WO2014113837A1

WO2014113837A1 - An auction method and system

Info

Publication number: WO2014113837A1
Application number: PCT/AU2014/000009
Authority: WO
Inventors: Adrian MCCULLAGH
Original assignee: Odmob Pty Ltd
Priority date: 2013-01-25
Filing date: 2014-01-08
Publication date: 2014-07-31

Abstract

An auction method including the steps of receiving, at a server, item details of an item for auctioning from a retailer, the item details including an item price; setting, at the server, a minimum reserve price and a maximum reserve price wherein the minimum reserve price and the maximum reserve price are both less than the item price; determining, at the server, a reserve amount wherein the reserve amount is set randomly between the minimum reserve price and the maximum reserve price; setting, at the server, a current value of the item to less than or equal to the item price before any bids are received; receiving, at the server, a bid for the item from a participant; reducing, at the server, the current value by a bid amount, wherein the bid amount is set by a managing entity; charging, at the server, the participant a bid cost wherein the bid cost is equal to or higher than the bid value; and determining, at the server, a winning participant when the current value is first reduced to an amount equal to or below the reserve amount.

Description

TITLE

AN AUCTION METHOD AND SYSTEM

FIELD OF THE INVENTION

This invention relates generally to an auction method and system, and in particular to an on-line descending auction method and system.

BACKGROUND OF THE INVENTION

The Internet is widely used to sell goods and services using either auction websites or more traditionally, by posting an advertisement on a website.

Many Internet auction sites have been developed where the successful bidder of the auction buys an item at a fraction of the retail price, in some cases between 80% and 90% off the recommended retail price. In one such auction, a price of the item starts at zero, and each bid placed raises the price by a fixed amount, for example in 1 cent increments. However a cost to place a bid, for example 50 cents, is higher than the value of the bid. Like a traditional on-line auction, the auction ends after a predefined period of time or there is only one bidder remaining, and the last bid exceeds a set reserve (if a reserve has been set). Where the cost to place a bid is higher than the value of the bid, fewer bids are required to cover the cost of the relevant goods/services which are the subject matter of the auction, and thereby make a profit on the item.

In an example of a descending auction, the lowest unique bid wins the item at the end of the auction. For example, if 2 users bid 1 cent, 5 users bid 2 cents, 4 users bid 3 cents and only one user bids 4 cents, the user that bid 4 cents wins the item at the end of the auction.

In another descending auction, a reserve price is set randomly between 45% and 55% of a retail price of a house being sold. Once a certain number of bidders have registered for the auction, the registered bidders are notified of the auction. The starting price is set to half of the value of the house, and the successful bidder is the first participant to bid the highest price below the random reserve price.

Finally, in one variation of an ascending auction, a reserve price is randomly determined and the first bidder to bid over the reserve price wins the item.

However, there is an opportunity for an improved auction method and system, to bring more excitement and anticipation to on-line auctions.

The reference to any prior art in this specification is not, and should not be taken as, an acknowledgement or any form of suggestion that the prior art forms part of the common general knowledge in Australia or elsewhere.

OBJECT OF THE INVENTION

It is an object of some embodiments of the present invention to provide consumers with improvements and advantages over the above described prior art, and/or overcome and alleviate one or more of the above described disadvantages of the prior art, and/or provide a useful commercial choice.

SUMMARY OF THE INVENTION

In one form, although not necessarily the only or broadest form, the invention resides in an auction method including the steps of:

receiving, at a server, item details of an item for auctioning from a retailer, the item details including an item price;

setting, at the server, a minimum reserve price and a maxirinum reserve price wherein the minimum reserve price and the maximum reserve price are both less than the item price;

determining, at the server, a reserve amount wherein the reserve amount is set randomly between the minimum reserve price and the maximum reserve price;

setting, at the server, a current value of the item to less than or equal to the item price before any bids are received;

receiving, at the server, a bid for the item from a participant; reducing, at the server, the current value by a bid amount, wherein the bid amount is set by a managing entity;

charging, at the server, the participant a bid cost wherein the bid cost is equal to or higher than the bid value; and

determining, at the server, a winning participant when the current value is first reduced to an amount equal to or below the reserve amount.

In another form, the invention resides in an auction system including: a server connected to the internet, the server including:

a memory coupled to a processor, wherein the memory includes computer readable program code components are configured to cause the processor to:

receive item details of an item for auctioning from a retailer, the item details including an item price;

set a minimum reserve price and a maximum reserve price wherein the minimum reserve price and the maximum reserve price are less than the item price;

determine a reserve amount wherein the reserve amount is set randomly between the minimum reserve price and the maximum reserve price;

set a current value of the item to less than or equal to the item price before any bids are received;

receive a bid for the item from a bid participant;

reduce the current value of the item by a bid amount, wherein the bid amount is set by a managing entity;

charge the participant a bid cost wherein the bid cost is higher than the bid value; and

determine a winning participant when the current value of the item is first reduced to an amount equal to or below the reserve amount.

Preferably, the item price includes a retailer discount price and a recommended retail price wherein the retailer discount price is less than the recommended retail price.

Suitably, the bid cost varies depending on a stage of the auction. The bid cost may increase as the current value of the item decreases and approaches the reserve amount.

In some embodiments, the maximum reserve price is 5% of the recommended retail price, and the minimum reserve price is 1 % of the recommended retail price.

Preferably, the current value is published to all users visiting an auction website until a current value publication time from the start of the auction has been reached. Thereafter the current value is only published to participants. Preferably, the current value publication time is determined randomly by the server between a minimum current value publication time and a maximum current value publication time. In some embodiments, the minimum current value publication time is 4 hours after the start of the auction, and the maximum current value publication time is 6 hours after the start of the auction.

Suitably, the reserve amount is also concealed from the participants, until a reserve publication time from the start of the auction has been reached. Preferably, the reserve publication time is determined randomly by the server between a minimum reserve publication time and a maximum reserve publication time. In some embodiments, the minimum reserve publication time is 18 hours after the start of the auction, and the maximum publication time is 22 hours after the start of the auction.

Suitably, the participant may configure an avatar which is displayed to other participants when a bid is placed.

Preferably, a duration of the auction is limited, for example 24 hours. The auction may include a maximum number of participants. Suitably, the number of participants is limited to 250.

BRIEF DESCRIPTION OF THE DRAWINGS

An embodiment of the invention will be described with reference to the accompany drawings in which:

FIG. 1 is a block diagram illustrating an auction system according to an embodiment of the present invention; 09

5

FIG 2 is a flow diagram illustrating an auction method according to an embodiment of the present invention;

FIG 3 is a screenshot of a home page according to an embodiment of the present invention;

FIG 4 is a screenshot of a start page according to an embodiment of the present invention; and

FIG 5 is a screenshot of a bid page according to an embodiment of the present invention. DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT

Elements of the invention are illustrated in concise outline form in the drawings, showing only those specific details that are necessary to understanding the embodiments of the present invention, but so as not to clutter the disclosure with excessive detail that will be obvious to those of ordinary skill in the art in light of the present description.

In this patent specification, adjectives such as first and second, left and right, front and back, top and bottom, etc., are used solely to define one element from another element without necessarily requiring a specific relative position or sequence that is described by the adjectives. Words such as "comprises" or "includes" are not used to define an exclusive set of elements or method steps. Rather, such words merely define a minimum set of elements or method steps included in a particular embodiment of the present invention. It will be appreciated that the invention may be implemented in a variety of ways, and that this description is given by way of example only.

FIG. 1 is a block diagram showing an auction system 100, according to some embodiments of the present invention. A computer in the form of a server 120 is connected to the internet 110, to which users, such as a participant 130, a retailer 140, and a managing entity 150 have access. The users may access the server 120 using a web browser installed on a computer or a smartphone, or using an application installed on a smartphone or any other similar devices such as tablet computers and netbook computers. However the present invention is not limited to use on such devices.

The server 120 includes a memory coupled to a processor, and the memory includes computer readable program code components. The program code components are in the form of software installed on a computer readable medium, for example on a hard disk, a random access memory (RAM), or any other applicable computer readable medium. The program code components cause the processor to perform the method of the present invention.

The present invention is an on-line descending auction website which is administered by the managing entity 150. Items for sale are listed on the website by retailers 140, and are bid on by participants 130. A current value of the item at the start of the auction is set by the retailer 140 to an amount below an item price. The item price may be a recommended retail price or a retailer discount price. In a preferred embodiment, the current value of the item at the start of the auction is equal to the retailer discount price. A reserve amount of the item is set randomly between a maximum reserve price and a minimum reserve price, and is unknown to any of the participants 130, the retailers 140 and the managing entity 150. In one embodiment the maximum reserve price and the minimum reserve price are set to 5% and 1% of the recommended retail price respectively.

Each bid placed by a participant 130 reduces the current value of the item by a bid value, which is fixed by the managing entity 150. For each bid the participant 30 places, the participant 130 is charged a bid cost, where the bid cost is higher than the bid value. A first participant 130 that places the bid that reduces the current value of the item to equal or below the reserve amount is deemed the successful bidder of the item at that reserve amount, and pays the managing entity 150. The managing entity 150 pays the retailer 140 the retailer discount price for the item. In one embodiment, the item is shipped to the participant 130 from the retailer 140 or the successful bidder may collect the item from the retailer directly. Thus the managing entity 150 does not need to be concerned with handling stock. Furthermore, as the current value descends and approaches the random reserve price excitement and anticipation are heightened for the participant. This is further enhanced by publishing to all participants avatars of the last four participants who have submitted a bid via the server 120.

The operation of the present invention on the server 120 may be explained with reference FIG 2. FIG 2 shows a flow diagram of a method of performing an on-line auction according to an embodiment of the present invention. At step 201 , the server 120 receives item details of an item for auctioning from the retailer 140, the item details including a an item price.

At step 202, the server 120 determines a minimum reserve price and a maximum reserve price wherein the minimum reserve price and the maximum reserve price are less than the item price. At step 203 the server 120 sets a reserve amount wherein the reserve amount is set randomly between the minimum reserve price and the maximum reserve price.

At step 204, the server 120 sets a current value of the item equal to, or below the item price. At step 205 the server 120 receives a bid for the item from a participant 130, and at step 206, the server 120 reduces the current value of the item by a bid value, wherein the bid value is fixed by the managing entity 150.

At step 207, the server 120 charges the participant a bid cost wherein the bid cost is higher than the bid value. Finally at step 208, the server 120 determines a successful participant when a bid causes the current value of the item to be less than or equal to the reserve amount. If a bid does not reduce the price of the item to be less than or equal to the reserve amount, like a traditional auction, the auction continues and further bids are received from other participants 130 until the reserve amount is equalled or surpassed. Alternatively, the auction ends after a set period of time if the reserve amount is not reached, for example the auction may end after 24 hours. However, it should be appreciated that any suitable period of time may be used.

In order to bid, users may access the system 100 via a web page. FIG 3 shows a screenshot 300 of a home page according to an embodiment of the present invention. As shown in FIG 3, the home page may include a scrolling list 310 of items currently being auctioned. The scrolling list 310 may include item details such as an image of a product, a model number, a recommended retailer's price (RRP), a retailer's discount price, a current bid price, a time left for the auction, the maximum reserve price, and the minimum reserve price. In addition, the home page allows users to login to the system 100, by providing a user name and password, or to register to use the system 100.

In order to use the system 100, a retailer 140 may log in by providing a user name and password . If the retailer 140 has not registered , the retailer 140 may be prompted to register by providing retailer details such as a retailer name, a company number, an address, contact details and bank account details. Once entered, the retailer details are stored in a database on the server 120. Once the relevant information has been submitted, for security reasons, the retailer 140 may receive a user name and password via a SMS, or an email for example. The retailer details are then stored in a secure database on the server 120.

Once the retailer 140 has registered, the retailer 140 may upload item, or manually enter, item details of items it has for sale. The item details may be uploaded individually or in bulk to the server 120 using an xml file or spreadsheet for example. The item details may include, a description, a model number, a serial number of each product, an image of the product, a Recommended Retail Price (RRP), a Retailer Discount Price (RDP), a start price, and start and finish times of the auction.

Similarly, in order to use the system 100, a participant 30 may log in with a user name and password using a web browser for example installed on a computer. If the participant 130 has not registered the participant 130 may register by providing participant details such as, but not limited to, a name, an address, a date of birth, a preferred language of the website, and payment details such as a credit card number.

In one embodiment, the participant details may include an avatar. The avatar may be selected from a library of avatars and naming options. Alternatively, the participant 130 may create a new avatar. Each time the participant 130 places a bid, the avatar may be displayed together with bid details. The use of avatars may give the feeling of a face to face auction even although the auction is conducted over the Internet. This may promote "auction fever" and encourage participants 130 to bid even although they are not likely to be the ultimate successful bidder.

Once the relevant information has been submitted, the participant 130 may receive a user name and password via a SMS, or an email for example. The participant details are then stored in a secure database on the server 120.

Once logged in, the participant 130 may be directed to a start page. FIG 4 shows a screenshot 400 of a start page according to an embodiment of the present invention. The start page shows a list of current auctions 4 0 the participant 130 has registered for, a list of available auctions arranged into categories 420 of items, and a search box 430. The list of current auctions 410 may detail a lot number, a description of the items and a current bid.

In one embodiment, the participant may only bid on auctions where the retailer 140 is located in the same country as a residential address of the participant. Thus only auctions with retailers within the same jurisdiction are displayed, by the server 120, to the participant 130 on the website. This allows all transactions to be governed by local laws for both the participant 130 and the retailer 140, and any disputes can be handled within the same jurisdiction. In addition, a language the website is defaulted to the official language of the country, or a language selected by the participant when registering.

In order to search for an item to bid on, the participant 130 may select from the plurality of categories 420, or enter a search term into a search field 430. The participant 130 may put any suitable term into the search field 430 in order to identify a particular item, such as a product type, a manufacturer name, or a model number.

Once the search terms have been entered, a list of results may be displayed to the participant of available auctions. The list may also include an image of the product being auctioned, or any other suitable item details of the products being auctioned.

In order to bid, the participant 130 selects an item of interest by clicking on the item from the list of current auctions 410, and the participant is directed to a bid page. FIG 5 shows a screenshot 500 of a bid page according to an embodiment of the present invention. As shown in FtG 5, in one embodiment, the bid page shows product details and price details. The product details may include an auction number 510, a product number 5 2, a product name 514 and an image 516 of the product. The price details may include a recommended retail price 520, and a retailer discount price 522, together with recent bids 524 including a current value 526. The retailer discount price 522 may be a discounted price that may be offered to participants 140 if unsuccessful in the auction.

The bid page may show further details such as a start time 530, a finish time 532 and a remaining time of the auction 534, together a maximum reserve price 540 and a minimum reserve price 542, which, as previously mentioned, are set, in one embodiment, between 5% and 1% of the retail discount price. However the actual reserve price is hidden or kept secret from any user, which is randomly set by the server 120. By hiding the reserve price from any user assists in preventing fraud, and increases excitement and anticipation of the participants 130.

In order to place a bid on the item, the participant 130 clicks on a place bid button 550. The current value is then reduced by the bid value, and the bid cost is charged to the participant 30. For example, the bid cost may be charged to the participant's credit card at the end of the auction, or the participant 130 may add funds to a float, and bid cost is deducted from the float.

In one embodiment, each bid received from a participant 130 is time stamped, thus the server 120 may apply each bid based on a time the bid was placed. In addition, the server 120 may take into account a latency of a network, and any other considerations, to ensure that the bids are queued in order of the time the bid was placed, where earliest bids are placed first. This may be important towards an end of the auction.

In one example, a recommended retail price of a television may be $1000, and the retailer selling price may be $900. Thus the current value may start at a retailer discount price of $850. In one embodiment, the reserve amount is randomly set between 1 % and 5% of the recommended retail price. Taking the example of the television above having a recommended retail price of $1000, 1 % of $1000 is $10, and 5% of $1000 is $50. Thus the reserve price is set randomly between $10 and $50, for example $22. During the auction, the first participant who places the bid that reduces the price to $22 or less is the successful bidder for the item. Losing participants may be given the opportunity to buy the items at the retailer discount price. Although the random reserve price is related to the recommended retail price, it should be appreciated that the reserve price may be related to the retail normal price, the retailer discount price, or any other suitable method.

In a variation of the invention, the bid cost may vary depending on a stage of the auction. In this embodiment, the bid cost increases as the current value decreases. For example, when the current value of the item is between 100% and 51 % of the recommended retail price, the bid cost is 1.25 multiplied by the bid value; when the price of the item is between 50% and 26% of the cost of the bid is 1.5 multiplied by the bid value, and when the current price of the item is between 25% and of the reserve price, the cost of a bid is 1.75 multiplied by the bid value. Although three stages are described, it should be appreciated that any number of stages may be factored into the auction. Furthermore, in order to entice bidders, the bid cost may be equal to or less than the bid value during the early stages of an auction. In addition, the bid cost may increase above the 1.75 times the bid value as the current value falls below 25% of the recommended retail price.

In one embodiment of the invention, the current value of the item is published by the server 120 to all users accessing the website up to a current value publication time. After the current value publication time, the current value is concealed by the server 120 from all users apart from the participants 130. That is, only participants 130 are able to view the current value after the current value publication time. The current value publication time may be randomly determined by the server 120 between a minimum current value publication time and a maximum current value publication time using a random number generator. In one embodiment, the minimum current value publication time is 4 hours, and the maximum current value publication time is 6 hours. However it should be appreciated that any suitable time frame may be used. For example, the current value publication time may be randomly determined to be 4 hours 25 minutes 37 seconds. In another example the current value publication time may be randomly determined to be 5 hours 15 minutes 2 seconds. However it should be appreciated that any other suitable times may be used. The advantage here is that the current value publication time for each auction will be determined randomly but will always fall within 4 and 6 hours after the start of the relevant auction. Once the current value publication time has passed then only those participants who have made a prior bid (Bid Participants) will be able to continuously view the latest bids and monitor the auction progress.

In yet another embodiment the reserve amount may also be concealed from the participants 130 until a reserve publication time, and provided the auction is still in progress. The reserve publication time is randomly set between a minimum reserve publication time and a maximum reserve publication time. For example the minimum reserve publication time may be 18 hours from the start of the auction, and the maximum reserve publication time may be 22 hours from the start of the auction. Similar to the current value publication time, the reserve publication time may be randomly determined by the server 120 using a random number generator. For example, for auction "A" the reserve publication time may be 19 hours, 23 minutes 54 seconds from the start of the auction, and the reserve publication time for auction "B" may be 21 hours, 3 minutes 37 seconds. The benefit of the publishing of the reserve amount nearing the end of the auction is to encourage participants 130 to submit bids knowing that they are near to the reserve amount. That is, the participants 130 know that they are close to submitting a successful bid.

In another embodiment, the number of participants 130 is limited. For example, the number of participants 130 may be limited to a maximum of 250. This encourages participants 130 to enrol quickly to avoid disappointment. Since the auction is a descending value auction it is in the interest of every participant 130 to encourage other users to participate in an auction so as to reduce the current value quickly and reach the reserve amount. _y

In a preferred embodiment, the duration of the auction is fixed, for example 24 hours, thus each participant 130 in each jurisdiction will have time to participate in an auction each day. The auction may start at 8 pm each day and will continue for the lesser of 24 hours or the time at which the current value is less than or equal to reserve amount. Since it is possible for the auction to finish in less than 24 hours each participant 130 may activate an automated bid process to make bids on a participant's behalf. Thereby, a participant 130 may submit a bid even although they may be asleep or otherwise detained or away from the participant's computer. In addition, each participant 130 may set pre-instructions to the automated bid process and continue with bidding if the auction reaches the latter stages whilst they are asleep.

The present invention provides a system for bidding for goods and services. In summary, some advantages of the present invention include:

1) A winning participant may buy an item for a fraction of the recommended retail price;

2) Participants are encouraged to make subsequent bids in order to drive the price of the item lower towards the hidden reserve amount;

3) Having a hidden reserve amount helps to reduce fraudulent activities;

4) By varying the bid cost based on the stage of the auction encourages bidding when the price is higher;

5) The managing entity does not need to hold any stock, as all transactions are between the participant and the retailer;

6) The managing entity will purchase the item for and on behalf of the winning bid participant;

7) As all transactions are between a participant and a retailer in the same jurisdiction, the same laws are applicable to the participant and the retailer, making disputes easier to resolve;

8) As all transactions are between a participant and a retailer in the same jurisdiction all value added taxes can be collected within the jurisdiction by the relevant taxing authority; and

9) The use of avatars adds an element of fun to the auction as well as making the auction more personal and thus the possibility of auction fever being established.

The above description of various embodiments of the present invention is provided for purposes of description to one of ordinary skill in the related art. It is not intended to be exhaustive or to limit the invention to a single disclosed embodiment. As mentioned above, numerous alternatives and variations to the present invention will be apparent to those skilled in the art of the above teaching. Accordingly, while some alternative embodiments have been discussed specifically, other embodiments will be apparent or relatively easily developed by those of ordinary skill in the art. Accordingly, this patent specification is intended to embrace all alternatives, modifications and variations of the present invention that have been discussed herein, and other embodiments that fall within the spirit and scope of the above described invention.

Claims

1. An auction method including the steps of:

setting, at the server, a minimum reserve price and a maximum reserve price wherein the minimum reserve price and the maximum reserve price are both less than the item price;

receiving, at the server, a bid for the item from a participant;

reducing, at the server, the current value by a bid amount, wherein the bid amount is set by a managing entity;

2. The method of claim 1 wherein the server varies the bid cost depending on a stage of the auction.

3. The method of claim 2 wherein the server increases the bid cost as the current value of the item decreases and approaches the reserve amount.

4. The method of claim 1 wherein the maximum reserve price is 5% of the recommended retail price, and the minimum reserve price is 1% of the recommended retail price.

5. The method of claim 1 wherein the current value is published by the server to all users visiting an auction website until a current value publication time from the start of the auction has been reached, wherein after the current value publication time the current value is only published by the server to participants.

6. The method of claim 4 wherein the current value publication time is determined randomly by the server between a minimum current value publication time and a maximum current value publication time.

7. The method of claim 1 wherein the reserve amount is concealed by the server from the participants, until a reserve publication time from the start of the auction has been reached.

8. The method of claim 7 wherein the reserve publication time is determined randomly by the server between a minimum reserve publication time and a maximum reserve publication time.

9. The method of claim 1 wherein a duration of the auction is limited.

10. The method of claim 1 wherein the auction includes a maximum number of participants.

11. An auction system including:

a server connected to the internet, the server including:

a memory coupled to a processor, wherein the memory includes computer readable program code components configured to cause the processor to:

set a current value of the item to less than or equal to the retailer discount price before any bids are received;

receive a bid for the item from a bid participant;

12. The system of claim 11 wherein the program code components are further configured to cause the processor to vary the bid cost depending on a stage of the auction.

13. The system of claim 12 wherein the program code components are further configured to cause the processor to increase the bid cost as the current value of the item decreases and approaches the reserve amount.

14. The system of claim 11 wherein the maximum reserve price is 5% of the recommended retail price, and the minimum reserve price is 1 % of the recommended retail price.

15. The system of claim 11 wherein the program code components are further configured to cause the processor to publish the current value to all users visiting an auction website until a current value publication time from the start of the auction has been reached, wherein after the current value publication time the current value is only published to participants.

16. The system of claim 4 wherein the program code components are further configured to cause the processor to determine the current value publication time randomly between a minimum current value publication time and a maximum current value publication time.

17. The system of claim 11 wherein the program code components are further configured to cause the processor to conceal the reserve amount is from the participants, until a reserve publication time from the start of the auction has been reached. r

18. The system of claim 17 wherein the program code components are further configured to cause the processor to determine the reserve publication time randomly between a minimum reserve publication time and a maximum reserve publication time.

19. The system of claim 1 wherein the program code components are further configured to cause the processor to limit a duration of the auction.

20. The system of claim 11 wherein the program code components are further configured to cause the processor to limit a number of participants.