AU2006202859A1 - Auction system and method - Google Patents

Description

AUSTRALIA

PATENTS ACT 1990 COMPLETE SPECIFICATION NAME OF APPLICANT(S):: Betterdeal Pty Ltd ADDRESS FOR SERVICE: DAVIES COLLISON CAVE Patent Attorneys 255 Elizabeth Street, Sydney, New South Wales, Australia, 2000 INVENTION TITLE: Auction system and method The following statement is a full description of this invention, including the best method of performing it known to me/us:- 5102 N AUCTION SYSTEM AND METHOD Background of the Invention The present invention relates to a method and apparatus for auctioning articles, and in particular to a method and apparatus for auctioning vehicles using a reverse auction.

oO 00 (N Description of the Prior Art ID The reference in this specification to any prior publication (or information derived from it), or to any matter which is known, is not, and should not be taken as an acknowledgment or admission or any form of suggestion that the prior publication (or information derived from it) or known matter forms part of the common general knowledge in the field of endeavour to which this specification relates.

Typically vehicle sales are achieved in a number of different manners. Vehicles may be sold by dealers, in which case, an individual wishing to purchase the vehicle will generally visit a dealer's premises to view vehicles. Following this the purchaser will negotiate a price with the dealer which may involve taking into account trade-in of the individuals existing vehicle.

This typically requires that individuals travel to a number of different dealers in order to negotiate the best deal. In addition to this, dealers are limited in the number of customers they attract and hence the number of sales made. It is apparent from this, that the use of sales through dealer premises is only open to limited competition which typically results in higher prices for the purchaser.

Other sales techniques involve the use of auctions in which potential purchasers bid against each other in order to purchase the vehicle. Such a process places individuals in competition for the same vehicle again driving up the price. In addition to this, sellers are limited in what they can charge based on the bid made.

Vehicles are also sold through the use of classified advertising in which vehicles are offered at a price with purchasers making an offer and the seller deciding whether to accept the offer.

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C Summary of the Present Invention In a first broad form the present invention provides a method of performing a transaction, the method including, in a processing system: a) determining a vehicle selected by a purchaser; S b) generating auction data representing an auction of the selected vehicle; 00oO c) performing an auction by: i) causing details of at least one auction to be displayed to at least one dealer; and, INO ii) receiving bids from at least one dealer; d) determining a successful bid; and, e) causing a transaction to be performed between the purchaser and a dealer based on the successful bid.

Typically the method includes, in the processing system: a) determining a auction start price; and, b) causing the transaction to be performed at the auction start price or below.

Typically the auction start price is below the recommended retail price.

Typically the method includes, in the processing system: a) determining purchaser details indicative of the identity of the purchaser; b) determining dealer details indicative of the dealer providing the successful bid; and, c) providing the dealer details to the user, and the user details to the dealer to thereby allowing the transaction to be performed.

Typically the method includes, in the processing system: a) allowing a purchaser to review details of a number of available vehicle, the details including at least one of: i) vehicle manufacturer; ii) vehicle model; iii) vehicle type; iv) vehicle engine power; v) vehicle features; vi) optional extras; c vii)warranties; viii) vehicle colour; ix) a recommend retail price; x) a auction start price; xi) a vehicle photo; and, 00 xii)links to reviews or additional vehicle information; and, 00 b) allowing the purchaser to select a vehicle using the vehicle details.

Typically the method includes, in the processing system: C a) determining details of at least one vehicle; 3 b) transferring the details to an end station, the end station being responsive to display the details to the purchaser, thereby allowing the purchaser to select a vehicle; and, c) receiving an indication of the selected vehicle from the end station.

Typically the method includes, in the processing system, performing the auction after obtaining a payment from the purchaser.

Typically the method includes, in the processing system: a) receiving indicating data indicative of a dealer identity; b) determining, using the dealer identity, dealer details; c) determining, using the dealer details, auction details of at least one auction; and, d) transferring the auction details to a dealer end station, the dealer end station being responsive to display the details to the dealer, thereby allowing the dealer to bid on one or more auctions; e) receiving an indication of one or more bids from the dealer end station; and, f) updating the auction data in accordance with the determined one or more bids.

Typically the method includes, in the processing system, transferring an auction notification to the dealer end station, thereby notifying the dealer of one or more auctions to occur.

Typically the method includes, in the processing system: a) commencing the auction at an auction start time; and, b) at least one of: i) notifying one of more dealers of the auction prior to the auction start time; -4ii) notifying one of more dealers of the auction at a first time after the auction start Ztime; iii) excluding one or more dealers from the auction at a second time after the auction start time; and, iv) finishing the auction at a third time after the auction start time.

00 N, Typically the method includes, in the processing system, excluding dealers that have not i submitted a bid prior to the second time.

Typically the method includes, in the processing system: a) determining details of a trade-in vehicle; and, b) arranging to obtain one or more trade-in offers using the trade-in vehicle details.

Typically the method includes, in the processing system, obtaining the trade-in offers from at least one of: a) the dealer; and, b) a third party.

Typically the method includes, in the processing system, receiving the details of a trade-in vehicle from an end station.

Typically the method includes, in the processing system: a) determining transaction details; and, b) arranging to obtain one or more finance offers using the transaction details.

Typically the method includes, in the processing system, obtaining the finance offers from at least one of: a) the dealer; and, b) a third party.

In a second broad form the present invention provides apparatus for performing a transaction, the apparatus including a processing system for: a) determining a vehicle selected by a purchaser; b) generating auction data representing an auction of the selected vehicle; c) performing an auction by: i) causing details of at least one auction to be displayed to at least one dealer; and, Z ii) receiving bids from at least one dealer; d) determining a successful bid; and,

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e) causing a transaction to be performed between the purchaser and a dealer based on the 5 successful bid.

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00 S In a third broad form the present invention provides a method of performing a transaction, the iN method including, in a dealer end station: a) receiving auction details of at least one auction from a base station, the auction details iN including at least a current bid value; D b) determining a bid value below the current bid value; and, c) submitting the bid value to the base station, thereby causing the base station to update auction data in accordance with the bid value.

Typically the method includes, in the dealer end station: a) generating indicating data indicative of a dealer identity; b) transferring the indicating data to a base station, thereby allowing the base station to determine dealer details, and determine auction details, using the dealer details.

Typically the base station includes a processing system for performing the method of the first broad form of the invention.

In a fourth broad form the present invention provides apparatus for performing a transaction, the apparatus including a dealer end station for: a) receiving auction details of at least one auction from a base station, the auction details including at least a current bid value; b) determining a bid value below the current bid value; and, c) submitting the bid value to the base station, thereby causing the base station to update auction data in accordance with the bid value.

Typically the apparatus is used with apparatus according to the second broad form of the invention.

N, Brief Description of the Drawings Z An example of the present invention will now be described with reference to the accompanying drawings, in which: Figure 1 is a flow chart of an example of a process of selling a vehicle; 5 Figure 2 is a schematic of an example of apparatus for selling a vehicle; 00oO Figure 3 is a schematic of an example of the processing system of Figure 2;

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Figure 4 is a schematic of an example of the end station of Figure 2; O Figures 5A and 5B are a flowchart of an example of a process for commencing a vehicle auction; Sand, Figure 6A is a screen shot of an example of a web-page used for selecting a vehicle; Figure 6B is a screen shot of an example of a web-page used for selecting vehicle specifications; Figure 6C is a screen shot of an example of a web-page used for providing trade-in vehicle details; Figures 7A and 7B are a flowchart of an example of the bidding process; and, Figure 8 is a screen shot of an example of a web-page used in bidding.

Detailed Description of the Preferred Embodiments An example of a process of purchasing a vehicle will now be described with reference to Figure 1.

At step 100 a purchaser selects a vehicle for purchase with an indication of the selected vehicle being made available to eligible dealers at step 110. At step 120 the dealers review any current bids and then place bids at step 130. These bids are indicative of the price at which the dealer is willing to sell a new vehicle to the purchaser.

The bidding process is open for a predetermined time period, thereby allowing repeated bidding by the dealers. At the end of the time period the best bid is submitted to the purchaser at step 140. The purchaser can then provide details of any vehicle being sold with the dealer making optional trade-in offers at step 150. At step 160 the purchaser can chose whether or not accept the trade-in offer with the purchase being performed at step 170.

-7- S The overall process therefore provides a mechanism for reverse auctioning of vehicles. In contrast to traditional vehicle sales methods, this has a number of advantages. In particular, a auction start price system can be implemented thereby guaranteeing purchaser's a price at or

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below the auction start price. By having the auction start price set to a value below the recommended retail price of the vehicle, this ensures that the purchaser is able to obtain an S optimum purchase price.

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N From the perspective of dealers, this also includes a number of advantages. Firstly, it allows 0 the dealer to submit bids based on a price which will allow the dealer to make a sale. Dealers NI can opt to perform this at below cost price, so that whilst the dealer will make an initial loss D on the sale, this by can be used to ensure sales targets are met, as well as to allow additional after sales income thereby rendering a net profit. In addition to this, dealers can operate to sell over a wider geographical area than traditionally achievable by sales through premises at a set location.

A further feature of this system is that the dealer can attempt to recoup any loss on the sale price of the vehicle by offering a lower than traditional trade-in price for the purchaser's vehicle. However, in this case, the purchaser is provided with the option of refusing the trade-in offer.

In general the process may be performed utilising a network architecture, an example of which is shown in Figure 2. As shown in this example the architecture includes a base station 1 coupled to a number of end stations 3, and dealer stations 5, via communications networks 2, 4. The communications networks 2, 4 may be communications network such as the Internet, one or more Local Area Networks (LANs) one or more Wide Area Networks (WANs), Wireless Networks such as the GPRS Network, or the like. The base station 1 typically includes one or more processing system 10 coupled to a database 11.

In one example, the end stations 3, 5 are adapted to communicate with the base station 1, utilising appropriate communications techniques, thereby allowing bidding process to be coordinated by the base station 1. It will therefore be appreciated that the base station 1 and the end stations 3, 5 may be of any suitable form.

-8- C An example of a suitable processing system 10 is shown in Figure 4. As shown the processing system 10 includes a processor 20, a memory 21, an input/output device 22, such as a keyboard and display or the like, and an external interface 23, coupled together via a bus 24. In use the external interface 23 may be coupled to the database 11, as well as providing connections to the communications networks 2, 4.

00 S Accordingly, the processing system 10 may be any form of processing system, such as a computer server, a network server, a web server, a desktop computer, a lap-top or the like.

Alternative specialised hardware may be used.

Similarly, the end stations 3, 5 may be formed from a processor 30, a memory 31, an input/output device 32 and an external interface 33, coupled together via a bus 34. Again the external interface 33 may be used to provide a connection to the communications networks 2, 4.

Accordingly the end station 3 may be any form of computer system such as a desktop computer, lap-top, specialised hardware or the like.

In one example, the base station 1 and the end stations 3 communicate via the Internet 2, to allow a vehicle to be selected, with the dealers submitting bids using the end stations 5. This may therefore be achieved through the use of a suitable web-pages hosted by the base station 1.

In this case, a purchaser of the end station 3 will access a web-page presented by the base station 1, and select a vehicle for purchase. The dealer's then access web-pages presented by the base station I to commence bidding. Typically bidding is only possible for authorised dealers, and dealers therefore typically have to undergo an authentication procedure. This may be achieved using any one of a number of techniques, such as the use of certificates or the like, but will typically involve having the dealer submit a purchasername and password, or the like, which is then authenticated by the base station 1, in the normal way. Thus, it will be appreciated from this that the dealer will typically have to undergo a registration procedure before being able to obtain identifiers, and hence use the tracking system.

-9- In any event, once the dealer has been authorised, the base station 1 generates one or more web-pages which show details of auctions currently taking place. The dealer uses the webpage to monitor current bids and make bids.

It will be appreciated however that a wide range of architectures and communications tn 5 techniques may be used, and that the current example is for the purpose of illustration only.

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An example of the process will now be described in more detail with respect to Figure

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In this example, at step 200 the purchaser accesses a bid website using the end station 3.

Purchaser's may be required to undergo a registration procedure which may include the provision of a purchaser name and password to allow the purchaser to login to the site. This o may also involve collecting information regarding the purchaser to allow the purchaser's identity to be authenticated, thereby reducing the likelihood of individuals making fraudulent purchases. This can be achieved using standard techniques and will not therefore be described in any further detail.

At step 210 the base station supplies details of available vehicles. The details of the available details are typically stored in the database 11 and will include information such as: vehicle manufacturer; vehicle model; vehicle type; vehicle engine power; vehicle features; optional extras; warranties; vehicle colour; Sa recommend retail price; a auction start price; Sa vehicle photo; links to reviews or additional vehicle information; and, any other required information.

N The details of available vehicles may be obtained from dealers previously registered with the S site and therefore corresponds to a list of vehicles that can be sold by one or more registered dealers.

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In any event, at step 220 the purchaser reviews the vehicle details and selects a vehicle for purchase. This is typically achieved by allowing the purchaser to search the vehicle details in 00 S the database and view details of vehicles meeting certain criteria. This can include, for N example, viewing list of vehicles based on manufacturer, make, model, price or the like.

An example of a web-page suitable for this purpose is shown in Figure 6A. As shown, the different types of vehicle manufacturers are listed at 50. When a purchaser selects a respective manufacturer, details of available models are shown at 51, with each model having a link 52 which allows the purchaser to select the model for purchase.

Thus, the purchaser can then select a vehicle in the list and review additional details before making a selection. It will be appreciated that the purchaser may typically perform some initial research before selecting which vehicle to buy using the website. This may include visiting dealers premises to view vehicles, arranging a test drive, reviewing additional sources of information, such as critic reviews, or the like.

At step 230 the purchaser selects any further required specifications for the vehicle. This is typically achieved by displaying a web-page having a number of fields for displaying required selections 53, such as vehicle colour, and options extras 54, such as a sun-roof, air conditioning, or the like, as shown in Figure 6B.

At step 240, the purchaser submits details of any vehicle offered for trade-in, and again this is typically achieved by using a web page having a number of fields defining required information, as shown for example in Figure 6C.

At step 250, the purchaser submits payment details using the end station 3. The payment details are used to obtain a deposit from the purchaser. The deposit is typically a nonrefundable deposit which is taken to ensure that the purchaser is genuinely committed to purchasing a vehicle and is used to allow the base station operator make a profit and cover -11- C overheads. The deposit is based on a percentage of the saving based on the difference between a recommended retail price and an auction start price.

S The payment details may be supplied in any one of a number of manners and is typically achieved via secure website, such as a website provided by a financing institution, bank or tn 5 the like.

00 oO At step 250 the base station 1 verifies that payment will be provided, for example by

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INO contacting the financial institution, before operating to generate auction data at step 260. The auction data typically includes: Sa link to vehicle data defining the selected vehicle; o details of selected options; details of any trade-in vehicle; a current bid price; and, an auction time.

At step 280 the auction data is provided for display to eligible dealers. This is typically achieved by hosting the auction data on an appropriate part of the website, as will be described in more detail below.

At step 290 an indication that the auction is to occur is optionally provided to eligible dealers via the end station 5. This can include for example sending e-mails including details of auctions vehicles of interest to the dealer.

Once the auction has commenced, which is typically at the start of business hours on the day following the purchaser's selection of the vehicle, the base station 1 is able to receive bids from the dealers in a bidding process which will be described in further detail below.

At step 300 the processing system 10 operates to determine if a first time limit has been reached. If so, the base station 1 can send a reminder to dealers that have not yet submitted bids indicating that the auction is occurring and that a predetermined time remains in which bids can be accepted from a dealer.

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N At step 310 the processing system determines if a second time limit has been reached. Once this occurs the base station I will operate to exclude dealers that have not yet submitted a bid S from the auction.

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The above process has a number of impacts on the vehicle purchasing process.

OO 5 Firstly, by indicating a auction start price, this provides the purchaser with a guaranteed O maximum purchase price for the selected vehicle. This encourages individuals to use the site IND as they can be guaranteed purchasing a vehicle price at below the recommended retail price.

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The auction start price may be selected in anyone of a number of ways and this is typically achieved in accordance with a predetermined formula. This may include for example D subtracting a predetermined value from the recommended retail price or alternatively, selling the vehicle at the maximum of a proportion of the recommended retail price.

By having the user pay a non-refundable deposit at the start of the process, at step 330, this guarantees that at least some payment is obtained. In particular, if the purchaser enters the auction but subsequently decides not to purchase a vehicle, a deposit can be taken from the purchaser as recompense for the time and expense incurred by running the auction.

This in turn encourages the purchaser to only use the system if they are serious about buying a vehicle. As a result of this, this virtually guarantees the dealer that submits the best bid that they will make a sale. This vastly enhances the dealer's opportunity to obtain sales.

Thirdly, by placing a time limit on which bids can be submitted, this encourages the dealers to enter an auction at a relatively early stage. This encourages purchasers of the system as they see an early reduction in vehicle price. Additionally, dealers are provided with an indication of how many competing dealers there are for the sale at an early stage at the auction. This avoids late entrance to the auction and provides greater transparency to the overall auction process.

The bidding process will now be described in more detail with respect to Figures 7A to 7C.

At step 400, dealers access the website using the end station -13- C1 In this example, dealers are required to undergo a registration procedure in order to be able to sell vehicles through the system. The registration process will typically involve having an operator of the base station 1 collect information regarding the dealer including basic information such as name and address, as well as additional information such as the range of vehicles sold by the dealer. The dealer is then provided with a purchaser name and password 00 allowing access to the auction web-site. The manner in which this is achieved will be known

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to people skilled in the art.

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When the dealer logs in, using the purchaser name and password, the base station 1 uses this Ni to determine the dealers details at step 410. The base station I then uses the dealer details to determine relevant auctions from the auction data at step 420. This will typically include determining those vehicles sold by the dealer, and then assessing which auctions are occurring for those vehicles. Additionally, the base station 1 will ensure that the dealer is not excluded from the auction, for example if the second time limit has been reached, as discussed above with respect to step 320.

A list of relevant auctions is then displayed to the dealer at step 430, using for example, the web-page shown in Figure 8.

The web page displays details of one or more auctions, with two being shown in this example at 55A, 55B. For each auction, an auction icon is provided at 57A, 57B. The icon identifies the auction, and can also be used to indicate the dealer's status in the auction using a respective colour. Thus, for example, the icon can be highlighted in red if the dealer is not currently winning the auction and highlighted in green if the dealer is currently leading the bidding.

The web-page also includes details of the auction at 58A, 58B and an auction status at 59A, 59B. In this case, if bidding is completed, this is indicated as shown at 59B. However, if the auction in progress the auction status 59A includes a field allowing the dealer to submit a new bid at step 440. This can be achieved by adjusting a current bid value, in this example, $60900, using bid increase and decrease buttons It will be appreciated that in the case of a first dealer making a bid, the current bid value will be equal to the auction start price.

-14- N At step 450 the base station 1 operates to update the auction data to reflect the new current bid value, and determines if the bidding process is complete at step 460. If not, the base S station 1 will display the updated auction details to the dealer, allowing further bids to be

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submitted, utilising steps 400 to step 450 above. It will be appreciated that this is performed for a number of dealers simultaneously, with the displays for each dealer being updated each time a new bid is submitted, thereby each dealer is viewing the latest current bid values.

N Once the bidding process is complete, which is typically performed at the end of the business O day on which the auction is held, the base station 1 determines the successful dealer based on iN the dealer having the lowest bid value.

D At step 480 the base station 1 transfers details of the successful bid to the purchaser and the dealer allowing the purchaser and the dealer to complete the transaction.

At step 490 the purchaser and the dealer arrange to allow a trade-in value to be provided.

This typically requires an inspection of the vehicle to be performed, which may be achieved in a number of manners.

For example, the purchaser could obtain an inspection certificate from an independent third party, such as an assessment body, and provide this to the dealer, either as part of the trade-in details at step 240, or following the end of the bid process at step 490. This allows the dealer to provide the trade-in value to the purchaser via the base station 1.

Alternatively, the dealer may require the purchaser to visit the dealer's premises allowing the dealer to inspect the vehicle. It will therefore be appreciated that this allows the dealer to take into account the condition of the vehicle.

The purchaser may also optionally obtain a trade-in valuation from a third party, such as a second hand vehicle dealer, at step 500. In this instance, this can be performed automatically by having the base station 1 transfer the trade-in vehicle details to one or more third parties upon completion of the auction. In this case, the third parties can submit offers so that the purchaser can accept the third party offer instead of the dealer's offer. It will be appreciated that this may also be performed prior to the purchaser obtaining a valuation from the dealer, thereby assisting the purchaser in assessing the dealer's offer.

S In the event that the purchaser is unhappy with the trade-in offer made by the dealer, the purchaser is at liberty to refuse the trade-in but, in one example, is obliged to continue with the purchase of the new vehicle as arranged. In this case, the purchaser may approach the

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third party and accept their offer, or arrange their own sale.

tt 5 At step 510 the transaction value is finalised taking into account any agreed trade-in.

00 O At step 520 the purchaser typically discusses finance and/or insurance options with the IND dealer, with the purchaser optionally obtaining finance/insurance offers from third parties at step 530. This can again be achieved by having the base station 1 provide details of the (-i transaction to one or more third parties, allowing them to submit offers. This can therefore be D achieved in a manner similar to that performed with respect to obtaining a trade-in offer.

It will be appreciated that this allows the end user to arrange a finance and/or insurance deal with either the dealer, or an independent third party. It will be appreciated that the offering of finance/insurance deals to independent third parties may also be performed using a scenario similar to that described above, allowing a number of different finance companies or insurance companies the opportunity to bid to provide finance or insurance for the vehicle.

Thus, in one example, when it is known what vehicle is to be provided, this can be used to create auction data relating to required insurance for the vehicle, which is then displayed to insurance companies as potential insurers. Once this is completed, the insurance companies may bid to provide insurance to the vehicle purchaser. Again, this allows a winning lowest bid to be selected, and forwarded to the user, allowing them to select to purchase the insurance policy at the bid price.

In any event, the transaction is then completed at step 540 by having the purchaser and the dealer sign any necessary documentation and arrange for the vehicle to be provided.

This process therefore provides a number of further advantages.

The dealer is only provided with auctions in which they are able to participate and this reduces the work load on the dealer having to review a significant number of auctions to find suitable ones in which to bid.

-16ri The bidding process is performed in accordance with a predetermined time period, which is typically one business day. This provides a rapid sale for the dealer, as well as allowing the S purchaser to be confident of receiving a vehicle as soon as possible.

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The utilisation of a third party for the trade-in offer also has additional benefits for the t 5 purchaser. In particular, this avoids the dealer operating to offer to a lower value for the 00 iN trade-in offer which could commit the purchaser into a transaction in which they are 0 N effectively losing money due to a lower value on the trade-in offer. This also allows 0 independent third parties to purchase second hand vehicles before sale.

Finally, whilst the purchaser is able to compare the end price to the recommended retail price, the dealer is able to maintain confidentiality of margins, or the like.

It is typical for the dealer to be required to pay a fee in order to view and participate in auctions. The fee structure used will depend on the respective implementation.

In one example, a number of levels of membership are provided. At the lowest level the purchaser is limited in the number of auctions in which they may participate and in the number of vehicles which may be sold in any given time period. At the highest level, access to auctions in unrestricted and the number of sales unrestricted. It will be appreciated that variations on this are possible and for example, sales or participation in auctions may be charged on a per case basis.

It will be appreciated that whilst the above is described with respect to vehicles generally, the system is particularly suited to high volume sales, such as cars. However, the system could equally be used for any vehicle, or other high value article which is traditionally sold through dealerships, or other similar channels. For example, the process could be extended to the insurance industry to allow different insurance companies to bid for providing policies to insurees.

Persons skilled in the art will appreciate that numerous variations and modifications will become apparent. All such variations and modifications which become apparent to persons skilled in the art, should be considered to fall within the spirit and scope that the invention broadly appearing before described.