Abstract:
A method for aligning financial and logistical flows within a business to business internet exchange portal is disclosed. The method of the present invention includes the steps of facilitating an auction on the portal between a buyer and a seller; collecting a set of shipping data for a contract entered into between the buyer and seller resulting from the auction; soliciting bids for shipping services required by the contract; receiving a set of shipping bids; and selecting a bid from the set of bids according to a predetermined set of bid evaluation criteria.

Description:
BACKGROUND OF THE INVENTION  
         [0001]    1. Field of the Invention  
           [0002]    The present invention relates generally to methods for arranging financing and shipping within an e-commerce supply chain environment, and more particularly for aligning financial and logistical flows with an internet exchange portal.  
           [0003]    2. Discussion of Background Art  
           [0004]    In this modern information age, an increasing number of business transactions and logistical services are provided over computer networks. Internet exchange systems are one example of such “virtual” networks.  
           [0005]    [0005]FIG. 1 is a dataflow diagram of an example of an internet exchange system  100  configured to operate as an online Business-to-Business (B 2 B) auction. In the system  100  a seller  102  seeks to enter a transaction with a buyer  104  for a sale of goods or services through an internet exchange portal  106 . The portal  106  hosts a service for connecting willing buyers and sellers, through perhaps using an auctioning system where sellers shop for buyers willing to pay most for a seller&#39;s goods, and buyers shop for least expensive seller&#39;s goods. Typically, the seller  102  and buyer  104  independently log on to the portal over lines  108  and  110  respectively. The seller  102  then advertises goods for sale and the buyer  104  searches for goods to purchase.  
           [0006]    In order to finance auction bids, some buyers pre-arrange for payment using credit from flooring companies. Flooring companies typically extend credit to buyers for purchasing a predetermined set of goods and/or services. Flooring is typically arranged in advance of a buyer&#39;s bid to purchase goods and often flooring providers transfer the credited funds directly to sellers upon the buyer&#39;s instructions. Unlike conventional letters of credit, however, buyers typically cannot use flooring credit for purchasing office equipment, or other goods and/or services beyond those specifically pre-approved by the flooring company. In some cases, buyers may even have to apply to multiple flooring providers until sufficient flooring credit is obtained.  
           [0007]    In a web-based auction environment, however, goods and service appear and disappear at a very rapid rate, providing little time for buyers to apply for and for flooring companies to decide whether to provide flooring. Furthermore, since flooring providers need to know which specific goods and/or services the buyer wishes to bid upon before even considering the buyer&#39;s flooring application, conventional buyer-managed flooring application practices introduce a significant time delay between when the buyer identifies goods and/or services to be bid upon over the auction site, and when the buyer receives flooring credit approval from one or more flooring companies so that a bid can actually be made. Buyers thus often lose many opportunities to purchase goods and/or services in the auction environment. Such problems are further compounded when buyers are regular auction participants and repeatedly need to seek and receive flooring credit.  
           [0008]    After the buyer  104  obtains flooring over line  109  from a flooring company  111 , the buyer  104  may make a bid for the goods and/or services offered by the seller  102  over the portal  106 . Once the seller  102  and buyer  104  have agreed to enter into a contract for a sale of goods or services, the portal  106  generates an electronic confirmation which is sent to both the seller  102  and the buyer  104  over lines  108  and  110 .  
           [0009]    The seller  102  is typically responsible for arranging shipment of the goods to the buyer  104 . Logistics surrounding shipping the goods however tend to be very complicated and consume a substantial amount of the seller&#39;s  102  resources. The seller  104  either has in place or establishes a shipping contract with a variety of shipping service providers. For the purposes of this exemplary discussion, the seller  102  sends a request for shipping quote over lines  112 ,  114 , and  116  to respectively a shipping broker  118 , a first shipper  120 , and a second shipper  122 . Upon receipt of the seller&#39;s  102  request for quote, the shipping broker  118  sends a request for shipping quote over lines  124 ,  126 , and  128  to respectively the first shipper  120 , the second shipper  122 , and a third shipper  130 .  
           [0010]    The shippers  120 ,  122 , and  130  are typically either “common freight carriers” or “freight forwarders.” Common freight carriers include UPS, Federal Express, DSL, as well as others known within industry. Common carriers, however, tend to be very expensive, thus specialize in low volume, low weight aperiodic shipments. Thus, sellers needing to ship goods in high volume and/or of high weight often find common freight carriers too expensive.  
           [0011]    Freight forwarders are shippers, such as interstate trucking lines, which tend to specialize in high-volume, high-weight shipments. Often freight forwarders, especially independent trucking lines, find that their shipping platforms (e.g. trucks, containers, box cars, etc.) are scheduled for delivery at less than full capacity. For instance, a flat-bed truck scheduled for a New York to Los Angeles route may be only half-full. Since freight forwarders operate most profitably with a full load of goods, they attempt to fill their unused capacity with paying cargo. Toward this end, the freight forwarders allocate significant resources for repeatedly contacting a variety of independent sources in search of goods to fill their unused capacity.  
           [0012]    Shipping brokers (a.k.a. freight brokers) provide sellers with another option for arranging shipping. Shipping brokers include Roadway, Skyway, Consolidated Freight, GNA, as well as others known within industry. Shipping brokers reduce a seller&#39;s shipping cost by offering sellers a reduced overall shipping price in exchange for a periodic guaranteed minimum volume and/or weight of goods for shipment. Shipping brokers select either freight forwarders or common freight carriers for actual physical shipment of goods. Many sellers, especially those participating in internet auctions, however have varying volume and weight requirements and can not meet a shipping broker&#39;s volume and/or weight requirements over a guaranteed length of time.  
           [0013]    In the example shown in FIG. 1, the first shipper  120  has been selected either directly by the seller  102  over line  116 , or indirectly via the shipping broker  118  over lines  112  and  124 . The first shipper  120  then receives the goods from the seller  102 , as logically denoted by line  116 , and ships them to the buyer  104 , as logically denoted by line  132 .  
           [0014]    When sellers assume responsibility for initiating contact with shipping brokers and/or shippers, however, significant economic inefficiencies are introduced into the internet exchange supply chain. For example, many shippers who have unused capacity or offer a lower shipping rate may be overlooked by the seller  102  or the shipping broker  118  who do not have time to call these shippers, or may not even know of the shippers existence. Thus, sellers may have to pay higher shipping costs than otherwise were possible. The economic inefficiency of such seller handled shipping arrangements is even further compounded as hundreds of sellers and buyers participate in auctions on internet exchange portals on a daily basis.  
           [0015]    Another problem with seller managed shipping regards fee collection by the internet exchange. In order to keep providing auction services, the internet exchange portal  106  collects a fee once a sales contract between the buyer and seller for the sale of goods and/or services is consummated. Consummation can occur at any time defined by the sales contract. Thus consummation may occur when the buyer enters in a contract with the seller, when the buyer actually makes payment to the seller, when the seller ships the good to the buyer, when the buyer receives and accepts the goods, or after any other event specified by the contract.  
           [0016]    Since consummation may occur at a different for each transaction entered into by the buyer  104  and seller  102 , the portal  106  is faced with a great deal of uncertainty as to when to begin contacting either the buyer or seller and collect the fee. Even if the portal required that all buyers and sellers agree to consummation upon a predetermined event, only the buyer and seller are typically aware that such event has occurred as they keep in communication over line  134 .  
           [0017]    To address this notice problem, exchange portals currently assign significant resources for repeatedly contacting sellers and buyers to ask whether the consummating event has occurred. Even after the consummating event has occurred, the portal  106  must still independently generate an invoice for collecting the fee. This is a very time consuming and laborious process.  
           [0018]    In response to the concerns discussed above, what is needed is a method for aligning financial and logistical flows within an internet exchange portal that overcomes the problems of the prior art.  
         SUMMARY OF THE INVENTION  
         [0019]    The present invention is a method for aligning financial and logistical flows within an internet exchange portal. The method of the present invention includes the steps of facilitating an auction on the portal between a buyer and a seller, receiving an auction bid from the buyer, soliciting financing from a financing company in response to the auction bid, and soliciting shipping services from shippers in response to the auction bid.  
           [0020]    The method of the present invention may further include the steps of facilitating an auction on the portal between a buyer and a seller; collecting a set of shipping data for a contract entered into between the buyer and seller resulting from the auction; soliciting bids for shipping services required by the contract; receiving a set of shipping bids; and selecting a bid from the set of bids according to a predetermined set of bid evaluation criteria.  
           [0021]    In other aspects of the invention, the method may include the steps of: collecting a contract consummation event and billing an auction services fee upon occurrence of the event; specifying a bidding-period and processing only those bids received within the bidding-period; grouping together similar shipment needs for shippers and shipping brokers to submit a single bid upon; and soliciting unused capacity from shippers and shipping brokers for buyers and sellers to bid upon.  
           [0022]    The method of the present invention is particularly advantageous over the prior art because fewer people are needed to administer financial and logistical alignment after a buyer has accepted and financed terms of a sale through the portal. Also, since the portal handles all financial and logistical flows upfront, there is ample time for the seller to gather and place purchased goods on a loading dock for shipment, and for freight forwarders to bid for providing shipping services.  
           [0023]    The present invention also creates a competitive market for shipping services over the internet exchange and also greatly reduces the exchange&#39;s administrative overhead required to collect auction fees. Also, since the present invention enables shippers to bid for shipping business directly from the portal, the both the portal and shippers can avoid paying intermediate fees to shipping brokers.  
           [0024]    Using the present invention, shippers have a competitive solution for filling unused capacity. Sellers using the present invention are able to rapidly transact and “cash out” inventory through the exchange portal without added administrative and logistical alignment costs associated with arranging necessary shipping.  
           [0025]    Finally, since buyers need only deal with an internet exchange portal, which automatically aligns both financial and logistical transaction flows, the present invention greatly simplifies sales of goods over internet exchange portals. And from the buyer&#39;s perspective, the entire operation is transparent, and the buyer need only accept contract terms over the portal.  
           [0026]    These and other aspects of the invention will be recognized by those skilled in the art upon review of the detailed description, drawings, and claims set forth below.  
       
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
       [0027]    [0027]FIG. 1 is a dataflow diagram of a typical financial and logistical flow within internet exchange system;  
         [0028]    [0028]FIG. 2 is a dataflow diagram of a system for automatically aligning financial and logistical flows within an internet exchange portal; and  
         [0029]    [0029]FIG. 3 is a flowchart of a method for automatically aligning financial and logistical flows within an internet exchange portal.  
     
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT  
       [0030]    [0030]FIG. 2 is a dataflow diagram of an internet exchange system  200  for aligning financial and logistical flows within an internet exchange portal  202  configured to operate as an online Business-to-Business (B2B) auction, and FIG. 3 is a flowchart of a method  300  for doing so. A plurality of suppliers, dealers, resellers, and distributors are registered to transact business over the portal  202 . The portal  202  may be configured either as a complex individual company or industry-wide supply chain in which there is rapid inventory turnover and associated financial and logistical flows needing alignment. The system  200  and method  300  are herein discussed together.  
         [0031]    The method begins in step  301  where a seller  204 , a buyer  206 , a first shipper  208 , a second shipper  210 , a third shipper  212 , and a shipping broker  214  register with the portal  202  over lines  216  through  226  in preparation for offering and bidding upon goods and services within auctions hosted and/or facilitated by the portal  202 . While the present invention is discussed with respect to a single seller, buyer, three shippers, and a shipping broker, those skilled in the art recognize that the present invention can scale to any number of sellers, buyers, shippers, and brokers.  
         [0032]    In step  302 , the buyer  206  and seller  204  tentatively agree to enter a contract for a sale of goods and/or services. In response, the portal  202  automatically and immediately begins to align both financial and logistical flows necessary to complete terms of the contract. In step  303 , the portal  202  aligns the financial flow between the buyer  206  and the seller  204  by soliciting flooring from a flooring company  227  over line  229 . Those skilled in the art recognize that the portal  202  could also solicit flooring or other financing from any number of other credit providers.  
         [0033]    Automatic flooring can be effected by the portal  202  by having the buyer  206  complete a generic flooring application which is then automatically forwarded to one or more flooring providers who then respond to the portal  202  with respective amounts of flooring credit available to the buyer  206 . If the flooring company  227  approves sufficient credit necessary to the contract, the portal  202  provides the buyer  206  with an acceptance button which the buyer  206  clicks on to approve flooring credit, in step  304 .  
         [0034]    Certain ancillary communications related to the bid are transmitted between the buyer  206  and the seller  204  over line  231 .  
         [0035]    Once the buyer  206  clicks on the acceptance button, the portal  202  then begins to automatically align the logistical flow, in step  305 . If the seller  204  agrees to ship goods to the buyer  206  as part of the contract, the portal  202  transmits a shipping form to the buyer  206  and the seller  204  over lines  218  and  216  respectively, in step  306 .  
         [0036]    The shipping form includes a set of shipping fields for storing shipping data/information. The shipping data includes buyer and seller identification, an origination address, a destination address, shipping weight, shipping quantity, shipping volume, delivery time, a consummation event, a bidding-period, as well as other information customarily associated with shipping goods. The consummation event is a predetermined contract event which defines with certainty when the portal  202  can collect an auction services fee for providing auction services to the buyer  206  and seller  204 . Since the portal  202  stores the consummation event locally and arranges shipping, the portal  202  need not contact the buyer  206  and seller  204  to determine when to invoice the fee. The bidding-period is a predetermined window of time during which either the seller  204  or buyer  206  must have the goods shipped. The bidding-period may even be as short as 24 to 48 hours.  
         [0037]    The portal  202 , in step  308 , populates the fields in the shipping form with information provided by the buyer and seller. In step  310 , the portal  202  displays a predetermined set of shipping information on an internet exchange portal website. In an alternate embodiment, the portal  202  sorts through a set of shipments scheduled between any number of sellers and buyers. The portal  202  then groups shipments within the set by a common seller, a common buyer, a common origination location, a common destination location, a common delivery time, as well as other common shipping information within the set of shipments. Grouping by the portal  202  can further increase logistical and economic efficiencies of the internet exchange auction.  
         [0038]    In step  312 , the shippers  208 ,  210 ,  212  and shipping broker  214  access the shipping information on the portal website over lines  220  through  226  respectively. The shippers and broker then submit bids for providing shipping services to the buyer  206  and seller  204 , in step  314 . Note, some shippers or brokers may chose not to submit a bid.  
         [0039]    In step  316 , the portal  202  receives and evaluates each of the bids. Depending upon individual registration agreements between the portal  202 , the buyer  206 , and the seller  204 , the portal  202  may: select one of the bids automatically according to a predetermined set of bid evaluation criteria; forward the bids on to the buyer  206  and the seller  204  so that the buyer  206  and seller  204  can directly select one of the bids; or follow some other procedure known to those skilled in the art.  
         [0040]    The set of bid evaluation criteria can: select a bid with a lowest shipping price; factor in a shipper&#39;s on-time delivery performance, volume discounts, and/or prior relationship with either the portal  202 , the buyer  206 , or the seller  204 . Those skilled in the art recognize other bid evaluation criteria which may be given weight by the portal  202 . If none of the bids are acceptable, the portal  202  assigns shipping to a predetermined shipper or shipping broker as defined within the registration agreements. In FIG. 2, the second shipper  210  has been selected to provide shipping services. Lines  228  and  230  represent communications between the second shipper  210  and the seller  204  and the buyer  206  related toward actually shipping the goods.  
         [0041]    In step  318 , the portal  202  generates an invoice for the auction fee and submits the invoice to either the seller or the buyer upon occurrence of the consummating event. Thus, since the shipping information includes the consummation event, the portal can determine with certainty a date after which the auction fee may be collected. This significantly reduces administrative resources required by the portal  202  for fee collection, and thus gives the portal  202  an opportunity to lower its commissions.  
         [0042]    In an alternate embodiment, the portal  202  renders an individualized hyperlinked logo of the second shipper  210  on the portal webpage which the buyer  206  and seller  204  may select in order to obtain shipment status information.  
         [0043]    In another alternate embodiment of the present invention, the portal  202  auctions a shipper&#39;s and shipping broker&#39;s unused capacity. Buyers and sellers may then directly bid for the unused capacity over the portal  202 . The portal  202  also charges a fee for providing this service.  
         [0044]    While one or more embodiments of the present invention have been described, those skilled in the art will recognize that various modifications may be made. Variations upon and modifications to these embodiments are provided by the present invention, which is limited only by the following claims.