Patent Application
20130144753
The invention is in the field of computer-based electronic commerce methods and systems, particularly those relying on the Internet.
E-commerce has achieved a substantial level of success, with billions of dollars being traded on-line through the Internet every year. The company that has been most successful in this area so far has been eBay.
However, a large part of the market remains untapped, in part because of the methodology used by current e-commerce companies including eBay. This methodology is based on having the buyer pay upfront, before receiving the merchandise being purchased. After receiving full payment, the buyer ships the merchandise to the buyer. If the merchandise fits the description and condition of the items offered, that concludes the transaction. However, if the buyer is dissatisfied with the items, a resolution process starts that can take weeks or months and which is made especially difficult because the buyer has no leverage, since the merchandise is already paid in full.
The lengthy and difficult resolution process leads to many buyers giving up on their complaint and just accepting the loss, therefore getting stuck with an item they don't like. These buyers become reluctant to buy online again.
Many potential buyers are reluctant to buy online in the first place, because it is a well-known fact that the current system disproportionately favors the seller over the buyer, because upfront full payment before shipment gives the seller too much leverage. Reputable sellers don't take advantage of this bias in the system, but the Internet includes millions of potential sellers, some reputable and many who are not. The buyer in many cases doesn't know what type of company or individual he/she is buying from, and he/she may perceive the transaction as too risky—and not order online.
There have been some attempts to design an ecommerce system that would address the issue of current bias in favor of the seller. U.S. Pat. No. 7,734,320 proposes an escrow system, which is an improvement, but it is based on an inspection system where the buyer is required to go inspect the items upon delivery to a local warehouse before releasing payment. Such a system would be impractical, too expensive and not acceptable to most users because of the hassle of having to travel to inspect items.
U.S. Pat. No. 8,051,150 tries to address the reluctance of many potential online buyers to order online by having a website acting as an intermediary in the transaction and hiding the identity of the parties to the transaction from each other to avoid disclosure of sensitive financial information, such as credit card number or bank account numbers. However such a system does not address the bias in favor of the seller created by the approach of having the buyer pay full price upfront before shipping.
Another unintended consequence of the current system is that buyers tend not to use e-commerce for large purchases, because of the risk involved. That risk is generally perceived as acceptable for a small ticket item such as a $5 book, but for a $50,000 item it would seem too risky to most potential buyers, since the resolution of a possible dispute is potentially very difficult because of the “full pay upfront” approach.
The current pay upfront approach also takes the incentive away from sellers to ship the merchandise as quickly as possible and to package it correctly. The transaction is already done and the seller is already paid.
Another problem for many potential buyers is that typically current e-commerce sites such as eBay use the auction approach, which means that even if the desired item is found, it may not be available for several days. That is OK for some items, but most buyers would prefer to find what they want and order it without having to wait for the end of an auction. A so-call “buy it now” option is available for some items, but the majority of items are subject to the auction waiting period. Most people don't have the time or inclination to engage in an auction and wait a relatively long time for an item they want right away.
Another problem with the current system is that the site facilities provided to show the items for sale are not advanced enough, relying basically just on photographs of the item posted on the site. Photographs are useful, but more advanced systems can be helpful, because a photograph can show the item only from the most favorable side/angle. The site should provide the necessary facilities for multiple photographs in an interactive session with the seller, video, audio, as well as support for smartphones, laptops and tablets for a live demonstration of the item for sale. The communication between seller and buyer should be enhanced by providing messaging, instant messaging, email, voice over Internet Protocol (VOIP), video conferencing, twitter-like messaging and other facilities that can make it easy and fast for buyer and seller to pursue the desired transaction. For long distance transactions, VOIP can be particularly useful to avoid the deterrence of long distance phone costs.
The previously mentioned facilities for communication and for display of the items can be particularly important because it can create the level of comfort and trust needed for a transaction between parties still unknown to each other. In many cases this method also can create a record that can be used to prove that the part displayed and the part shipped are actually the same.
A further problem of current e-commerce systems is that they don't support terms of credit, such as net 30, net 60 or other terms that are customary in commercial transactions. That is a very serious limitation, because the vast majority of commercial transactions are based on such credit terms. Current systems support only cash or credit card purchases (or variations thereof such as PayPal), but they do not support credit terms. There is an enormous market that is currently excluded from e-commerce by not supporting credit term transactions. The size of the unserved credit term market is a multiple of the size of the market that is currently served by current systems.
Another problem with the current e-commerce system is that it discourages international transactions. The “pay upfront in full” approach works in many cases for small ticket items within the national borders, but for transactions involving a seller abroad the risk is generally perceived as too high. That virtually eliminates most international sources that otherwise could be highly competitive or even better in some categories. That is a disadvantage for both sellers and buyers. The excessive bias of the current system in favor of the seller ends up hurting sellers trying to sell their items into other countries, by virtually eliminating them from consideration. That includes not only Asian sellers trying to sell in the U.S. and Europe, but also American sellers trying to sell globally. The current system bias is to everybody's disadvantage.
An unbiased system that equally protects buyers and sellers would open up huge new markets for e-commerce, both nationally (more buyers because of more trust in the system, and also addition of bigger ticket items) and internationally (complete new continents with billions of buyers would be added to e-commerce).
While this invention is susceptible to embodiment in many different forms, there are described in detail herein several specific embodiments, with the understanding that the present disclosure is to be considered as an exemplification of the principles of the invention and is not intended to limit the invention to the embodiments illustrated.
The embodiments illustrated herein describe a new system and method to conduct e-commerce that eliminates biases in current systems and ensures that both buyer and seller are equally or similarly protected, which is in the interest of both buyers and sellers to the extent it serves to dramatically expand the size of the e-commerce market. The new system will also enable credit term based transactions (further expanding the e-commerce market size) and enable and popularize international e-commerce to an extent not experienced until today.
Unfortunately, cooperation and quick resolution by the seller often does not occur, because the seller is already paid in full and reluctant to take the item back and grant a refund. It also happens that the seller does not even respond to the contact attempts by the buyer. The only leverage the buyer at that point is the feedback that the buyer can provide regarding the seller. Reputable sellers try to maintain a good track record and therefore are generally responsive to the complaints of buyers. However, not every seller falls in that category, and the risk of having to deal with a seller in that category is high, especially if the seller is not an established vendor but rather an individual performing an occasional transaction.
If the attempts of the buyer to get resolution fail, the site can intervene and contact the seller (step 220). The buyer waits (step 230), in some cases for weeks, while the site attempts to resolve the situation. The site also has very limited leverage, because payment has already been made in full. Eventually, the site determines whether it can achieve resolution (step 240). If a resolution is reached, the item is returned (step 250) and a refund is issued (step 260). If no resolution is reached, the buyer must decide whether to accept the loss (step 270). If so, they buyer may provide negative feedback about the seller (step 280). Alternatively he/she can file an appeal with the site, which extend the process even further.
A major disadvantage of this resolution method is that it can be very lengthy and time-consuming, and puts the buyer at a great disadvantage, because the buyer may have to order the needed item again from another vendor, without even knowing if the dispute for the item already purchased will be resolved or not, and when. The buyer during this whole process is under no time pressure to get the dispute resolved because full payment has already been made.
In the e-commerce system of
As the next step in
In order to rapidly populate and grow the Gwarehouse, the system of this invention includes a Search Engine 420 that searches the Internet 425 with crawler software for the same items being searched by buyers, in order to find sources for those items and automatically invite those sites to list in Gmarket. This is analogous to the crawler software used in search engines to collect information that will accelerate searches, but in this case it is focused on the items that buyers are looking for in their searches. The use of this crawler software will allow fast and inexpensive growth of the GWarehouse.
The user's search in step 415 returns a list of responsive items, which is displayed to the user (step 430). The buyer then selects and views the desired item (step 435). Preferably, Gmarket provides not only the traditional photos of the item, but also other communication options for conveying information about the item, such as multiple photos from many sides and angles and even videos that the seller can post in the site using the site supported recording devices which can include a digital camera, a video recorder, the built-in camera of a laptop, the camera of a tablet computer, the built-in camera of a phone or other portable or stationary recording devices. An important feature to many buyers will be the live demo, which allows a seller to walk around the item with a camera, recorder, phone, tablet or laptop and demonstrate the product from different sides and angles, possibly in operation to prove its working condition. Also, communication facilities such as messaging, instant messaging, email relaying, audio conferencing, video conferencing and other communication facilities can be provided by the site to facilitate the transaction.
Next, the buyer makes the buying decision (step 440). If negative, the buyer can choose whether to start a new search (step 445). If positive, the buyer pays Gmarket the full item price plus shipping and handling as applicable (step 450). Gmarket confirms to seller that full payment has been made and that it is OK to ship the item to the buyer (step 455). The seller ships the item (step 460).
In
A determination is then made as to whether a buy objects to the transaction before expiration of the grace period (step 480). If there are no buyer objections within the grace period, Gmarket pays the seller (step 485).
If there are objections within the grace period, the Gmarket resolution process starts (step 490) by Gmarket receiving input from both buyer (step 500) and the seller (step 505). Preferably, the Gmarket site provides communication facilities to encourage interaction between the buyer and seller to help the parties explain and understand any objections and potential resolution. For example, being able to show the product and explain the objections in a video conference can facilitate a quick resolution. In addition to video conferencing, the Gmarket site may enable exchange of photographs, video clips and written communications between the parties, in order to explain and discuss any concerns with the product or transaction.
Ultimately, a determination is made within the Gmarket site as to whether the buyer will keep the merchandise (step 510). This decision may be made by agreement of the parties. Alternatively, Gmarket may act as an arbitrator to determine whether the buyer will be forced to keep merchandise or whether the buyer will be permitted to ship merchandise back. The arbitration decision may be driven by automated rules, or may include subjective determinations based on the information submitted by the parties during the resolution process 490.
If the buyer will keep the merchandise, Gmarket pays the seller (step 515). Otherwise, the buyer ships the item back to the seller (step 520). Delivery of the item back to the seller is confirmed in step 525.
As soon as the item arrives back at the seller's location, the seller's grace period starts (step 530). The seller's grace period provides a (preferably short) period of time during which the seller can report any objections regarding the returned item. A determination is then made as to whether the seller indicates objections to the returned merchandise before expiration of the seller's grace period (step 535). If not, Gmarket refunds the buyer (step 540), closes the transaction (step 545) and records the feedback from the buyer and seller (step 550). If so, a return resolution process is initiated (step 555) during which the Gmarket service provider determines whether the returned merchandise satisfies criteria for a refund. If so, operation proceeds towards issuance of a refund to the buyer (step 540). If not, the transaction is ended without refund (step 545).
The transaction described in
Once the buyer has viewed and selected an item, the buyer determines whether to request a quote on the selected item (step 735). If not, the buyer decides whether to run another search or terminate the potential transaction (step 740). If so, the buyer enters data required to prepare a Request for Quote (RFQ) (step 745). The Gmarket system operates (step 750) to generate a standardized RFQ document 755. RFQ 755 is sent to one or more seller (step 760).
If the terms are cash, the right hand path is followed with the same steps described in connection with the embodiment of
If the terms are credit, then credit terms can be negotiated and agreed upon between the parties, preferably facilitated through the Gmarket web site (step 930). A Terms Agreement 935 is generated. In step 940, a determination is made as to whether a Letter of Credit (LOC) is required. If so, LOC 950 is provided by a financial institution (step 945).
In step 1000 (
An instructional screen that can be made available to users to explain the operation of the system and method. A detailed view of an item returned within a search result, includes a buy button operable for selection of an item in step 435. The system can further include access to multiple communication options to convey information about the selected item, such as a photo gallery, a video clip, a video conferencing system to enable live audiovisual communication between the parties, and email communication. A user can submit a bid for an item (step 440). A user interface provides confirmation of bid acceptance. Confirmation of a buyer's payment following step 450 can be provided. Notice to a seller that an item has been sold and request for shipment in connection with step 455 can be provided.
A notification to the buyer than an order has been delivered (step 470,
It is important to note that the procurement system, methods and implementation illustrated herein can be beneficially utilized for procurement of not only physical goods, but also to services. Preferably, software and systems will be configured to enable transactions for services as well.
An exemplary system for implementing the above-described processes and user interactions is also provided. Users (which may include both buyers and sellers) access the Gmarket system via Internet. The Gmarket system includes a web server, which presents the Gmarket user interface to users via Internet. Gmarket system software, implemented on a computer system, operates to execute the processes and operations described above, including but not limited to functionality supporting the steps in
An electronic warehouse database contains information describing items available for sale using the system. A transaction database contains information relating to transactions being conducted on the system. A buyer information database contains account information for users of the system seeking to make purchases. A seller information database contains account information for users of the system seeking to sell items. Another database contains other information to support the above-described operation, processes and user interface.
The foregoing description and drawings merely explain and illustrate the invention and the invention is not limited thereto except insofar as the appended claims are so limited, as those skilled in the art who have the disclosure before them will be able to make modifications and variations therein without departing from the scope of the invention.
