Patent Publication Number: US-2013254005-A1

Title: Online auction and method

Description:
TECHNICAL FIELD AND BACKGROUND OF THE INVENTION 
     The present invention relates to online auctions and, more particularly, to a method of running an online auction. 
     Online auctions have become a favorite way for millions of consumers to buy and sell products. Auction houses such as EBAY and SWOOPO have become very popular due to the ease and convenience with which an individual having access to the Internet can list a product for sale or locate a product that he or she wishes to buy. 
     Conventionally, online auctions can occur  24  hours per day, seven days per week. While auctions allow individuals to often buy products for less money, they can often cause individuals to pay more for a product due to someone coming in at the end of an auction and bidding up the price. These types of auctions reward individuals who only participate at the end of an auction, or punish those who pay more because of the bidding war that ensues at the end of the auction. 
     Accordingly, there is a need for an auction that rewards individuals for bidding early in the auction and does not punish those individuals with higher prices due to a bidding war at the end of the auction. 
     BRIEF SUMMARY OF THE INVENTION 
     These and other shortcomings of the prior art are addressed by the present invention, an online auction includes a computer programmed to host the auction, the computer being accessible to a user through a communications network and adapted to provide a user interface to allow a user to bid on or sell an item on the auction; and a plurality of auction modules executed by the computer in response to a pre-set event, the modules being adapted to conduct various stages of the auction such that a winner of the auction is determined. The auction modules include a Get-It-Now module executed by the computer when a bidder purchases the item being sold on the auction at a pre-determined price, thereby ending the auction; a bid module executed by the computer in response to the Get-It-Now module not being executed, the bid module controls the auction until the auction times out or until a sale price of the item being sold reaches zero; and a going once mode module executed by the computer in response to completion of the bid module, the going once mode module being adapted to continue the auction until the going once mode module times out or until no more bids are placed. Upon completion of the auction, the computer determines a winner of the auction. 
     According to one aspect of the present invention, a method of conducting an auction in an online environment accessible over a communications network, includes the steps of providing a computer programmed to host the auction, the computer being accessible to a user through the communications network and adapted to provide a user interface to allow the user to bid on or sell an item on the auction; providing instructions to the computer through the user interface, the instructions providing parameters for the auction being conducted; and displaying the item for sale on the user interface with an initial sale price and prompting a bidder to bid on the item. The method further including the steps of allowing the bidder to bid on the item through the communications network, wherein in response to a bid by the bidder, the computer reduces the initial sale price by a bid value and displays a new sale price on the user interface; and using the computer to determine a winning bidder and shipping the item to the winning bidder. 
     According to another aspect of the present invention, a method of conducting an auction in an online environment accessible over a communications network including the steps of providing a computer having software thereon to host and control the auction, the computer being accessible to a user through the communications network and adapted to provide a user interface to allow users to interact with the auction; and displaying the item for sale on the user interface with the initial sale price and prompting a bidder to bid on the item. The method further including the steps of allowing the bidder to bid on the item through the communications network using the user interface, wherein in response to a bid by the bidder, the computer reduces the initial sale price by the bid value and displays a new sale price on the user interface, and wherein the computer continues to reduce a new sale price by the bid value in response to bids until a new sale price reaches zero or until the auction times out, the computer initiating a going once mode upon the new sale price reaching zero or the auction timing out; and using the computer to determine a winning bidder and shipping the item to the winning bidder. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
       The invention may be best understood by reference to the following description in conjunction with the accompanying drawing figures in which: 
         FIG. 1  shows a general schematic of an online auction; 
         FIG. 2  shows a flow diagram for a buyer; 
         FIG. 3  shows a flow diagram for a seller; 
         FIG. 4  shows a flow diagram for the auction; 
         FIG. 5  shows a flow diagram for “Going Once Mode” of the auction shown in  FIG. 4 ; 
         FIG. 6  shows a flow diagram for a free bid auction; and 
         FIG. 7  shows a flow diagram for the auction. 
     
    
    
     DESCRIPTION OF THE PREFERRED EMBODIMENT AND BEST MODE 
     Referring now specifically to the drawings, an online auction and method according to an embodiment of the invention is illustrated in  FIG. 1  and shown generally at reference numeral  10 . The auction  10  is a software-based website contained on servers  11  that provides a secure platform for buyers and sellers to conduct transactions. The website is accessed via a computer  12  through an internet or communications network  13  and provides a user interface  14  that allows both buyers and sellers to access features associated with the auction  10 . 
     The auction  10  is set up for both buyers and sellers. As shown in  FIG. 2 , buyers are permitted to register with the auction  10  for free (Block  20 ) using a registration module of the software. Once registered, buyers purchase bids (Block  21 ). The bids may be purchased in increments or blocks. For example, bids may be purchased in increments of 1, 5, 10, 20, etc. In addition, for each bid purchased, the buyer will receive a determined amount of free bids, Block  22 , that can be used in a free bids auction (described later). The buyer may also receive free bids by referring another buyer (Block  22 A) to the auction  10  or by losing (Block  22 B) the auction  10 . 
     Once the buyer has purchased bids, Block  21 , the buyer is permitted to bid on the item up for sale, Block  23 . If the buyer wins the auction  10 , the buyer pays the seller the bid amount, Block  24 , but if the buyer loses the auction  10 , the buyer receives free bids (Block  22 B) equal to the number of bids the buyer cast in the auction  10 . If the buyer wins the auction  10 , the buyer may turn around and sell the item for a profit. In this case, the buyer signs up as a seller for a one time fee plus a listing fee. The listing fee may be a percentage or a set dollar amount. 
     As shown in  FIG. 3 , sellers are registered with the auction  10 , Block  30 , using the registration module, and must choose between one of three membership levels, Blocks  31 - 33 . Each of the membership levels provide benefits to the seller for a preset monthly fee, as well as listing fees, etc. For example, if a seller chose a silver membership, the seller would be provided with a low monthly fee, a listing fee per auction, and a certain percentage of profit based on an item selling for more than auction list price. If the seller chose a platinum membership, the seller would incur a bigger monthly fee, but in exchange would receive a private storefront, and a larger percentage of profit for items selling above the auction list price. 
     For example, once the seller has signed up for a membership package and has paid the monthly fee, the seller is then permitted to place an item on the auction  10 . The seller would pay a 2% listing fee based on the list price of the item. So, a $300.00 item would incur a $6.00 listing fee. If the item sells for $600.00-$300.00 more than the listing price, then the seller would receive the $300.00 list price plus a percentage of the additional $300.00. So, if the seller receives 60% of the additional $300.00, the seller would receive a total of $480.00 for the item sold. 
     Referring to  FIG. 4 , the auction  10  provides a buyer three ways to win the auction  10 . As shown, the auction  10  operates by first having a seller place an item up for auction (Block  40 ). Prior to placing the item up for auction, the seller has the option of setting up parameters for the auction  10 , including, but not limited to, an initial sale price, a bid value, and a pre-determined time limit for the auction. In addition, the seller may determine the value of the bids during the auction  10 . For example, the seller may value the first twenty bids at $1.00, the next fifty bids at $0.50 and so on. 
     At Block  41 , buyers purchase bids for use in the auction  10 . A bid module of the software instructs the computer  11  to send the auction into normal bidding, Block  47 . If no bids are received on an item, then the auction times out (Block  48 ) and the auction  10  is ended. Each auction will have a predetermined time, for example, three days. 
     If a bid is placed, Block  47 , then the list price is reduced by the value of the bid, Block  49 . For example, if the list price is $300.00 and the bid value is $1.00, then the price of the item is reduced to $299.00. If there are no additional bids, Block  50 , then the auction  10  times out and a going once mode module instructs the computer  11  to send the auction into “Going Once Mode”, Block  51 . Going Once Mode is described in more detail with reference to  FIG. 5 . If no additional bids are placed during the “Going Once Mode”, then the auction  10  ends (Block  52 ) and the buyer pays the seller the $299.00 sale price. The seller also receives the bid value, so if the bid value was $1.00, then the seller would receive the $299.00 sale price plus the $1.00 bid value for a total of $300.00. If additional bids are received, Block  50 , then the price of the item continues to be reduced (Block  53 ) by the value of the bids. 
     If the price of the item is not reduced to $0.00, Block  54 , and the time for the auction has run out, then the auction  10  goes into “Going Once Mode”, Block  56 . Once the “Going Once Mode”, Block  56 , has finished, the auction ends, Block  57 . The winning buyer pays the seller the sale price which could be as low as $0.00. The seller also receives a percentage of all bids over the actual listing price. If the price of the item is reduced to $0.00 prior to the time running out, Block  54 , then the auction  10  goes into “Going Once Mode”, Block  58 . The “Going Once Mode”, Block  58  will continue until no bidders are bidding or until time runs out, Block  59 . If there is still more than one bidder for the item and time runs out, then the winner will be the person who bid the most often in the auction  10 . If there is a tie, then the person who bid earliest in the auction will win. 
     Referring to  FIG. 5 , the “Going Once Mode” is an important mechanism in the auction  10 . As shown, once the “Going Once Mode” is initiated, Block  60 , the auction software flashes “Going Once”, Block  61 , for a predetermined time, such as 3 seconds, and then flashes “Bid Now” for a predetermined time. If a bid is placed during that time (Block  62 ), then “Going Once Mode” is restarted. If no bids are placed (Block  62 ), then the software flashes “Going Twice”, Block  63 , for a predetermined time and then flashes “Bid Now” for a predetermined time. If a bid is placed during that time (Block  64 ), then “Going Once Mode” is restarted. If no bids are placed (Block  64 ), then the software flashes “Final Notice”, Block  66 , for a predetermined time and then flashes “Bid Now” for a predetermined time. If no bid is placed during that time (Block  67 ), then the software flashes “Sold”, Block  68 , and the auction  10  is over. If a bid is placed during that time, Block  67 , then the “Going Once Mode” is restarted. 
     Like the regular auction, the “Going Once Mode” is regulated by a time limit. If bids keep coming in for the item, then the “Going Once Mode” will end by time, and a winner will be declared. If the bids stop, then the “Going Once Mode” will end by virtue of there being no further bids to restart the Mode. 
     Buyers who have earned free bids may also enter a free bid auction  100 ,  FIG. 6 . Free bids cannot be purchased and can only be granted, as disclosed above with reference to  FIG. 2 . Free bid auctions are run by an auction controller, as opposed to a seller. Like auction  10 , auction  100  places an item up for auction for buyers to bid on, Block  101 . The main difference is that only individuals with free bids may participate in the auction  100 . 
     If no bids are placed, Block  102 , the auction  100  times out and the auction is over, Block  103 . If a bid is placed, Block  102 , the list price of the item is reduced by the bid value, Block  104 . If no additional bids are cast, Block  106 , then the auction  100  times out and goes into “Going Once Mode”, Block  107 . If no additional bids are placed during the “Going Once Mode”, then the auction  100  ends (Block  108 ) and the buyer pays the seller the sale price. If additional bids are received, Block  106 , then the price of the item continues to be reduced (Block  109 ) by the value of the bids. 
     If the price of the item is not reduced to $0.00, Block  110 , and the time for the auction has run out, then the auction  100  goes into “Going Once Mode”, Block  111 . Once the “Going Once Mode”, Block  111 , has finished, the auction ends, Block  112 , and the winning buyer pays the sale price. If the price of the item is reduced to $0.00 prior to the time running out, Block  110 , then the auction  100  goes into “Going Once Mode”, Block  113 . The “Going Once Mode”, Block  113  will continue until no bidders are bidding or until time runs out and the auction ends, Block  114 . If there is still more than one bidder for the item and time runs out, then the winner will be the person who bid the most often in the auction  100 . If there is a tie, then the person who bid earliest in the auction  100  will win. 
     Referring to  FIG. 7 , additional functions may also be incorporated into the auction  10  to provide additional avenues for the buyer to win the auction or to provide additional functionality to the auction  10 . It should be appreciated that any suitable add-on may be added as a module. For example, a “Get It Now” feature may be added to allow a buyer to win the auction  10  by simply paying the “Get It Now” price. In this scenario, the auction would operate much in the same way as it did above. 
     More particularly, (if the “Get It Now” feature is incorporated into the auction  10 ) the auction  10  operates by first having a seller place an item up for auction (Block  40 ). Prior to placing the item up for auction, the seller has the option of activating the Get-It-Now feature which allows buyers to purchase the item at a “Get It Now” price. If the “Get It Now” feature has been activated (Block  42 ) by the seller using a Get It Now module of the software, the buyer may place a bid at the “Get It Now” price, Block  43 , and purchase the item, thereby ending the auction, Block  44 . If the “Get It Now” feature has not been activated, or a bid is not placed at the “Get It Now” price, then the bid module of the software instructs the computer  11  to send the auction into normal bidding, Block  47 , and the auction proceeds as discussed above with reference to  FIGS. 4-6 . 
     An online auction and method is described above. Various details of the invention may be changed without departing from its scope. Furthermore, the foregoing description of the preferred embodiments of the invention and best mode for practicing the invention are provided for the purpose of illustration only and not for the purpose of limitation.