Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Electronic shopping
Reexamination Certificate
1999-03-15
2003-10-07
Coggins, Wynn (Department: 2761)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Electronic shopping
C705S027200
Reexamination Certificate
active
06631356
ABSTRACT:
BACKGROUND OF THE INVENTION
1. Field of the Invention
The present invention relates to demand aggregation for goods and services and the computerized operation of global buying groups conducted over electronic networks such as the Internet.
2. Introduction to the Invention
This invention provides a method and apparatus to globally locate, encourage and enable all buyers wishing to purchase a particular product or service within a given time frame to join forces in a buying group (“co-op”) formed specifically to accomplish the desired purchase. The co-op will enable individual buyers to leverage their combined purchasing power to achieve an economic bargain far superior to that attainable by any one buyer acting alone. This superior bargain most often will be reflected in terms of a lower price.
The invention also provides a method and apparatus that allows each buyer an opportunity to increase the volume of any given co-op in order to further increase group buying power within a co-op. It also includes a mechanism through which buyers can form any number of special interest groups, provide their collective wisdom to dictate which products are featured in future co-ops, or even make a market for a given product or service.
Other key aspects of the invention include a means to allow unprecedented access to certain market and pricing information derived from co-op member input during the life of each co-op. For example, all buyers wishing to join a co-op must submit a binding offer guaranteeing their willingness to purchase the featured item at or below some maximum price determined by each individual member. This collection of purchase offers provides valuable quantitative data regarding price sensitivity for the featured item. In addition, it permits real time yield management decisions that often will benefit both buyers and suppliers. Specifically, the invention provides data from which a supplier can be informed that if the product price is reduced by a specified amount, the co-op's pool of accepted offers-i.e., final sales-will increase by a specific quantity. The guaranteed increase in volume due to a reduced price would improve its overall yield. Under this scenario, both the co-op buyers and the product supplier benefit from the indicated price reduction.
Other ways in which this invention provides unique benefits to buyers and suppliers of goods and services in electronic commerce are set forth in various parts of this document below.
3. Background (Prior art)
Buyer Problems to be Solved by the Invention
The vast majority of retail methods of commerce do not permit any give and take between buyer and seller regarding terms of purchase. Instead they employ a seller- controlled format whereby the seller determines which items are to be offered for sale, when each item will be offered for sale, and the non-negotiable fixed price at which each item will be sold. Traditional stores (including most on-line stores), catalog sales, telemarketing sales, and classified ads all represent examples of this prevalent seller-controlled sales environment.
While the auction sales format permits buyer interaction, it too vests most of the bargaining power in the seller by permitting him or her to select the item to be sold and the time at which it will be offered for sale. Auctions also typically permit the seller to specify a minimum price at which the item may be sold. Moreover, the auction model further deteriorates the power of each individual buyer by pitting him or her against similarly situated buyers, all competing to pay the highest price for the item.
Historically, individual buyers have sought to achieve collective buying power, among other things, by joining a traditional, true “co-op”—i.e., an organization that is actually owned by and operated for the benefit of those using its services. Such organizations usually are comprised of individual members with common business, occupational. or recreational interests. Members of these tine co-ops pay annual membership fees (typically sufficient to cover the operating costs of the co-op entity) for the privileges of membership, which often include access to information, products and services related to the co-op's defined purpose.
Traditional buying co-ops (including those emerging on the Internet up to the date of this invention) have been organized around a common set of interests much broader than a particular product (e.g., a digital camera), or even a narrowly defined product category (e.g., cameras). As a result, the extent to which they can aggregate demand for any given product or service is limited by the organization's defined membership base and topical focus. Historically, this breadth of member commonality was required. Otherwise, the benefits achieved through the co-op would be vastly outweighed by the amount of time, money and energy expended to join and maintain the membership.
At the time of this invention, buying groups organized globally on a purchase by purchase basis do not exist. In addition, there is no single mechanism though which people can quickly and conveniently create or join any special interest group of their choosing for purchasing products through a global electronic network such as the Internet.
Supplier Problems to be Solved by the Invention
Traditionally, market data regarding the price buyers are willing to pay for a given product or service has been derived primarily from actual sales data. These estimates fail to capture data regarding instances in which sales were rejected by those deciding not to buy the given product. Obviously, the universe of buyers seriously considering purchasing a new flat screen TV includes not only those who will decide to purchase the item, but any number of people who will conclude the current unilaterally fixed price for the item is too high. Under traditional sales models, there is no practical way to capture the number of potential buyers who rejected the sale based on price. Moreover, there is no way to capture the actual price point at which the potential buyer would have purchased the item. If an invention were to permit access to this data globally for a large pool of potential buyers, the invention would be extremely valuable to suppliers of goods and services in that it would permit better pricing, yield management and marketing decisions.
Further, historically there has been no way for a supplier to predict with certainty the price at which a product must be sold in order to increase sales volume by a specified amount. Under traditional sales models, pricing decisions are made based on estimates, such as anticipated product demand and presumed price sensitivity, in the hope that supply will approximate demand at the selected price. If a supplier of a particular item could rely on guaranteed purchase offers to increase volume at varying levels of acceptable sales prices, such information would be extremely valuable to the supplier. Among other things, it would permit instantaneous, accurate yield management decisions that often would encourage win-win price reductions. The supplier wins by improving his overall yield based on volume, and the buyer wins by getting a lower per unit price.
Further, existing sales models do not offer suppliers a clearly superior means of quickly reducing large quantities of specific product inventory (such as a close out item) in a way that will permit both maximization of yield and fast movement of an extremely large quantity of product. Similarly, there exists no clearly superior sales channel through which a supplier can readily turn to swiftly create an extremely large, global market for a specific product such that the supplier's market share for that product literally could substantially increase overnight.
Finally, access to the larger interest groups enabled by this invention present a superior forum for marketing and testing products and services of interest to the membership of a given group. Such activities may be limited to those which are deemed by any given group to be of mutual beneficial t
Gustafsson Niklas
Van Horn Tom
Woodford Dale
Coggins Wynn
Fenwick & West LLP
Thompson Forest
Vulcan Portals Inc.
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