CA2845348A1 - Multi-platform electronic auction system - Google Patents

Abstract

The present invention relates to systems, methods and computer readable media for a multiplatform auction, such as vehicle auctions. The daily auction utilizes two rounds of closed bidding and two rounds of offers. Round 1 Active: from the time vehicle is entered until a fixed time on the sale date. Round 1 is then closed for a fixed duration.
Sellers can review bids and adjust reserve price. Round 2 Active - starting at a second fixed time for a second fixed duration, the top 7 bidders can submit higher bids. Round 2 is closed for a fixed duration; sellers can review final bid results and adjust reserve price to sell. The seller delivers the sold vehicle to an Auction Partner location for a post-sale inspection and completion of the sale.

Description

MULTI-PLATFORM ELECTRONIC AUCTION SYSTEM
TECHNICAL FIELD
[001] The present disclosure relates to a multi-platform auction system for asset sales, including vehicles, boats, art and jewelry, and more particularly to systems, and computer implemented methods for same.
BACKGROUND

[002] The multi-billion dollar used vehicle auction market in North America recently accounted for approximately 9 million vehicle transactions. However, vehicle auction volume has not rebounded from recent lows at the pace of the rest of the market. Even though there has been an upsurge of new vehicle sales (the leading indicator of used car sale) and the overall prospects are bright, auction market activity has been impeded by practical limitations of the current auction process.

[003] The vehicle redistribution market is comprised of two segments: 1.) the used wholesale/auction market and; 2.) the used retail market. The wholesale/auction market is where institutions trade vehicles amongst each other. The retail marketplace deals with the end consumer and this includes the private sales between individuals.
The size of the North American used market is recently estimated as follows:

, Canada 3 million vehicles United I 37 million vehicles

[004] Vehicle "point-of-sale products" and services of a dealership, including warranties, insurances, banking products, and aftermarket accessories, are typically sold on used vehicles. These are not part of new vehicle sales since they are typically included as part of the sale price with manufacturer finance support). Across Canada, these products had a combined gross margin of 26% for franchised dealers and accounted for 17% of total gross profits. For perspective, 31% of total vehicle sales of the franchised dealership, used vehicles, accounted for 30% of the dealer's gross profits ¨ indicating that the sale of used vehicles is second only to vehicle servicing in profitability for a franchised dealer.

[005] Accordingly, franchised and independent dealers are always seeking faster, cheaper methods of acquiring and disposing of inventory, and would instinctively embrace a platform that gives them access to a significantly larger market.

[006] The markets where dealers, finance companies and other institutional players converge are complex and diverse. Vehicles are unlike most other assets traded on the internet. Any auction that seeks to earn the trust of these sophisticated participants must be tailored to address their specific concerns. Thousands of vehicles change hands between institutions in Canada on a daily basis - the majority of which using borrowed funds to finance the transactions. Vehicles are traded between institutions either through the wholesale or the auction markets. The most common types of transactions arise from:
= Dealer Consignment ¨ vehicles for sale originating from a car dealer, often trade-ins = Off-Lease ¨ vehicles originating from a lease portfolio = Ex-Rentals ¨ vehicles originating from a rental company = Commercial and Government Fleets ¨ vehicles vended out from large, institutional users = Repossession ¨ vehicles originating from loan portfolio liquidations = Salvage ¨ vehicles originating from insurance company write-offs

[007] The sale environments provided by the physical auctions are very similar to cattle auctions ¨ they are open, ascending bidding reserve auctions where the vehicle is briefly displayed with disclosures prior to the commencement of bidding.
Staging, bidding and auction processes are managed by an auctioneer on a podium, where the vendor may (and often does) participate in the sale. At the largest auction location in Canada up-to 16 separate auction lanes may be operating concurrently. These auctions provide a series of additional sale products and services including:
= pre and post vehicle inspections = sale arbitration services = ownership and vehicle management (including reconditioning) = vehicle shipping and transportation services = floor plan financing = repossession and bailiff services

[008] The difficulties facing the physical auctions currently include the following:
- Require attendance: Vehicles auctioned 1-by-1 - High overhead: Transporting vehicles & staff to the auction - Can only bid on one car at a time: Time intensive (unpredictable when each car is auctioned) - Preferential treatment given to large vendors: Sale dates are infrequent - Auction method won't allow retail business: Vehicles subject to theft and damage

[009] Within both the physical and electronic auctions, there are several variations of two kinds of e-based electronic auctions. Namely, the webcasting of physical reserve auctions over the internet with bidding from both online and physical bidders and;
internet based, e-BayTM style auctions with open, ascending, fixed-time bidding.
Nevertheless, despite the myriad of variations to this theme, true digital auctions still represent a very small percentage of the overall amount. Net of webcasting physical auction transactions to online bidding, the actual Internet auction volume is low.

[0010] The opportunity for an online auction solution to capture wholesale market share has not been realized. The massive infrastructure investments in property, facilities and human capital, make the physical players resistant to change and hostile to threats to the status quo. Unsurprisingly, these groups are supportive of webcasting their physical auctions, duplicating all of the issues found in physical auctions except bidders may attend remotely. Still problems remain:
= Impossible to monitor multiple auction lanes effectively = Cannot compete with buyers in attendance = Subject to bogus bidding (cannot determine if other bids are real)

[0011] Exclusively internet based auctions for vehicles have struggled with acquiring real market share from either the physical auction market or the wholesale, institution-to-institution segment. Like the physical auctions, internet auctions concentrated their efforts on vending off-lease and fleet vehicles to dealers.

[0012] Internet auctions modeled after physical auctions run into difficulty in attracting increased e-based volume from other segments for the following reasons:
= Not scalable ¨ no centralized clearing of ownerships or cars = Difficult to verify quality of vehicles = Poor arbitration ¨ often taking place after vehicle was delivered to purchaser = Inadequate post-sales inspection services = Long terms of cash clearing = Long terms of vehicle delivery = Method lacked effective price communication between vendor & bidder = Required constant monitoring of bids; a need to wait for auction to end

[0013] Vehicle auctions in many jurisdictions, including Canada, are the exclusive domain of car dealerships, rental/fleet companies, banks, insurance firms and other specialty finance companies. Consumers are prevented, by and large, from participating. In Canada, this consumer segment of the used vehicle market is significant yet ignored. Sales without dealer participation represent more than 34% of the entire market.

[0014] The traditional vehicle or auto auction market is saddled with inefficiencies resulting in lost market share and competitiveness. This has been most notable in their inability to create an effective electronic auction system. The reasons are twofold. First, the previous and existing auctions have kept the physical auction component unchanged making digital component little more than an underutilized appendage ¨
either completely freestanding or simply a telecast of the regular auction.
These digital venues do little towards improving actual vehicle and cash management.
Secondly, the bidding systems remain the same. Again, the advantages of new technology are squandered. As such, existing electronic auction systems are not positioned to set optimal pricing between buyers and sellers and are not scalable for volume.
Super Rocket is designed to address each of these weaknesses.

[0015] The system and method disclosed provides a more efficient auction model that enables participants to trade more, for less cost. It also enables retail consumers to participate. The system and methods of the present invention provide:

= A forum where participants have improved means to convey pricing = Accessible through multiple channels and is convenient to use = Robust cash clearing and vehicle/ownership management = Robust post-sales inspections and arbitration ¨ locally to the vendor's location 5 = Multiple, smaller physical locations

[0016] A consumer faces several issues when selling a car privately, including: no centralized marketplace to approach; no defined liquidity event; no market transparency; remarketing process is time intensive and often involves staging vehicle for re-sale; involves multiple unknown actors and is potentially unsafe; and vehicle transference and fund management - multi-stage process and time intensive.

[0017] The disclosed system provides a consumer with access to a centralized wholesale used car market. The system enables consumers to define sell date and payment terms; enables transparency, consumers can see the market price their vehicle; buyers are exclusively capable and informed ¨ Dealers; consumers are able to re-market vehicles AS IS ¨ the current auction "norm"; all communication is centralized and managed remotely; after conclusion of the sale a consumer drops the vehicle at an Auction Partner and picks up a cheque.

[0018] A vehicle dealership or dealer also faces several challenges in the used vehicle field, including: available time for replacing sold inventory is scarce; unlikely to bid on vehicles with high reserve; have a constant need for specific used vehicles; no centralized market to access consumer vehicles; limited funds available for used vehicle inventory ¨ liquidity management; lack of robust and timely arbitration applied to online purchases; managing multiple unsynchronized bids/auctions is very difficult; a preferential market environment due to the disclosure of vendors and their contact information.

[0019] The disclosed system provides a dealer with access to a centralized wholesale used car market with several desirable features: Dealers can bid on vehicles up to 10 days in advance with little or no maintenance; enables the targeting of certain types of vehicles; the system aggregates consumer vehicles into an auction format; the bid management created within the system enables predictable buying with full access to floor-plan lines; arbitration takes place prior to fund disbursement and delivery within 48 hours of auction close; the system is structured on a daily basis with little required daily attention for successful use; the system creates a level playing field for buyers ¨
no disclosure of vendors and their contact information.
SUMMARY

[0020] The system uses a platform that enables consumers and dealers to offer vehicles to car dealerships via auction. The system is directed to a new auction design to enhance the relationship between vendor and purchaser through new, direct communication methods and a more efficient pricing mechanism. This system may be incorporated by existing regional auctions, leveraging their current infrastructure and clients.

[0021] It is an alternative to the traditional auto auction market which is currently saddled with inefficiencies resulting in lost market share and competitiveness. This has been most notable in their inability to create an effective electronic auction system. The reason for this is twofold. First, the previous and existing auctions have kept the physical auction component unchanged making the new digital component little more than an underutilized appendage ¨ either completely freestanding or simply a telecast of the regular auction. These new digital venues do little towards improving actual vehicle and cash management. Secondly, their bidding systems remain the same.
Again, the advantages of new technology are squandered. As such, they are not positioned to set optimal pricing between buyers and sellers and their systems are not scalable for volume. The disclosed system is designed to address each of these weaknesses.
BRIEF DESCRIPTION OF THE DRAWINGS

[0022] The present invention may be further understood by reference to the description of the embodiments, taken in conjunction with the accompanying drawings, in which:

[0023] Figure 1 is a representative screen shot of the home page.

[0024] Figures 2 to 33 are representative screen shots described in the detailed description.

DETAILED DESCRIPTION

[0025] The description, which follows, and the embodiments described therein, are provided by way of illustration of an example, or examples of particular embodiments of principles and aspects of the present invention. These examples are provided for the purposes of explanation, and not of limitation, of those principles and of the invention.

[0026] The system has a server computer that interacts with an administration organization through one or more administration server computers, one or more seller devices, and one or more buyer devices. The server computer may be coupled to a network. Each seller and buyer device can communicate with the server computer via links and vice versa.

[0027] Seller devices, buyer devices, the server computer and administration server computer each include a non-transitory computer readable medium and a processor.

[0028] The server computer may include a single server computer, a distributed server computer, a cloud computing system or any computing system suitable for performing server functions. In general, any computing device capable of being programmed to perform server function in accordance with the present disclosure can be used.

[0029] The administration server computer may include a single server computer, a distributed server computer, a cloud computing system or any computing system suitable for performing server functions. In general, any computing device capable of being programmed to perform server function in accordance with the present disclosure can be used.

[0030] Each seller and buyer device may be a wireless phone such (e.g.
smart phone or the like), a personal digital assistant, a portable computer (e.g. a laptop, tablet computer, tablet, an e-book reader, a desktop computer, or other suitable computing device. In general, any computing device capable of being programmed to perform the seller devices and/or buyer device functions in accordance with the present disclosure and as described herein can be used.

[0031] Each non-transitory computer readable medium mentioned above may include RAM, ROM, EEPROM, flash memory, CD, DVD, magnetic disk drive, optical disk drive, electronic memory and/or any now known or later developed computer readable medium suitable for storing instructions and/or data.

[0032] Each processor can include a microprocessor, microcontroller, digital signal processors, application-specific integrated circuit, programmable logic device and/or the like.

[0033] The network and links can each include one or more of a local area network, a wide-area network, the Internet, a virtual private network, a wireless network (Wi-Fi, cellular, Bluetooth or the like), a wired network or the like.

[0034] The following outlines the system from the consumer user perspective. Once a consumer has registered and logged on to a web site, they will be at their "Dash Board". They select either of the "Book Sale" buttons to start the vehicle listing process.

[0035] A consumer begins by creating a Condition Report with a basic vehicle description. The consumer is then presented with listings of selectable features and options for the vehicle, including interior options, exterior options, safety options, and drive train options. The selected options are presented in list for review and acceptance.

[0036] A vehicle condition rating is next created. More detailed information regarding Exterior, Interior and Mechanical conditions (good, average, poor, not applicable) is inputted and saved to create a vehicle's rating on the Condition Report.

[0037] A Consumer may also add details and specific photographs about all damages to create an accurate Condition Report. Photos may be added by using downloadable photo software. The seller may select and upload up to 32 photos.

[0038] Additional vehicle disclosures are added, such as, use as daily rentals, taxi or limo, etc.; fire damage; flood damage, registration in other jurisdictions.

[0039] Once all information is inputted and saved the seller receives an acknowledgment message and reviews and approves the Condition Report.

[0040] The consumer then books a sale date: Checks the progress bar to ensure all vehicle information has been completed; enter a reserve price within reason to the black book comparison to give a fair Market value of the vehicle; and book a sale date for the vehicle to have live sealed bidding.

[0041] Before an auction a seller may access the following from the dashboard:
= View their vehicles status = Update their vehicle = See how many views their vehicle has had = Change their reserve price higher or lower (may only be raised pre-auction) = View the high bid once each round has commenced = Ensure vehicle complies with the system Posting Policy and select "Agree"

[0042] Auctions are held daily, Monday through Friday. The bid and offer process takes place over the course of a day on all vehicles concurrently and may be accessed either by: (1) call center, (2) internet, (3) cell phone application and (4) via the regional auction partners. The auction utilizes two rounds of closed bidding and two rounds of offers. There are two rounds of bidding for each auction. Round 1 Active ¨
from the time vehicle is entered until 12:00 pm EST on the selected sale date. Round 1 Closed ¨from 12:00 pm until 1:00 pm on sale day sellers can review bids and adjust reserve price.
Round 2 Active ¨ from 1:00 pm until 2:00 pm the top 7 bidders can submit higher bids.
Round 2 Closed ¨ from 2:00 pm until 3:00 pm sellers can review final bid results and adjust reserve price to sell.

[0043] Seller's Auction Dashboard ¨ Round 1: Once Round 1 is open the reserve price is not made public. Once round 1 is complete, if the high bid for the vehicle is lower than the reserve price, the seller can wait for Round 2 bidding. Sellers may lower their reserve or select Reserve OFF automatically selling the vehicle for the highest bid.
There is one hour between Round 1 ending and when Round 2 begins.

[0044] Seller's Auction Dashboard ¨ Round 2: Round 2 begins at 1:00 pm on sale day. During this round the reserve price is visible to all bidders as well as the bid activity details from Round 1 (high, median and low bid amounts). If the vehicle was sold prior to the opening of round 2, this will be displayed to all buyers and further bidding will not be allowed. Only the top 7 bidders are invited to participate in Round 2 by having the opportunity to adjust their bids to a higher amount.

[0045] Round 2 ends at 2:00 pm on sale day. At this time the final bid results are displayed on the seller's Dashboard. Once again, the high bid, median bid and low bid amounts are shown. If the high bid meets or exceeds the reserve price, the vehicle is sold for the high bid price.

[0046] Seller's Auction Dashboard ¨ Sold Vehicle: When a vehicle is sold it must be delivered to the auction partner location by the registered owner. The auction partner only releases the payment cheque for a vehicle to the registered owner of the vehicle with proof of photo identification in the form of either a driver's license or passport.

[0047] The auction system works in conjunction with a network of physical auction partner locations. These established businesses provide a convenient location for the 5 seller to deliver their sold vehicle and receive payment in the form of a guaranteed cheque. All buyers for the vehicle are registered with the auction partner ensuring they are legitimate and properly licensed motor vehicle dealers.

[0048] If the vehicle is sold the consumer will receive a "Sale Confirmation Email"
which will provide them with the details of the transaction including sale price, sell fee 10 and applicable taxes and the name and location of their local Partner Auction location.

[0049] The registered vehicle owner must deliver the sold vehicle, complete with the original vehicle registration document, to the local Auction Partner location for inspection within 2 business days of the close of the auction. The Partner Auction will inspect the vehicle to ensure it was accurately described in the Condition Report and that the vehicle is free of all liens and encumbrances.

[0050] Once the paperwork is verified and the vehicle has passed the inspection process, the consumer will be provided with a bill of sale and a payment cheque for the sale price of the vehicle less a selling fee.

[0051] The following outlines the system from the dealer user perspective.

[0052] Dealer Homepage ¨ Dashboard: Once a dealer has logged into the system they will be able to Navigate through the site as well as see any updates on previous vehicles. They may select the 'Vehicle Listing' page for a run list or the 'Bid Manager' page to see the current vehicles they have bid on or added to their 'Watch list".

[0053] Dealer Vehicle Listing Page: Once the dealer has selected their 'Vehicle Listing' page, they may view all vehicles booked into a sale up to 10 days in advance.

[0054] Dealer's View -Placing a Bid ¨ Pre Auction/ Round : The dealer may view the vehicle's Condition Report containing photographs, Black Book price comparisons, vehicle disclosures and all vehicle information as filled out by the Seller. A
Dealer can place a bid from this page and add the vehicle to their 'Watch list'. There are 2 confirmation screens following inputting the bid. The Dealer sees their bid displayed on the vehicle's Condition Report. The vehicle will also be added automatically to their 'Watch list' once a bid has been place on the vehicle.

[0055] Dealer's View - Bid Manager: Round 1 ¨ Active: The dealer can watch the vehicle on their Bid Manager Page. They can view the vehicles in Today's Auction, Future Auctions, Vehicles Purchased, Unsuccessful Bids and vehicles in their Watch list.

[0056] Vehicles are open for bidding to all dealers. The reserve prices are ONLY
visible to the consumer selling the vehicle during the first round of bidding.
All bids are sealed and are not visible to other dealers.

[0057] Dealer's View - Bid Manager: Round 1 ¨ Closed: After Round 1 closes;
the top 7 bids are put forward to Round 2. The consumer now may review the top seven bids made by dealers.

[0058] Dealer's View - Bid Manager: Round 2 ¨ Active: The Reserve prices are now visible to dealers. ONLY top seven bids are put through to Round 2. The dealer may receive email notifications once they have been outbid.

[0059] Dealer's View - Bid Manager: Round 2 Closed: After Round 2 has closed the auction is over. =Dealers will see the vehicles in with "Unsuccessful Bids" or "Purchased vehicles". For purchased vehicles, the dealer arranges with a member of the system administrator and their corresponding auction partner for vehicle pick up and a Post Sale Inspection if required.

[0060] The foregoing descriptions of embodiments of the present invention have been presented for purposes of illustration and description. They are not intended to be exhaustive or to limit the invention to the precise forms disclosed, and obviously many modifications and variations are possible in light of the above teaching. The embodiments were chosen and described in order to best explain the principles of the invention and its practical application, to thereby enable others skilled in the art to best utilize the invention and various embodiments with various modifications as are suited to the particular use contemplated.