System and method for electronic trading and delivery of a commoditized product

Abstract

The present invention provides a system and method for trading of a commoditized product through a distributed network of computers, and for delivering the commoditized products after the trade. The system includes an order matching routine, a payment routine, a product qualification routine, and a distribution routine. The invention provides for secure electronic trading of a commoditized product through a hub centric platform that provides for a real order exchange in a real time environment, allows individual buyers and sellers to remain anonymous to each other, eliminates size or volume as a means of discrimination for transaction, and maximizes distribution efficiency.

Description

CROSS REFERENCE TO RELATED APPLICATION[0001]This application is a continuation of U.S. application Ser. No. 09 / 860,134, filed May 17, 2001, which claims the benefit of U.S. Provisional Application No. 60 / 204,650, filed May 17, 2000.TECHNICAL FIELD[0002]This invention relates generally to the field of electronic trading and, more particularly, to providing secure electronic trading of a commoditized product through a hub centric platform that provides for a real order exchange in a real time environment, allows individual buyers and sellers to remain anonymous to each other, eliminates size or volume as a means of discrimination for transaction, qualifies products, and maximizes distribution efficiency.BACKGROUND OF THE INVENTION[0003]Establishing a buyer seller relationship is an essential step in commerce. The seller can attract buyers through advertising, direct solicitation, or through the sales activities of brokers and buyers. Currently, sellers can solicit buyers through tradi...

AI Technical Summary

Benefits of technology

[0013]Trading efficiency is apparent because an individual buyer that wants to conduct ten different trades or buy ten different units of a product, has the ability to match orders against ten different parties of a platform to have the advantage of dealing with only one transaction, the transaction with the hub. The orders will be matched with the 10 most competitive offers, without shopping in several different locations. A seller who would not normally entertain a transaction with a small player is now selling to several small buyers in one transaction. The hub centric model levels the playing field and opens up channels of trade previously not profitable. The seller does not have to ship the product to 10 different buyers, or open ten different accounts.

[0014]Buyers do not have to search for and qualify each potential seller. Buyers now have the capability of accumulating any number of orders that match with any number of sellers without the burden of establishing an equal number of relationships. Now, only one relationship would need to be established and maintained with the hub. Distribution efficiency is attained by shipping several different orders through one shipment. For example, a builder purchases 3 windows, 25 nuts, 25 bolts and 15 4 by 8 sheets of plywood, and 4 pallets of roofing shingles resulting from orders matched to 20 different sellers. All can be shipped in one shipment. The same is true for a buyer purchasing 25 gold coins at $270.00 per ounce, where there were 2 different sellers, one selling 20 coins and one selling 5 coins. In both cases of the builder and the coin purchaser, one transaction was implemented and one shipment is sent at a dramatic decrease of transaction costs to all parties involved.

[0015]Sellers do not have to advertise to establish new relationships and they have the ability to view all these orders in the market and decide if they want to place a matching order or place another order in the market. It is possible to know the depth of the market for each product and neither the buyer or seller need to assume the risk of credibility of the other party in the transaction because it is assumed by the hub. In addition, sellers remain anonymous to other members. For example, a seller now has the ability to place one order for 1000 1 / 10 ounce American Gold Eagle coins valued at $30 each. The order might match with 1000 different buyers in 1000 different locations. The seller would be able to send one shipment to the hub at a cost of approximately $25.00 and receive one payment from the hub for $30,000 less a small clearing fee. Obviously, this ability to efficiently access the market would dramatically decrease their transaction cost.

[0019]In other aspects, further services can be offered from sub-hubs that link to the hub centric model. For instance, when catalogue sales are tied to the hub centric model or one of the sub hubs, the price is constantly updated from the link to the market for that specific product and the margin is built in or defined by the catalog operator. Therefore, it isn't necessary to manually update the catalogue inventory at specific intervals because it is done every time the market price changes. Furthermore, a catalog order can now be immediately fulfilled by initiating an immediate market order for the exact product sold. This system would allow for continuous real time pricing and fulfillment of catalog orders 24 hours daily, 7 days a week, 365 day a year.

Problems solved by technology

The hub centric model levels the playing field and opens up channels of trade previously not profitable.

Obviously, this ability to efficiently access the market would dramatically decrease their transaction cost.

Images