as said winning bid
amount a value equal to said given parity price plus a bid
increment when a sum of said given quantity needed and said current
high bid quantity is greater than a total remaining quantity for
sale.
Description
BACKGROUND OF THE INVENTION
[0001] 1. Reservation of Copyright.
[0002] The disclosure of this patent document contains material
which is subject to copyright protection. The copyright owner has
no objection to the facsimile reproduction by anyone of the patent
document or the patent disclosure, as it appears in the U.S. Patent
and Trademark Office patent files or records, but otherwise
reserves all copyright rights whatsoever.
[0003] 2. Field of the Invention
[0004] The present invention relates to certain types of online
auction systems and methods for providing sellers and buyers a
mechanism for selling and buying, respectively, products (goods or
services) in unit quantities.
[0005] 3. Description of Background Information
[0006] Auctions are used to sell many types of products (goods and
services), including land, commodities, art, food, money, work
contracts, computers and automobile parts, to name just a small
number. The goal of the seller using an auction process is to
obtain the highest value possible in exchange for the good or
service. Thus, goods and services are frequently given to the
highest bidders so as to provide the seller with the most
profit.
[0007] Auctions provide sellers access to large quantities of
buyers, without the seller having to set a fixed (sometimes
arbitrary) price for its goods or services. The auction process can
also save sellers time by avoiding negotiating prices individually
with buyers.
[0008] There are many different types of auction formats. Open
auctions give buyers open access to the current bid price, and
allow the buyers to proffer a counter-bid when they learn about the
most recent highest bid. There are also silent and sealed-bid
auctions. Auctions may also be categorized in terms of whether they
conform to an ascending price scheme, or whether the price slowly
drops until a buyer will come forward and purchase the good or
service.
[0009] Offline auctions may require buyers and sellers to meet at
one or more regionalized or fragmented auction sites. This limits
the ease with which buyers and sellers will be able to meet.
[0010] Some offline auctions are not so region-limited and allow
buyers access to participate in a bidding process through various
communication channels. For example, a publication may be widely
distributed in the form of electronic or printed media, and bidders
may be able to send their bids to a central location, for example,
by facsimile, mail, e-mail or telephone. Such systems, while
centralized, still present certain inefficiencies in making
information available to buyers, and in allowing buyers to send in
their bids to the central auction facility.
[0011] These and other limitations associated with offline auctions
can limit the selection of products auctioned, discourage
participation, and drive transaction costs up.
[0012] In many cases, multiple layers of intermediaries exist
between the original seller and the end-buyer.
[0013] Online auctions address many of these problems associated
with offline auctions. One type of online auction of increasing
popularity is the Internet web-based e-auction. Many types of
e-auction sites exist, such eBay, Amazon and OnSale. Sites such as
these provide centralized trading communities for bringing together
buyers and sellers. These systems allow real-time listing,
browsing, and bidding through one commonly-accessed system. Such
activities may take place from any personal computer having
Internet access anywhere throughout the world. Many sites
specialize in particular types of seller-buyer trading, e.g.,
person-to-person (eBay), business-to-consumer (OnSale), or
business-to-business (VerticalNet).
[0014] Existing e-auction systems have databases which provide both
buyers and sellers access to important information needed to
analyze trading data and set prices. Access to these databases
decreases inefficiencies associated with distributing and obtaining
information and thus encourages trading activity.
[0015] Online auctions employ many well-known auction methods,
including such commonly used business-to-consumer or
business-to-business auction formats as the multi-unit ascending
auction described by Vickrey (1962) and Ortega-Reichert (1968). The
YankeeAuction.TM. of OnSale.com uses a variation on the format
disclosed by these Vickrey and Ortega-Reichert references. The
YankeeAuction model involves a seller auctioning a quantity of
identical units. Bidders select the number of units they need and
the unit price they are willing to pay. Progressive bidding occurs
for a specified period. At the close of the auction, the highest
bid prices win at the respective bid quantities. Bids are ranked by
unit price, then quantity, and then bid date. Accordingly, with the
Yankee Auction, the highest bid wins. In case of ties, larger
quantities win. For when the quantity is identical, earlier bids
will take precedence.
[0016] There are many types of products that sellers would prefer
to sell in larger quantities. Thus, the sellers may give a
substantial discount to the buyer purchasing a larger volume. This
is particularly the case with the used computer market. Every year,
global computer dealers sell billions of dollars worth of used
computer systems and hardware. FIG. 1 shows a typical supply chain
for used computers. The majority of this equipment originates with
computer manufacturers 32 (e.g., IBM, Dell, Compaq, Apple, Sun, and
Cisco). These computer manufacturers 32 obtain the used computers
from their previous owners 30 as lease returns and as trade-ins for
upgrades. The computer manufacturers 32 are faced with the
logistical challenge and associated cost of warehousing this
saleable stock. Accordingly, the manufacturers 32 auction the stock
to resellers, comprising wholesalers 34 and dealers 36. Dealers 36
then market the computers to end-users 38.
[0017] Manufactures typically sell their used PCs in enormous
fixed-size lots of 1,000-10,000 units, that only a handful of
resellers can afford to purchase. The resellers then resell the
items in smaller quantities, charging higher prices per unit.
[0018] There is a need for a centralized auction system or method
which will minimize the transaction costs incurred by the seller
and the buyer. The seller will preferably be able to quickly sell
large quantities of products directly to buyers of all types while
maximizing the total revenues generated from the sales.
[0019] 4. Definition of Terms
[0020] The following term definitions are provided to help the
reader in understanding the terms used herein.
[0021] Bid Increment: the incremental amount of money by which a
buyer must increase a bid over a competing bid in order to win the
bid.
[0022] Maximum Parity Unit Price: This is a parity unit price which
corresponds to the smallest allowable sublot quantity set by the
seller.
[0023] Minimum Sublot Quantity: this is the smallest sublot size
which a buyer can purchase.
[0024] Parity Unit Price: a price falling on the parity unity price
curve, which represents the unit price needed to win a given bid as
a function of quantity in accordance with a pricing model set by
the seller.
[0025] Reserve Unit Price (Current Reserve Price): unit price if a
buyer purchases the total lot quantity.
[0026] Sublot: a portion of a lot.
[0027] Total Lot Quantity: the total quantity of units comprising a
given lot to be auctioned off by a seller.
[0028] Unit: a measure of goods or services being sold through the
online auction. An example of a unit is one computer, an hour of
professional services, or a dozen golf balls.
[0029] Unit Bid Price: the amount of money a buyer bids per
unit.
SUMMARY OF THE INVENTION
[0030] The present invention is provided to improve upon systems
for online auctioning of goods or services. In order to achieve
this end, one or more aspects of the present invention may be
followed in order to bring about one or more specific objects and
advantages, such as those noted below.
[0031] An object of the present invention is to allow sellers to
sell goods or services in given lot quantities, by breaking up the
lot into sublots, while charging a higher unit price for smaller
sublots. An object of the present invention is to provide a
mechanism by which the sellers can control the manner in which
buyers are encouraged to purchase the units in higher volumes, by,
e.g., controlling the extent to which higher volumes are
discounted.
[0032] A further object of the present invention is to provide a
mechanism for allowing sellers to set up the parameters of a bid in
a simple, time-efficient manner. A further object is to provide a
bid/auction mechanism which minimizes the transaction cost incurred
by the seller while maximizing the income received by the seller as
well as the sales volume (allowing the seller to control costs
related to warehousing and stocking products yet to be sold).
[0033] The present invention, therefore, may be directed to a
method or system, or one or more parts thereof, for facilitating
the online interaction between product sellers and buyers. Such a
method or system may involve the auctioning of goods or services,
such as personal computers, through an online mechanism, such as an
Internet website.
[0034] In accordance with one aspect of the present invention, an
online auction system is provided which comprises a server system,
plural buyer systems, and plural seller systems. The server system
comprises a seller interface, a buyer interface, a price adjustment
mechanism, and a bid manager. The seller interface performs an
online bid setup process including obtaining, from a given seller
system, price varying information and quantity information
corresponding to the price varying information. A buyer interface
communicates, to select buyer systems, bid information and product
information, and accepts from a given buyer system a given quantity
needed, which a given buyer using the given buyer system desires to
purchase. It also accepts a given bid from the given buyer system.
The product information may comprise the quantity (in units) of
goods or services. By way of example, the goods may comprise
computer hardware/software systems, such as personal computers with
pre-loaded software.
[0035] The bid information may comprise bidding period information,
such as auction start date/time and auction end date/time. The
given bid is the amount the buyer is willing to pay for the given
quantity needed.
[0036] The price adjustment mechanism determines a given parity
price for the given buyer which varies according to the given
quantity needed. The parity price may comprise a unit parity price.
A bid manager defines a given winning bid amount for the given
buyer as a function of the given parity price and a rank of the
given buyer in relation to other buyers.
[0037] The bid manager may comprise a mechanism for quoting as the
winning bid amount the given parity price when the given quantity
needed is greater than a current high bid quantity. The current
high bid quantity may comprise the current highest quantity bid at
a parity price for that quantity. The bid manager may further
comprise a mechanism for quoting as the winning bid amount a value
equal to the given parity price plus a bid increment when a sum of
the given quantity needed and the current high bid quantity is
greater than the total remaining quantity for sale.
BRIEF DESCRIPTION OF THE DRAWINGS
[0038] The above and other objects, features, and advantages of the
present invention are further described in the detailed description
which follows, with reference to the drawings by way of
non-limiting exemplary embodiments of the invention, wherein like
reference numerals represent similar parts of the present invention
throughout the several views and wherein:
[0039] FIG. 1 is a background art depiction of a typical supply
chain;
[0040] FIG. 2 is a system diagram of one embodiment of an online
bidding system;
[0041] FIG. 3 depicts a first embodiment of a seller screen;
[0042] FIG. 4 depicts a second embodiment of a seller screen;
[0043] FIG. 5 depicts a third embodiment of a seller screen;
[0044] FIG. 6 is a graph of unit price versus quantity, where the
unit price varies linearly with quantity;
[0045] FIG. 7 is a graph of unit price versus quantity, where the
quantity-unit price curve varies depending upon the price model
specified by the seller;
[0046] FIG. 8 is a graph of unit price versus quantity,
illustrating a given curve which moves to increase the unit price
in accordance with progressive bidding;
[0047] FIG. 9 illustrates an embodiment of a buyer screen;
[0048] FIG. 10 depicts a flowchart of a seller interface process in
accordance with the illustrated embodiment;
[0049] FIGS. 11A-11C depict a flowchart of a buyer interface
process in accordance with the illustrated embodiment; and
[0050] FIG. 12 depicts a flowchart of a process for defining the
price to win a bid on a given needed quantity.
DETAILED DESCRIPTION
[0051] Referring now to the drawings in greater detail, FIG. 2
depicts an online bidding system 10 in accordance with one
illustrated embodiment of the present invention. The illustrated
online bidding system 10 comprises a server system platform 12
coupled to a database 11. Server system platform 12 comprises a
unit price adjustment mechanism 20, a bid manager 22, a seller
interface 14, a memory 18, and a buyer interface 16. Unit price
adjustment mechanism 20 is coupled to bid manager 22. Each of bid
manager 22, seller interface 14, and buyer interface 16 is coupled
to bid manager 22. Memory 18 is coupled to database 11. Buyer
interface 16 is coupled an internetwork 24, which, in the
illustrated embodiment, comprises one or a combination of the
Internet, a LAN (Local Area Network), and a WAN (World Area
Network). Through internetwork 24, buyer interface 16 is coupled to
a plurality of buyer systems 28. Seller interface 14 is coupled to
internetwork 24, and through internetwork 24, it is coupled to a
plurality of seller systems 26. In the illustrated embodiment, each
of buyer systems 28 and seller systems 26 comprises a web client,
while each of buyer interface 16 and seller interface 14 comprises,
among other elements, a web server component which is compatible
with the web clients. For example, the technology that is utilized
may be consistent with Internet Explorer or NetScape web
technology.
[0052] Bid manager 22 manages the overall bidding process, and
coordinates the operation of seller interface 14, buyer interface
16, and unit price adjustment mechanism 20. Seller interface 14
comprises a process which handles the interaction between server
system platform 12 and seller systems 26. Buyer interface 16
handles the interaction between server system platform 12 and buyer
systems 28. Unit price adjustment mechanism 20 performs
calculations to determine a unit price used to determine a price
required to win a bid for a given bid quantity.
[0053] Server system platform 12 may comprise one or a plurality of
computers, and each of the components forming part of server system
platform 12, i.e., bid manager 22, unit price adjustment mechanism
20, seller interface 14, memory 18, and buyer interface 16 (and
others not specifically shown--e.g., operating system components,
applications, or other software that may also be running on the
platform), may comprise processes operating within an operating
system on the platform. The operating system may be a single
operating system or distributed operating system.
[0054] Each of buyer systems 28 and seller systems 26 may comprise,
for example, individual personal computers coupled to internetwork
24 via a dial up connection, through an internet service provider,
or through a LAN or WAN connection to the Internet. In the
illustrated embodiment, buyer systems 28 and seller systems 26
comprise web browsers, which communicate with server system
platform 12.
[0055] Seller interface 14 performs an online bid setup process
which includes obtaining, from a given seller system 26, price
varying information and quantity information corresponding to the
price varying information. Buyer interface 16 communicates to
select buyer systems 28 bid information and product information.
The product information may comprise information describing goods
or services. In the embodiment specifically illustrated herein, the
product is goods, which comprise second-hand/previously owned
personal computer systems. The bid information comprises bidding
period information, specifically including an auction start
date/time and an auction end date/time in the embodiment provided
herein. The buyer interface also accepts from the given buyer
system 28 a given quantity needed, which a given buyer using the
given buyer system desires to purchase, and a given bid. The given
bid is the amount the buyer is willing to pay for the given
quantity needed. If this bid is sufficiently high to be a winning
bid, the transaction will take place, either obligating the buyer
to purchase the product (and the seller to sell the product) for
the specified terms, or, depending upon the implementation,
actually effecting an electronic payment for the product and
setting in place a product delivery process.
[0056] Unit price adjustment mechanism 20 determines a given unit
parity price for the given buyer, which unit parity price varies
according to the given quantity needed by the given buyer. Bid
manager 22 defines a given winning bid amount for the given buyer
as a function of the given unit parity price and a rank of the
given buyer in relation to other buyers.
[0057] FIGS. 3, 4, and 5 depict, respectively, first, second, and
third embodiments of seller screens which may be displayed on a
given seller system 26 per operation of seller interface 14.
Referring to FIG. 3, a seller screen 40a is shown, comprising a
column of legends 42a, with corresponding records next to each
respective legend.
[0058] Specifically, a set of unit description records 44a is
provided which describes a unit of a given product. In this
embodiment, certain characteristics of a type of personal computer
being sold are described in various records 44a. The products being
sold may be identical. That is, each unit may comprise a product
which has certain identical characteristics to all other units
within the lot. Alternatively, a given unit may be considered a
unit because it meets certain requirements. Minor variations may
not preclude a product from being considered a unit from the same
lot, so long as they meet the describing characteristics set forth
in the unit description section of the seller screen.
[0059] Bid parameters 46a are also set forth in first seller screen
40a. They comprise a total lot quantity 40a, a reserve price 50, a
reserve unit price 52, a bid increment 54, a minimum sublot
quantity 56, a splitting factor 58, a pricing model value k 60, an
auction start date/time 62, and an auction close date/time 64.
[0060] The embodiment shown in FIG. 3 corresponds to a seller
interface process by which a seller can apply a pre-defined unit
cost increase to the current price of a particular sublot quantity
in a multi-unit ascending auction. This embodiment enables a seller
to specify his or her willingness to split an auction lot, and to
identify the added transaction cost associated with such a split.
These costs are then passed along to the buyer in the form of a
unit cost increase as compared with the unit cost of purchasing the
entire lot.
[0061] The seller interface may be provided with a mechanism (not
specifically shown) for allowing the seller to register prior to
being cleared to trade using the e-auction site. Registration may
involve inputting a standard set of personal and business
information through an online form (not shown). Such data may be
maintained in a system database 11 as shown in FIG. 2, and used, as
necessary, for such things as security, billing, and marketing
purposes. Once a user/seller is registered, he or she may act as a
seller and list items for auction. In order to do so, a mechanism
may be provided which requires the seller to specify auction
parameters by filling out an online form such as that shown in FIG.
3. Unit description information 44a is input, and bid parameters
46a are input as well by the seller. Total lot quantity 48 will
comprise a value representing the total quantity of product for
sale. In this case, 100 computers are being offered for sale by the
seller. Reserve price 50 comprises a value representing the minimum
(opening) bid for the purchase of the entire lot. In this example,
the purchase price for the entire lot is $10,000. The reserve unit
price 52 corresponds to a calculated value which is not directly
input by the user. This value is calculated by dividing the reserve
price by the total lot quantity. In this case, this value is equal
to $100. The bid increment 54 is input by the seller, and
represents the minimum by which a successive bid must top a current
high bid.
[0062] A minimum sublot quantity 56 is input by the seller, and
specifies the minimum sublot quantity that can be purchased by a
given buyer. A splitting factor, which is 50 in the example, is
specified by the seller which determines the unit price increase
that is applied to split lots to offset added transaction costs.
More information will be provided below regarding the significance
of the splitting factor and how it may be used in the bidding
process. A pricing model parameter (k) 60 is also specified. In
addition, the seller will indicate parameters defining the bidding
period in the illustrated embodiment. Those parameters comprise an
auction start date/time 62 and an auction close date/time 64.
[0063] The splitting factor is a seller-defined parameter used with
a pricing algorithm to quantify the unit cost increase to be
applied to split lots. For example, FIG. 3 illustrates a first
embodiment seller screen in which a seller has determined that the
price of splitting a lot into sublot quantities and selling in such
sublots (rather than selling the whole lot) is $50.00 per split.
This factor is easily converted to a maximum parity unit price (P).
The maximum parity unit price is the parity unit price for the
purchase of the minimum sublot quantity. It is by definition higher
than the reserve unit price, which is the price that is paid for
buying the complete lot. Both of these values may be utilized to
calculate a parity unit price curve in accordance with a given
algorithm. Various embodiments are depicted below for implementing
such an algorithm. Such calculations are performed, in the
illustrated embodiment, by the unit price adjustment mechanism 20
of the online bidding system 10 showing FIG. 2.
[0064] FIG. 4 shows a second embodiment of a seller screen, where
the seller does not need to specify the splitting factor. Rather,
the seller identifies the minimum unit price for both the total
quantity and the minimum sublot quantity. The illustrated second
seller screen 40b comprises, as was the case with the screen
showing FIG. 3, a column of legends 42b, and corresponding records,
including unit description records 44b and bid parameters 46b.
[0065] In the embodiment shown in FIG. 4, the seller does not need
to specify the splitting factor or pricing algorithm used to
determine the sublot unit price. Rather, the seller specifies the
reserve unit price to start the bidding for each available sublot
quantity. As with the preceding approach, the reserve unit price
will increase as the sublot quantity decreases. This method allows
a seller to run several simultaneous independent auctions for
different sublot quantities. The specified reserve unit price must
be bid for a sublot quantity in order to open the bidding for that
quantity.
[0066] FIG. 5 shows a third embodiment of a seller screen 40c,
which comprises a column of legends 42c, with corresponding unit
description information 44c and bid parameters 46c. This embodiment
utilizes a larger selection of bid parameters 46c.
[0067] FIG. 5 requires that additional information be provided by
the seller as compared with the embodiments illustrated in FIGS. 3
and 4. That information includes such information as the total lot
quantity, reserve price, reserve unit price, bid increment, the
minimum sublot quantity, and the maximum parity price corresponding
to the minimum sublot quantity. In addition, the seller may input a
plurality of sublot quantity sizes and corresponding reserve unit
prices. In the embodiment illustrated in FIG. 5, up to 3 sublot
quantities may be input in addition to the minimum sublot quantity.
In addition, the seller can indicate the bidding period by
specifying an auction start date/time and auction close
date/time.
[0068] The bid manager 22 will compare different bids for different
sublot quantities in order to rank the bids and to determine the
winner. Utilizing the database 11, bid manager 22 will compare high
bids for each sublot quantity versus the reserve unit price
specified for that quantity. For instance, if buyer no. 1 offers to
purchase the entire lot of 100 units for the initial reserve unit
price of $100.00, while buyer no. 2 offers to by 25 units at
$150.00 per unit (120% of the initial reserve unit price), then the
buyer no. 2 will win the bid. In order for buyer no. 1 to counter
the bid of buyer no. 2, he or she must bid an equivalent 120% of
the reserve unit price for that particular quantity (100 units),
i.e., $120.00 per unit. If buyer no. 1 achieves price parity (120%)
with buyer no. 2, buyer no. 1 would win the bid since bids-are
ranked by price, then quantity, and then date.
[0069] The unit parity price curve may be defined in any manner so
as to allow the varying of the price as a function of the quantity
purchased by the buyer. FIG. 6 provides one example of a parity
unit price curve depicting the manner in which the parity unit
price will vary in relation to the quantity needed by the buyer. In
FIG. 6, the parity unit price varies linearly with respect to the
quantity. Specifically, the parity unit price can be as low as the
reserve unit price dP, which is the price for purchasing the entire
lot quantity Q, to as high as the maximum parity unit price P which
is the price for purchasing the minimum sublot quantity sQ.
[0070] The unit price adjustment mechanism 20 may be implemented to
determine whether a given sublot quantity dictates a particular
parity unit price in accordance with the curve shown in FIG. 6.
Various values defining the curve shown in FIG. 6 may be specified
by the seller or may be calculated using a particular equation
which receives certain parameters, dictated by the seller (through
a seller screen) or set as default parameters. In this embodiment,
the total lot quantity Q, the minimum sublot quantity sQ, and the
reserve unit price dP are all determined directly by the seller.
The maximum parity unit price P is determined by a calculation
involving the splitting factor chosen by the seller. The maximum
parity unit price P is determined using the following equation: 1 P
= d P + f ( Q - s Q Q s Q )
[0071] The value f represents the splitting factor.
[0072] This calculation is required for the seller interface
depicted in FIG. 3. In FIG. 4, the seller may directly specify the
maximum parity unit price P. In any event, a linear pricing model
may be utilized based upon the reserve unit price, the maximum
parity unit price, the total quantity, and minimum sublot quantity,
where the unit price increases at a constant rate as the sublot
quantity decreases.
[0073] Given the two endpoints of the linear pricing model (dP,Q)
(P,sQ), an infinite number of polynomial curves can also be created
that pass through these points. The family of polynomial curves
passing through the two points, in the embodiments illustrated
herein, may be determined using the following equation, solved for
the bid unit price (p) given a sublot quantity (q): 2 p = ( P - d P
) ( 1 - ( q - s Q Q - s Q ) ) k + d P
[0074] In this equation, k is a factor associated with the
specified pricing model which may be selected by the seller, as
shown in FIG. 7. According to this equation, if k=1, the curve
generated is the original straight line with a constant unit price
increase versus quantity. However, if k is greater than 1, the
equation generates a polynomial curve that dips below the line.
This pricing equation may be chosen by a seller who is willing to
split the lot to a particular size for a modest increase over the
reserve unit price. On the other hand, if the value of k is between
0 and 1, the equation generates a polynomial curve that rises above
the line. This curve may be chosen by a seller who, although
willing to split the lot, requires a more significant price
increase paid by the buyer for sublot quantities.
[0075] In another embodiment, the pricing curve between the two
points (sQ, P) and (Q, dP can be determined by a combined
exponential equation of the form: 3 p = P - k ( q - s Q ) + e log (
d P + 1 - P k ( Q - s Q ) ) Q - s Q ( q - s Q ) - 1
[0076] where k is a factor associated with the specific pricing
model selected by the seller. Note that this equation yields the
same result as the polynomial equation, but uses exponential
nomenclature instead.
[0077] In yet another embodiment, the pricing curve can be
calculated according to a generalized Leontiev equation of the
form: 4 p ( q - s Q ) = [ K - K ( 1 - dP P ) - d ( Q - sQ ) dP q -
s Q ( q - s Q ) - K P p ] 2
[0078] where K and d are pricing factors associated with the
specific pricing model selected by the seller. And the unit price
(p) associated with a sublot quantity (q) can be determined by
using the quadratic equation of the form: 5 p = - b b 2 - 4 a c 2 a
given the fac t that , ap 2 + bp + c = 0
[0079] Note that the generalized Leontiev equation yields the same
result as the polynomial equation and combined exponential
equation, but uses a complex quadratic nomenclature instead.
[0080] FIG. 8 illustrates a plurality of parity unit price curves
in order to illustrate a process of progressive bidding and the
manner in which the bidding manager can rank bids by price, then
quantity, and then by bid time. The bidding manager will assume
that there is parity between bids for different quantities that
fall on the same parity unit price curve. Thus, all bids which
reside along the pricing curve are treated as equivalent for price
(i.e., bid 1a and 2a), and will be won or lost based upon higher
quantity (i.e., bid 2a wins). For the buyer of a smaller sublot
quantity to make a winning bid, he or she must bid off the curve to
the right or at a higher unit price (i.e., bid 1b now wins over
2a). The effect of doing this is to progressively move the entire
parity unit price curve to the right as the bidding progresses.
Thus, while the shape of the parity unit price curve does not
change, the bid unit price for all quantities increases as the
auction progresses.
[0081] FIG. 9 illustrates one example embodiment of a buyer screen
80. A column of legends 82 is provided, and records are provided to
the right of the corresponding legends, including unit description
information records 84 and bid information records 86. The bid
information records 86 comprise a quantity needed value 88, a
minimum unit price value 90, a minimum bid price 92, a bid amount
94, and auction start and auction close values 96 and 98. The
quantity needed value 88, in the illustrated example, comprises 50
units. The minimum unit price for this quantity is $105, and the
minimum bid price for this total quantity is $5,250. The minimum
unit price value of $105 represents the minimum unit price needed
to win the bid. The actual amount that is bid by the buyer may be
input in the space for the bid amount 94.
[0082] Once an auction has been launched by a seller, it will be
visible to potential buyers browsing the auction cite. Through the
buyer interface, a summary, or detailed listing, of the auction
parameters may be presented, for example, in tabular form. FIG. 9
is one example of a buyer screen which can be reached once the
buyer chooses a particular auction. With that screen, the buyer
needs only to identify the quantity needed. Based upon seller's
specifications, the remaining values of the minimum unit price and
minimum bid price may be computed. The price that is provided as
the minimum unit price is the minimum price that must be bid in
order to win the bid, and that value is calculated by bid manager
22 taking into account unit parity price information from unit
price adjustment mechanism 20, as described previously herein.
Accordingly, the winning minimum bid price may be calculated from a
pricing curve selected by the seller for that auction. Thus, e.g.,
if a buyer wishes to buy only 5 units, he or she may be quoted a
reserve unit price of $105 rather than $100 per unit for which he
could pay to purchase all 100 units.
[0083] FIG. 10 illustrates a general process performed by seller
interface 14. In a first act A2, the seller screen is displayed. In
a next act A4, input parameters are accepted by the seller
interface. That is, certain input parameters may be input by a
seller using a seller system 26. They are received by seller
interface 14, accepted, and stored within memory 18 and then stored
within database 11.
[0084] In a next act A6, a confirmation display is provided to the
seller via seller system 26. Accordingly, if, for example, the
first seller screen 40a shown in FIG. 3 is presented to a seller,
it will be displayed at act A2. The seller can input various
parameters at the bid parameters 46a record location on the screen.
That is, the seller can input the total lot quantity, which is 100
in the screen shown in FIG. 3. The reserve price $10,000 can be
input. The seller interface may then calculate, from the first two
values, the reserve unit price of $100. The seller can input the
bid increment of $100 at the bid increment location 54. The minimum
sublot quantity, splitting factor, and pricing model are also input
by the seller. In addition, the seller inputs values for the
auction start and auction close date/times. A confirmation is then
provided at act A6 of the fact that all of these values have been
accepted by the system.
[0085] FIGS. 11A-11C comprise a flowchart illustrating the general
process performed by a buyer interface, such as buyer interface 16
shown in FIG. 2. In a first act A10, a determination is made as to
whether the buyer is interacting with the system during a present
bidding period. If the buyer is not within the present bidding,
which is defined by the auction start and auction close date/times
in the illustrated embodiment, the process will proceed to act A12,
at which point in time the buyer will be notified through buyer
system 28 that bidding is not available for that particular
auction. If the buyer is trying to interact during an existing and
valid bidding period as determined at act A10, the process will
proceed to act A14. In act A14, the buyer screen will be displayed.
At act A16, the needed quantity, input by the buyer through buyer
system 28, will be accepted by buyer interface 16 and stored within
database 11. In a next act A18, a determination is made as to
whether the input quantity needed is acceptable. In other words, a
determination is made as to whether the quantity needed is greater
than or equal to the minimum sublot quantity specified by the
seller. If the quantity is not acceptable, a display is provided to
the buyer at act A20 indicating that the lot size is not large
enough. The process will proceed from act A18 to act A22, where the
buyer interface will trigger the determination of the minimum unit
price needed to win the bid, and that minimum unit price value will
be displayed. At act A24, the buyer will prompted to input a bid
amount, and the buyer interface will accept and store that value in
database 11. A determination is then made at act A26 as to whether
the bid amount is equal to or larger than the minimum amount to win
the bid, as was determined at act A22. If not, the process will
return to act A24 and prompt the buyer to input a new bid amount.
If the buyer does input a bid amount within a winning range, as
determined at act A26, the process will proceed to act A28, where
the buyer-seller transaction will take place, for example, using
point of sale and online account debting techniques.
[0086] FIG. 12 provides a flowchart of the process which may be
performed by bid manager 22 in order to determine the minimum bid
price needed to win a bid. At an initial act A50, a determination
is made as to whether the quantity needed, which is input by the
buyer, is greater than the current high bid quantity, i.e., the
current highest quantity bid at a parity price for that quantity.
If the determination results in a yes, the process proceeds to act
A52, where buyer interface 16 will input as the minimum unit price
the high bid parity price for that quantity needed. If the quantity
needed value is determined not to be higher than the current high
bid quantity at act A50, the process proceeds to act A54. At act
A54, a determination is made as to whether the sum of the quantity
needed and the high bid quantity is greater than the remaining
quantity for sale. If this relationship holds true, the process
proceeds to act A56, where the minimum unit price that will be
displayed is the sum of the high bid parity price and the bid
increment for the quantity needed. If the relationship checked at
act A54 is determined not to be true, the process will proceed to
act A58, at which the high bid parity price will be quoted for the
quantity needed.
[0087] While the invention has been described by way of example
embodiments, it is understood that the words which have been used
herein are words of description, rather than words of limitation.
Changes may be made, within the purview of the appended claims,
without departing from the scope and spirit of the invention in its
broader aspects. Although the invention has been described herein
with reference to particular structures, materials, and
embodiments, it understood that the invention is not limited to the
particulars disclosed. The invention extends to all equivalent
structures, mechanisms, acts, and uses, such as are within the
scope of the appended claims.
* * * * *