WO2000034841A2 - Customer profit sharing conditional purchase offer (cpo) management system - Google Patents

Customer profit sharing conditional purchase offer (cpo) management system

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Publication number
WO2000034841A2
WO2000034841A2 PCT/US1999/028648 US9928648W WO2000034841A2 WO 2000034841 A2 WO2000034841 A2 WO 2000034841A2 US 9928648 W US9928648 W US 9928648W WO 2000034841 A2 WO2000034841 A2 WO 2000034841A2
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WO
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Application
Patent type
Prior art keywords
buyer
offer
product
seller
price
Prior art date
Application number
PCT/US1999/028648
Other languages
French (fr)
Other versions
WO2000034841A3 (en )
Inventor
Jay S. Walker
T. Scott Case
Daniel E. Tedesco
Original Assignee
Priceline.Com Incorporated
Priority date (The priority date is an assumption and is not a legal conclusion. Google has not performed a legal analysis and makes no representation as to the accuracy of the date listed.)
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Publication date

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    • GPHYSICS
    • G06COMPUTING; CALCULATING; COUNTING
    • G06QDATA PROCESSING SYSTEMS OR METHODS, SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL, SUPERVISORY OR FORECASTING PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL, SUPERVISORY OR FORECASTING PURPOSES, NOT OTHERWISE PROVIDED FOR
    • G06Q30/00Commerce, e.g. shopping or e-commerce
    • G06Q30/02Marketing, e.g. market research and analysis, surveying, promotions, advertising, buyer profiling, customer management or rewards; Price estimation or determination

Abstract

A customer profit sharing conditional purchase offer (CPO) management system is disclosed for processing CPOs received from one or more buyers for a product. The system processes each received CPO to determine whether one or more sellers are willing to accept a given CPO. The customer profit sharing CPO management system is operated to share the profit that is earned from a given conditional purchase offer with the buyer by returning a portion of the profit to the buyer in the form a buyer discount. The buyer discount can be, for example, in the form of (i) a monetary discount to the current transaction, (ii) a rebate, or (iii) a coupon or credit that may be redeemed for a discount against future transactions.

Description

CUSTOMER PROFIT SHARING CONDITIONAL PURCHASE OFFER (CPO) MANAGEMENT SYSTEM

This application is a continuation-in-part of U.S. Patent Application Serial No. 08/943,483 filed October 3, 1997, which is a continuation-in-part of U.S. Patent Application Serial No. 08/923,683 filed September 4, 1997, which is a continuation-in-part of U.S. Patent Application Serial No. 08/889,319, filed July 8, 1997, which is a continuation-in-part of U.S. Patent Application Serial No. 08/707,660, filed September 4, 1996, now issued U.S. Patent No. 5,794,207, each of which is incorporated in its entirety by reference herein.

Field of the Invention

The present invention relates generally to a system for processing the sale of products and, more particularly, to methods and apparatus for processing the sale of products, such as airline tickets and automobiles, to buyers who have submitted a conditional purchase offer for the purchase of such products.

Background of the Invention

Most systems for processing the sale of products are seller-driven, whereby the seller prices, packages, configures and offers the product for sale, and the buyer decides whether or not to accept the seller's offer. In a buyer-driven system, however, the buyer dictates the terms of the offer and one or more sellers decide whether or not to accept the offer. A "help wanted" advertisement, for example, is a buyer-driven inquiry since the employer is looking to locate and buy the services of a qualified employee. The inquiry is advertised to a large number of potential employees, who may respond by submitting their resumes to the prospective employer.

Priceline.com, Incorporated of Stamford, CT is a merchant that has successfully implemented a buyer-driven system for the sale of products, such as airline tickets and automobiles. Priceline.com utilizes a Conditional Purchase Offer (CPO) Management System, described in the parent and grandparent applications to the present invention, that processes conditional purchase offers received from individual buyers. These conditional purchase offers contain one or more buyer-defined conditions for the purchase of goods or services, at a buyer- defined price They are typically guaranteed by a general-purpose account such as a debit or credit account, and thereby provide sellers with a mechanism for enforcing am agreement that may be reached with the buyer The conditional purchase offers are provided b\ the CPO Management System to sellers, either directly or using seller-supplied rates, for individual sellers to either accept or reject If a seller accepts a conditional purchase offer the CPO Management System binds the buyer on behalf of the accepting seller, to form a legally binding contract

Thus, the CPO Management System empowers individual buvers to obtain goods and services at a price set by the buyer The CPO Management System provides numerous commercial advantages to sellers as well For example, the CPO Management System permits individual sellers to effectively sell excess capacity when actual demand fails to meet forecasted demand In particular, the CPO Management System provides an effective mechanism for sellers to be confident that if they accept a buyer's offer, the buyer will purchase the requested goods or services at the agreed-upon pπce, and not just use the information to ascertain the seller's underlying level of price flexibility, which, if known to a seller's competitors or customers, could impact the seller's overall profit structure

For many transactions, the CPO Management System will effectively complete transactions in this manner Typically, however, a percentage of buyers will submit purchase offers that are not acceptable to any seller, typically because the price offered by the buyer is too low The success of the CPO Management System depends, at least in part, on its utilization by a large number of both buyers and sellers Specifically, buyers are incented to submit conditional purchase offers if they know the conditional purchase offers will be reviewed by a large number of potential sellers Sellers are incented to consider conditional purchase offers if they can expect a large number of attractive offers In addition to being a lost business opportunity, unacceptable conditional purchase offers require buyers and sellers to spend time submitting and reviewing such conditional purchase offers Thus, buyers and sellers alike may be frustrated and discouraged from utilizing the CPO Management System, if the acceptance rate for submitted conditional purchase offers does not meet satisfactory levels

While buyers are empowered by the ability to "name their own price" using a buyer-driven commerce system, buyers may be wary when it comes to deciding what price to offer for a given product For example, buyers may be concerned that their offer price is too low to be acceptable by a seller That is, buvers may be afraid that their offer ma\ be a wasted attempt to purchase the sought-after product because their offer pπce be less than am seller's acceptable floor price On the other hand, buyers mav also be concerned that the\ are spending more than necessarv and that their offer price is too high for the sought-after product As a result, a buyer-driven commerce system, such as Pπcehne encourages buyers to become educated about the current market price for the sought-after product before submitting a conditional purchase offer Since the CPO Management System permits sellers to sell excess capacity without revealing the seller's underlying level of price flexibility sellers mav nonetheless be willing to sell the sought-after product at a price below the market price Thus, it is difficult for buyers to accurately predict an appropriate offer price

In addition, since a buver-dπven system, such as Pπceline, often relies on an intermediary between buyers and sellers buyers may be hesitant to submit conditional purchase offers at all, out of fear that the intermediary will profit from a mistakenly high offer price Consequently, there exists a need for a system and method that reduce consumer anxiety associated with submitting conditional purchase offers

Summary of the Invention

A customer profit sharing conditional purchase offer (CPO) management system, hereinafter referred to as the CPO system, is disclosed for processing CPOs received from one or more buyers for a product The CPO system processes each received CPO to determine whether one or more sellers are willing to accept a given CPO A portion of the profit derived from a sale is returned to the Buyer

According to one aspect of the invention, the CPO system is operated to share the profit that is earned from a given conditional purchase offer with the buyer and thereby reduce consumer anxiety associated with submitting conditional purchase offers The present invention operates to reassure a buyer that the CPO management system will not benefit to the detriment of the buyer from an excessive profit derived from an accepted conditional purchase offer The CPO system returns a predefined portion of the Transaction Profit generated from a conditional purchase offer to the buyer in the form of a Buyer Discount The Buyer Discount, or portion of the Transaction Profit returned to the buyer. can be set at any value and may vary based on product category. In addition, the Buyer Discount can be dynamically adjusted according to historic shopping patterns of a given buyer. Thus, the CPO system can be implemented as a loyalty reward program that progressively increases the Buyer Discount each time the buyer submits a conditional purchase offer. In addition, the Buyer Discount can be dynamically adjusted according to market conditions or in accordance with a fee paid by the buyer when the CPO is submitted.

The Buyer Discount can be returned to the buyer, for example, in the form of (i) a monetary discount to the current transaction, (ii) a rebate, or (iii) a coupon or credit that may be redeemed for a discount against future transactions. The total transaction profit may be allocated among the operator of the CPO system, the buyer and the seller, as desired, in accordance with predefined parameters.

A more complete understanding of the present invention, as well as further features and advantages of the present invention, will be obtained by reference to the following detailed description and drawings.

Brief Description of the Drawings

FIG. 1 is a schematic block diagram illustrating a customer profit sharing conditional purchase offer (CPO) management system in accordance with the present invention; FIG. 2 is a schematic block diagram of the exemplary central controller of FIG.

1;

FIG. 3 illustrates a sample table from the seller database of FIG. 2, FIG. 4 illustrates a sample table from the buyer database of FIG. 2; FIG. 5 illustrates a sample table from the offer database of FIG. 2; FIG. 6 illustrates a sample table from the seller rules database of FIG. 2;

FIGS. 7A-C together comprise a flowchart describing an exemplary CPO evaluation process implemented by the central controller of FIG. 2; and

FIG. 8 is a flowchart describing an exemplary rules evaluation subroutine implemented by the central controller of FIG. 2. Detailed Description

FIG 1 shows a customer profit sharing conditional purchase offer (CPO) management system 100, hereinafter referred to as the CPO system 100, for receiving and processing CPOs for one or more goods or services, from one or more buyers 1 10 or agents 120 (on behalf of buyers 1 10) The CPO system 100 determines whether one or more sellers, such as sellers 130, 140, 150 are willing to accept a given CPO As discussed further below, if a seller accepts a given CPO. the CPO system 100 is operated to bind the buyer on behalf of the accepting seller, to form a legally binding contract

CPO TERMINOLOGY As used herein, the following terms are defined to mean.

Agency-Based Seller - A seller who has delegated authority to the customer profit sharing CPO management system operator to accept or reject a given CPO using seller- defined CPO Rules

Broadcast-Based Seller - A seller who has received a CPO from the customer profit sharing CPO management system (directly or by, for example, access to an electronic posting) for evaluation.

Conditional Purchase Offer (CPO) - An offer containing one or more conditions submitted by a buyer for the purchase of goods and/or services at a buyer-defined price.

Binding Conditional Purchase Offer (Binding CPO) - A binding offer containing one or more conditions submitted by a buyer for the purchase of goods and/or services at a buyer-defined price As compared to a CPO, a Binding CPO includes a payment guarantee, for example with a General Purpose Account, and authorization to debit the Account upon acceptance of the CPO

Buyer Discount - A portion of the Transaction Profit arising from a CPO-based transaction that is returned to the Buyer As is noted below, a Buyer Discount may be returned to a Buyer in one of many different forms

Conditional Purchase Offer (CPO) Rule - A restriction defined by an Agency- Based Seller under which the operator of the customer profit sharing CPO management system may act as an agent to determine whether to fill a CPO for that Agency-Based Seller CPO Management System - One or more controllers that receive and process CPOs for one or more goods or services, from one or more bu\ers to determine if one or more sellers (Agencv-Based or Broadcast-Base Sellers) are willing to accept a CPO

General Purpose Account - Any account from which payment can be made including a credit or debit account

Transaction Profit - The difference between a buyer offer price and a seller price The Transaction Profit may be divided in many different manners, including as profit to the CPO system operator (who may or may not be the seller of the products), as profit to the seller (if different from the CPO system operator), and/or as a discount to the buyer In the present invention, the CPO system operator is described as a separate party from the seller It is noted that "profit" may be positive or negative, a negative profit indicating a loss on a transaction Negative profits may be realized , for example, when a buyer offer is subsidized to facilitate a transaction

According to one embodiment of the present invention, the CPO system 100 is operated to share the Transaction Profit that is earned from a given conditional purchase offer with the buyer, in the form of the Buyer Discount Thus, a buyer can have some level of confidence that the CPO system 100 will not benefit from an excessive profit derived from an accepted conditional purchase offer As such, operators of the CPO system 100 may advertise that buyers will receive a predefined portion of the profit generated from their conditional purchase offer(s)

In one example, a buyer submits a Conditional Purchase Offer for a given product with an offer pπce of two hundred dollars ($200 00) to a CPO system 100 that returns fifty percent (50%) of the Transaction Profit to the buyer in the form of a specified Buyer Discount The lowest acceptable price of any seller is found to be one hundred and fifty dollars ($150 00) The buyer is thus provided a Buyer Discount of fifty percent of the Transaction Profit, or 50% of $50 = $25 In this example, the Buyer Discount is applied to the immediate transaction in the form of a monetary discount, and the buyer is only charged one hundred and seventy five dollars ($175 00), in lieu of his offer price of $200, to complete the transaction In different embodiments, the Transaction Profit may be allocated in differing portions amongst the profit realized by the operator of the customer profit sharing CPO management system, the discount provided to the buyer and the profit realized by the seller, as desired, in accordance with specified parameters The Buyer Discount can be set at any value and may vary based on product category In addition, the Buyer Discount can be dynamically adjusted according to historic shopping patterns of a given buyer For example, the CPO system 100 can be implemented as a loyalty reward program that progressively increases the Buyer Discount each time the buyer submits a conditional purchase offer In addition, the Buyer Discount can be dynamically adjusted according to market conditions For example, a sudden increase in market prices may warrant a reduction in the Buyer Discount, thereby providing control over the profit stream recognized by the operator of the CPO system 100 In further variations, the Buyer Discount may be determined based on a fee paid by the buyer when submitting a CPO or based on a convenience rating or quality rating of the product delivered to the buyer For example, a buyer may receive a higher Buyer Discount in an airline implementation if the buyer is required to change planes or have a stop-over on the flight

The Buyer Discount can be returned to the buyer in one of many forms In a first form, for example, the Buyer Discount is provided as a monetary discount to the current transaction, wherein a sum less than the buyer offer price can be charged to the buyer It will be understood that the desired CPO operator profit, and hence the value of the Buyer Discount, may be determined, for example, as a percent of the Transaction Profit, or as a fixed dollar minimum. In another embodiment, the Buyer Discount is provided as a rebate returned to the buyer after the consummation of the transaction. In yet another embodiment, the Buyer Discount may be provided in the form of a coupon or credit provided to the buyer that may be redeemed for a discount against future transactions. Many other methods of applying a discount to a sales transaction are known to those skilled in the art.

In yet another embodiment, the Transaction Profit may be split in some predetermined manner between the CPO system operator, the buyer, and the seller It will be understood that such profit sharing with a seller would typically be in addition to any profits built into a seller's selling price In a further variation on splitting some portion of the profits with a seller the portion of the profit allocated to the seller can be dynamically determined so that the more conditional purchase offers that a seller accepts the higher the margin the seller receives, thereby encouraging sellers to participate in the buyer-driven system

As shown in FIG 1 the CPO system 100 includes a central controller 200 discussed further below in conjunction with FIG 2 The CPO system 100 mav provide a given CPO to selected sellers 130 140, 150 based on predefined screening criteria so that sellers onlv obtain CPOs that they may be interested in or are authorized to screen AlternativeK the CPO system 100 may provide all CPOs to all sellers for screening

As discussed further below, each buyer 1 10 contacts the CPO system 100 for example, by means of telephone, facsimile, online access (I e the Internet), electronic mail m- person contact or through an agent, and provides the CPO system 100 with the terms of the buyer's CPO It is noted that each buyer 1 10 and seller 130, 140, 150 may employ a general- purpose computer for communicating with the CPO system 100 The general-purpose computer may be comprised of a processing unit, a modem, memory means and any software required to communicate with the CPO system 100

The CPO system 100, as well as any general-purpose computers utilized by buyers 110 or sellers 130, 140, 140 (collectively, the "nodes") transmit digitally encoded data and other information between one another The communication links between the nodes can comprise, for example, a cable, fiber or wireless link on which electronic signals can propagate AGENCY AND BROADCAST-BASED SELLERS

According to one feature of the present invention, the CPO system 100 provides an optional agency feature that permits the CPO system 100 to accept or reject a given CPO on behalf of certain agency-based sellers 130 who have delegated such authority to the CPO system 100 Thus, the CPO system 100 (I) evaluates CPOs on behalf of certain agency-based sellers 130 who have delegated authoπty to the CPO system 100 to accept or reject a given CPO, and (ii) permits broadcast-based sellers, such as sellers 140, 150 to evaluate CPOs independently

Thus, the CPO system 100 can optionally provide one or more CPOs to each broadcast-based seller 140 150, for the seller 140, 150 to independently determine whether or not to accept a given CPO It is noted that the CPO system 100 can provide a CPO to each appropriate broadcast -based seller 140, 150, for example, by means of a broadcast transmission, or by means of posting the CPO, for example, on an electronic bulletin board or secure web site accessible by each broadcast-based seller 140, 150 Alternatively, the CPO system 100 can evaluate one or more CPOs against a number of CPO rules defined by one or more agen - based sellers 130, to decide on behalf of an agency-based seller 130 whether to accept or reject a given CPO An illustrative set of CPO rules for one illustrative agency-based seller 130 is set forth in FIG 6 Thus, the CPO system 100 can determine if one or more sellers 140, 150 accepts a given CPO by providing the CPO to each seller 140, 150 and receiving an acceptance or rejection, or by applying the CPO to the CPO rules to render a decision to either accept, reject or counter a CPO on behalf of a particular seller 130 As discussed further below, a CPO rule is a set of restrictions defined by a given agency-based seller 130 under which the seller 130 is willing to accept a CPO For a more detailed discussion of CPO rules, the manner in which they are generated, and related security issues, see U.S. Patent Application Serial No 08/889,319, entitled Conditional Purchase Offer Management System, filed July 8, 1997, referenced herein above A CPO can optionally contain one or more buyer-defined variable or flexible conditions, typically specified using a range, which may be filled within the discretion of the seller. For example, the variable condition may be a date range within which the product may be delivered by the seller Other variable conditions might include a price range, a performance range or a quality range. The seller may then choose a product to fill the buyer's flexible condition within the specified range. Such a variable condition may provide substantial assistance to the seller in filling the buyer's CPO For example, with respect to an airline ticket, the seller may be able to be meet a buyer's specified price if the CPO permits the seller to select a flight within a range of times or days

It is desirable that in one embodiment the present invention prevents buyers from repetitively querying, or "pinging," the CPO system 100 to determine the underlying price flexibility of the sellers Such pinging might result in potential damage to the seller's price margins and profitability As mentioned above, a binding CPO discourages pinging by ensuring that if an offer is accepted, the buyer must actually purchase the product Another method of discouraging pinging includes preventing buyers from submitting repetitive, similar offers For example, repetitive CPOs that change only the offer price in an effort to determine price flexibility may be blocked by the system In one embodiment, subsequent CPOs by the same buyer are accepted by the CPO system 100 only if there is some substantial change to the buver specifications that would result in the purchase of an essentially different product For example, with respect to the sale of airline tickets, subsequent CPOs may be accepted for processing only if there is a significant change in the itinerary Yet another method for discouraging pinging is to require a payment or fee for each submission of a CPO

In one embodiment of the invention, seller identities are maintained anonymous within the CPO system 100 until a CPO is accepted Such seller anonymity, by itself and in combination with the discouragement of price pinging discussed above, enables sellers to participate in the CPO process without fear of undercutting their published price structures and losing their regular customer base For example, most retailers have published product prices, and loyal customers who willingly pay those prices. Participating in the CPO system 100 enables a seller to discount those products, potentially below its published prices, to fill offers from buyers who might not otherwise pay published prices. With anonymity, these sellers can more freely participate in the CPO process with less fear of losing their regular customers and undercutting their published price structure

FIG. 2 is a block diagram showing the architecture of an illustrative central controller 200. The central controller 200 includes certain standard hardware components, such as a central processing unit (CPU) 205, a random access memory (RAM) 210, a read only memory (ROM) 220, a clock 225, a data storage device 230, and a communications port 240 The CPU 205 may be linked to each of the other listed elements, either by means of a shared data bus, or dedicated connections, as shown in FIG. 2. The communications port 240 connects the central controller 200 to each buyer 1 10 and seller 130 and optionally to remote credit processing servers. The communications port 240 can include multiple communication channels for simultaneously establishing a plurality of connections.

The ROM 220 and/or data storage device 230 are operable to store one or more instructions, discussed further below in conjunction with FIGS 7 and 8, which the CPU 205 is operable to retrieve, interpret and execute For example, the ROM 220 and/or data storage device 230 store processes to accomplish the transfer of required payments, charges and debits, between the sellers 130 and buyers 1 10. The processing of such accounting transactions can be secured in a conventional manner, for example, using well-known cryptographic techniques

As discussed further below in conjunction with FIGS. 3 through 6, respectively. the data storage device 230 includes a seller database 300, a buyer database 400, an offer database 500 and a seller rules database 600. The seller database 300 stores information on each seller 130, 140, 150 which is registered with the CPO system 100 to sell products, i.e., goods and/or services to CPO buyers, including contact information. The buyer database 400 stores information on each buyer transacting business through the CPO system 100, including identification information and billing information, such as a credit card number or another general-purpose account identifier. The offer database 500 contains a record of each CPO being processed by the CPO system 100, including the conditions associated with the CPO and the associated status. The seller rules database 600 maintains the CPO rules for one or more agency-based sellers 130. In addition, the data storage device 230 may also include a table (not shown) for storing predetermined rules and/or criteria for splitting/distributing Transaction Profits between CPO system operator profits, seller profits (if any) and Buyer Discounts.

In addition, the data storage device 230 includes a CPO evaluation process 700 and a rules evaluation subroutine 800, discussed further below in conjunction with FIGS. 7 and 8, respectively. Generally, the CPO evaluation process 700 includes the steps of (i) receiving each CPO from a buyer 110, (ii) determining the transaction margin and allocates an appropriate portion of the margin to the buyer, (iii) providing each CPO to the appropriate broadcast-based sellers and evaluates each CPO against the appropriate rules of each agency-based seller, and (iv) determining whether any sellers 130, 140, 150 accept the CPO. The rules evaluation subroutine 700 is a subroutine executed by the CPO evaluation process 700, which receives a CPO and compares the CPO against the rules of one or more agency-based sellers to generate a response on behalf of the sellers to the given CPO.

DATABASES FIG. 3 illustrates an exemplary seller database 300 that stores information on each seller which is registered with the CPO system 100 to sell products, i.e., goods and/or services to CPO buyers. The seller database 300 maintains a plurality of records, such as records 305-330, each associated with a different seller. For each seller identifier listed in field 340, the seller database 300 includes the corresponding seller name in field 350. as well as a CPO tracking number and a seller account number in fields 360 and 370. respectively It is noted that the seller identifier stored in field 340 may be utilized, for example, to index the offer database 500 to identify CPOs which have been accepted by the corresponding seller FIG 4 illustrates an exemplary buyer database 400 that stores information on each buyer transacting business through the CPO system 100, including biographical information and billing information, such as a credit card number or another general purpose account identifier The buyer database 400 maintains a plurality of records, such as records 405-415, each associated with a different buyer For each buyer identifier in field 420. the buyer database 400 includes the corresponding buyer name and address in fields 430 and 440, respectively, and credit card account number in field 450. In addition, the buyer database 400 includes the CPO tracking numbers associated with the buyer in field 460 The buyer identifier stored in field 420 may be utilized, for example, to index a historical database (not shown) of previous purchases and CPOs associated with the buyer FIG. 5 illustrates an offer database 500 that contains a record of each CPO being processed by the CPO system 100, including the subject and conditions of each CPO and the associated status The offer database 500 maintains a plurality of records, such as records 505- 525, each associated with a different CPO For each CPO number listed in field 540, the offer database 500 includes an identifier of the buyer associated with the CPO in field 545, as well as the subject and conditions of the CPO in fields 550 and 555, respectively In addition, the offer database 500 can record the buyer-specified CPO price and current status in fields 565 and 575, respectively The current status options recorded in field 575 include, for example, pending (or active), accepted, rejected or expired

FIG 6 illustrates a seller rules database 600 that maintains the CPO rules for one or more agency-based sellers. The seller rules database 600 maintains a plurality of records, such as records 605-615, each associated with a different CPO rule For each CPO rule number identified in field 640, the seller rules database 600 identifies the corresponding seller identifier in field 645, as well as the minimum required conditions and price for a CPO to be accepted on behalf of the corresponding seller in fields 650 and 655, respectively PROCESSES As discussed above, the central controller 200 can execute a CPO evaluation process 700 that includes the steps of (I) receiving each CPO from a buver 1 10 (n) determining the Transaction Profit and allocating an appropriate portion of that profit to the buver (in) providing each CPO to the appropriate broadcast-based sellers and evaluating each CPO against the appropriate rules of each agency-based seller, and (IV) determining whether anv sellers 130 140, 150 accept the CPO While CPOs may be binding or nonbinding in nature the present embodiment is described with respect to a binding CPO The processing of a nonbinding CPO is substantially identical, with the exception that authorization to charge the buver credit card account (or another general purpose account) may be obtained after a seller acceptance of the CPO is identified Alternatively, the process may be identical with the buyer being given the option to renege after the CPO is accepted by a seller

As shown in FIG 7, the CPO evaluation process 700 initially receives a CPO from a buyer 1 10 during step 705 A test is then performed during step 710 to determine if the CPO is valid For example, the test performed during step 710 may determine if the buver has specified each of the relevant conditions for a given product category

If it is determined duπng step 710 that the terms of the CPO are not valid, then the buyer is requested to retransmit the CPO during step 720 and program control returns to step 705 If, however, it is determined during step 710 that the terms of the CPO are valid, then an identifier of a general purpose account, such as a credit or debit card account from which funds may be paid, and an authorization to charge such general purpose account, are received during step 715 In this manner, the CPO is guaranteed with a general-purpose account, for example, using a line of credit on a credit card account Appropπate legal language can be displayed or read to the buyer at the time the CPO is received, to form a binding CPO

A test is then performed during step 725 to determine if the payment identifier is valid For example, the payment identifier may be transmitted to a remote credit card server for pre-authoπzation or the like If it is determined during step 725 that the payment identifier is not valid, then the buyer is requested to retransmit a different payment identifier during step 730 and program control returns to step 715 If, however, it is determined during step 725 that the payment identifier is valid, then the CPO system 100 performs a further test during step 735 to determine if the offer price specified by the buyer is greater than or equal to an acceptable seller price An acceptable seller price mav be obtained, for example, bv analyzing similar CPOs contained in a historical offer database 500 In addition, the acceptable seller price mav be obtained directly from floor-price information provided bv the sellers, including pricing information recorded in the seller rules database 600 or from published retail prices, such as a customer reservation system (CRS) or proprietary airline reservation system ( ARS) of each airline in an airline implementation

If it is determined during step 735 that the offer price specified by the buyer is not greater than or equal to an acceptable seller price, then a rejection message is provided to the buyer during step 740 before program control terminates during step 745 Alternatively, the operator of the CPO system 100 or a third party can subsidize the buyer-specified CPO offer pπce to bπng it above the determined acceptable seller price If it is determined during step 735 that the offer price specified by the buyer, as submitted or as subsidized, is greater than or equal to an acceptable seller pπce, then the Transaction Profit is calculated during step 750 by subtracting the acceptable seller price from the original offer price The desired CPO operator profit is then retrieved from the data storage device 230 or ROM 220 during step 755 (FIG 7B) As noted above, this desired profit may be determined in many different ways including, for example, a fixed minimum profit, a percentage of the Transaction Profit, or some combination of a percentage with a fixed minimum The Buyer Discount is determined during step 760 by subtracting the CPO operator profit from the Transaction Profit The transmitted offer price is calculated during step 765 by subtracting the Buyer

Discount and the CPO operator profit from the original buyer offer price It will be understood that, unless it is decided to share the Transaction Profit in some manner with the seller, the CPO system operator profit and the Buyer Discount together will total the Transaction Profit The transmitted offer pπce is thus equal to the seller asking price as determined in step 735 The CPO evaluation process 700 then transmits the CPO, together with the calculated transmitted offer pπce, to the broadcast-based sellers and executes the rules evaluation subroutine 800, discussed below in conjunction with FIG 8, for agency-based sellers during step 770

Since the offer pπce was previously determined to be acceptable to at least one seller, at least one acceptance signal is received from one or more sellers during step 775 Thereafter, the CPO evaluation process 700 selects one accepting seller during step 780 and notifies the corresponding seller during step 784. For example, the accepting seller can be selected based upon (i) the priority in which the acceptances are received, (ii) the CPO acceptance rate of each seller, (iii) priorities negotiated by each seller, (iv) the acceptance providing the lowest cost to the buyer, or (v) the highest commission rates paid by the seller to the CPO system 100.

The buyer's personal information is provided to the seller during step 788 (FIG 7C) and the buyer is notified of the acceptance. A test is then performed during step 792 to determine if the buyer reneges on consummating the transaction. If it is determined during step 792 that the buyer reneges on consummating the transaction, then a penalty is charged to the buyer's designated general-purpose account during step 796, before program control terminates during step 798. It is noted that for a nonbinding CPO the buyer may be charged a penalty for failing to complete the transaction in the event the CPO is accepted. For a binding CPO, however, the CPO is guaranteed by the general purpose account and it is not possible for the buyer to renege. If, however, it is determined during step 792 that the buyer does not renege on consummating the transaction, the buyer discount is returned to the buyer during step 795, before program control terminates during step 798.

In the described embodiment, the Buyer Discount is returned to the buyer through an immediate monetary discount to the buyer offer price. In alternate embodiments, as described above, the Buyer Discount may be returned in the form of a rebate or a future credit. In an alternate implementation, the CPO evaluation process 700 can determine an acceptable seller price, and whether or not any seller accepts a CPO, in a single step. In other words, the CPO evaluation process 700 will receive and process a CPO from a buyer in the manner described above during steps 705 through 730. However, in this alternate embodiment, steps 735 through 765 are not performed, and the CPO is provided to seller during step 770 with the buyer-specified CPO offer price. If the CPO is accepted by a seller at a price below the buyer-specified CPO offer price, then the appropriate CPO system operator profits and Buyer Discount are determined, and the latter is returned to the buyer.

As previously indicated, the CPO evaluation process 700 executes a rules evaluation subroutine 800 during step 770 to determine if one or more agency-based sellers are willing to accept a given CPO. As shown in FIG. 8, the rules evaluation subroutine 800 compares the terms associated with the CPO during step 810 with the corresponding restrictions set forth in any CPO rules defined bv any agency-based seller A. test is then performed during step 820 to determine if any CPO rule is satisfied If it is determined during step 820 that no CPO rule is satisfied, then program control terminates during step 840 If. however, it is determined during step 820 that a CPO rule is satisfied, the corresponding seller is identified during step 830, before program control terminates during step 840

It is to be understood that the embodiments and variations shown and described herein are merely illustrative of the principles of this invention and that various modifications may be implemented by those skilled in the art without departing from the scope and spirit of the invention

Claims

What is claimed is:
1 A method of processing a sale of a product, comprising the steps of receiving from a buyer a conditional purchase offer for said product said conditional purchase offer including at least one buyer-defined condition and an offer price, determining a seller price for said product, determining a total transaction profit as a function of the difference between said offer price and said seller pπce, determining a buyer discount, processing said conditional purchase offer to effect the purchase of said product and returning said buyer discount to said buyer
2 A method in accordance with claim 1 wherein said step of determining a seller pπce comprises determining said seller price before said step of processing said conditional purchase offer
3 A method in accordance with claim 1 wherein said step of processing said conditional purchase order includes the steps of making said conditional purchase offer available for acceptance by a plurality of potential sellers, and identifying at least one accepting seller
4 A method in accordance with claim 3 wherein said step of determining a seller pπce is performed after said step of identifying at least one accepting seller
5 A method in accordance with claim 1 wherein said step of determining a buyer discount compπses calculating said buyer discount as a function of said total transaction profit
6 A method in accordance with claim 1 wherein said step of determining a buyer discount comprises retrieving a stored buyer discount
7 A method in accordance with claim 1 wherein said step of returning said buv er discount comprise the steps of subtracting said buyer discount from said offer price to provide an adjusted offer price, and performing said step of processing said conditional purchase offer using said adjusted offer price
8 A method in accordance with claim 1 wherein said step of returning said buyer discount comprises providing said buyer a credit for a future transaction
9 A method of processing a sale of a product, comprising the steps of receiving from a buyer a conditional purchase offer for said product, said conditional purchase offer including at least one buyer-defined variable condition, an offer pπce, a payment identifier, and authorization to use said payment identifier to pay said offer price, determining a seller pπce for said product, determining a total transaction profit as a function of the difference between said offer price and said seller pπce, determining a buyer discount, processing said conditional purchase offer to effect the purchase of said product, and returning said buyer discount to said buyer
10 A method in accordance with claim 9 and further including the step of maintaining an identity of at least one seller of said product anonymous from said buyer
1 1 A method in accordance with claim 9 and further including the steps of comparing the elements of said conditional purchase offer to the elements of a prior conditional purchase offer previously received from said buyer and rejecting said conditional purchase offer if said elements of said conditional purchase offer are substantially identical to the elements of said prior conditional purchase offer
12 A method in accordance with claim 9 wherein said step of determining a seller price comprises determining said seller price before said step of processing said conditional purchase offer
13 A method in accordance with claim 9 wherein said step of processing said conditional purchase order includes the steps of making said conditional purchase offer available for acceptance by a plurality of potential sellers, and identifying at least one accepting seller
14 A method in accordance with claim 13 wherein said step of determining a seller pπce is performed after said step of identifying at least one accepting seller
15 A method in accordance with claim 9 wherein said step of determining a buyer discount comprises calculating said buyer discount as a function of said total transaction profit
16 A method in accordance with claim 9 wherein said step of determining a buyer discount compπses retrieving a stored buyer discount
17 A method in accordance with claim 9 wherein said step of returning said buyer discount compπse the steps of subtracting said buyer discount from said offer price to provide an adjusted offer price, and performing said step of processing said conditional purchase offer using said adjusted offer price
18 A method in accordance with claim 9 wherein said step of returning said buver discount comprises providing said buyer a credit for a future transaction
19 A system for processing a sale of a product, comprising a processor, a memory connected to said processor and storing instructions for controlling said processor, said processor operative with said instructions in said processor to receive from a buyer a conditional purchase offer for said product said conditional purchase offer including at least one buyer-defined condition and an offer price determine a seller price for said product, determine a total transaction profit as a function of the difference between said offer price and said seller pπce, determine a buyer discount, process said conditional purchase offer to effect the purchase of said product. and return said buyer discount to said buyer
20 A system for processing a sale of a product, comprising a processor, a memory connected to said processor and storing instructions for controlling the operation of said processor, said processor operative with said instructions in said memory to receive from a buyer a conditional purchase offer for said product, said conditional purchase offer including at least one buyer-defined variable condition, an offer price, a payment identifier, and authorization to use said payment identifier to pay said offer price, determine a seller price for said product, determine a total transaction profit as a function of the difference between said offer price and said seller price, determine a buyer discount, process said conditional purchase offer to effect the purchase of said product. and return said buyer discount to said buyer
21 A system for processing a sale of a product, comprising means for receiving from a buyer a conditional purchase offer for said product, said conditional purchase offer including at least one buyer-defined condition and an offer price, means for determining a seller price for said product, means for determining a total transaction profit as a function of the difference between said offer price and said seller price, means for determining a buyer discount, means for processing said conditional purchase offer to effect the purchase of said product, and means for returning said buyer discount to said buyer
22. A system for processing a sale of a product, comprising. means for receiving from a buyer a conditional purchase offer for said product, said conditional purchase offer including at least one buyer-defined variable condition, an offer price, a payment identifier, and authorization to use said payment identifier to pay said offer price, means for determining a seller price for said product, means for determining a total transaction profit as a function of the difference between said offer price and said seller price, means for determining a buyer discount, means for processing said conditional purchase offer to effect the purchase of said product, and means for returning said buyer discount to said buyer
23 A computer program product comprising a computer usable medium having computer readable program code means embodied in said medium for processing a sale of a product, said computer program product including computer readable program code means for receiving from a buyer a conditional purchase offer for said product, said conditional purchase offer including at least one buyer- defined condition and an offer price, computer readable program code means for determining a seller price for said product; computer readable program code means for determining a total transaction profit as a function of the difference between said offer price and said seller price, computer readable program code means for determining a buyer discount, computer readable program code means for processing said conditional purchase offer to effect the purchase of said product; and computer readable program code means for returning said buyer discount to said buyer
24 A computer program product comprising a computer usable medium having computer readable program code means embodied in said medium for processing a sale of a product, said computer program product including: computer readable program code means for receiving from a buyer a conditional purchase offer for said product, said conditional purchase offer including at least one buyer-defined variable condition, an offer price, a payment identifier, and authorization to use said payment identifier to pay said offer price, computer readable program code means for determining a seller price for said product, computer readable program code means for determining a total transaction profit as a function of the difference between said offer price and said seller price, computer readable program code means for determining a buyer discount, computer readable program code means for processing said conditional purchase offer to effect the purchase of said product, and computer readable program code means for returning said buyer discount to said buyer
PCT/US1999/028648 1998-12-04 1999-12-03 Customer profit sharing conditional purchase offer (cpo) management system WO2000034841A3 (en)

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US09/205,666 1998-12-04

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US7146330B1 (en) 1999-02-08 2006-12-05 Vulcan Portals, Inc. Method and system for creating and managing groups for increasing buying power on the world wide web
US6631356B1 (en) 1999-03-15 2003-10-07 Vulcan Portals, Inc. Demand aggregation through online buying groups
US6604089B1 (en) 1999-03-15 2003-08-05 Vulcan, Inc. Demand aggregation through online buying group
US7194427B1 (en) 1999-03-31 2007-03-20 Vulcan Portals, Inc. On-line group-buying sale with increased value system and method
US7107230B1 (en) 1999-03-31 2006-09-12 Vulcan Portals, Inc. Dynamic market equilibrium management system, process and article of manufacture
US6934690B1 (en) 1999-07-06 2005-08-23 Vulcan Portals, Inc. System and method for extension of group buying throughout the internet
US7480627B1 (en) 1999-07-06 2009-01-20 Vulcan Portals, Inc. System and method for extension of group buying throughout the internet
US8639580B1 (en) 1999-07-06 2014-01-28 Intellectual Ventures Holding 79 Llc System and method for extension of group buying throughout the internet
US6993503B1 (en) * 2000-01-28 2006-01-31 Priceline.Com Incorporated System and method for allocating a conditional purchase offer for a travel related services reservation to one of a plurality of entities in a buyer driven electronic commerce system
US7263498B1 (en) 2000-05-23 2007-08-28 Vulcan Portals, Inc. Attaining product inventory groupings for sales in a group-buying environment
US8489466B1 (en) 2000-06-19 2013-07-16 Intellectual Ventures Holding 79 Llc System and method for enhancing buyer and seller interaction during a group-buying sale
US7363246B1 (en) 2000-06-19 2008-04-22 Vulcan Portals, Inc. System and method for enhancing buyer and seller interaction during a group-buying sale
US8676664B2 (en) 2000-06-19 2014-03-18 Intellectual Ventures Holding 79 Llc System and method for enhancing buyer and seller interaction during a group-buying sale
US8712864B2 (en) 2000-06-19 2014-04-29 Intellectual Ventures Holding 79 Llc System and method for enhancing buyer and seller interaction during a group-buying sale

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