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Method and apparatus for automatic pricing in electronic commerce

a technology of automatic pricing and electronic commerce, applied in the field of pricing, can solve the problems of extremely high testing cost of brute force live price testing, and achieve the effects of reducing testing costs, high testing costs, and keeping testing costs low

Inactive Publication Date: 2011-12-29
GORELIK VLADIMIR +2
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  • Summary
  • Abstract
  • Description
  • Claims
  • Application Information

AI Technical Summary

Benefits of technology

The solution enables vendors to set prices that efficiently track demand changes, balance short-term and long-term gains, and provide a win for both buyers and sellers, approximating the efficiency of reverse auctions without the inconvenience of auction formats.

Problems solved by technology

Brute force live price testing could have extremely high testing costs.

Method used

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  • Method and apparatus for automatic pricing in electronic commerce
  • Method and apparatus for automatic pricing in electronic commerce
  • Method and apparatus for automatic pricing in electronic commerce

Examples

Experimental program
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Embodiment Construction

A. System Overview

[0032]Electronic commerce vendors face unique hurdles in establishing prices. First, the present day marketplace is such that a number of competitors will price items at, or below, cost. How should a vendor respond to those actions? Similarly, with shopping robots, or agents, consumers who are price conscious can easily search dozens of similar vendors for a particular good or service drastically increasing the speed at which pricing changes influence customer perceptions.

[0033]One solution is to move away from traditional, or manual, pricing towards a more automatic pricing model. This model is designed to help vendors price their products and services, appropriately, even when competitors are dropping prices or some customers are so value conscious they are using shopping robots.

[0034]Further this model is able to measure actual, current demand for a particular product—and more particularly a particular pricing unit—through live price testing. Those results can b...

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PUM

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Abstract

An automatic pricing method and apparatus for use in electronic commerce environments is described. Automatic pricing uses live price testing to estimate and measure demand for specific products—taking into account where appropriate, a vendor selected segmentation scheme. The results of live price testing are compared using a vendor selected goal function, e.g. profit maximization, to select a new price. A goal function that balances short term gains versus long term gains based on customer lifetime value is described. The live price testing approach used is designed to minimize losses due to price testing through statistical methods. Additionally, methods for distributing price testing across time so as to avoid problems caused by too many ongoing tests as well as side effects from testing are described. The selected price is a win for both purchasers and vendors as the automatic price will approximate the efficiency of a reverse auction without the inconvenience of the auction format while being goal maximizing for the vendor. For example, a vendor that normally sets prices of items for sale to customers can use embodiments of the invention to great effect.

Description

CROSS-REFERENCE TO RELATED APPLICATIONS; BENEFIT CLAIM[0001]This application claims the benefit as a Continuation of application Ser. No. 09 / 568,001, filed May 10, 2000 the entire contents of which is hereby incorporated by reference as if fully set forth herein, under 35 U.S.C. §120. The applicant(hereby rescind any disclaimer of claim scope in the parent application(s) or the prosecution history thereof and advise the USPTO that the claims in this application may be broader than any claim in the parent application(s).RELATED APPLICATIONS[0002]This application relates to the U.S. Ser. No. 09 / 567,946 filed May 10, 2000 to Vladimir Gorelik et al. entitled “Method and Apparatus for Determining Customer Lifetime Value and Setting Price.BACKGROUND OF THE INVENTION[0003]1. Field of the Invention[0004]This invention relates to the field of pricing. In particular, the invention relates to methods and apparatus for automatically adjusting pricing on items in an electronic commerce environme...

Claims

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Application Information

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Patent Type & Authority Applications(United States)
IPC IPC(8): G06Q30/00
CPCG06Q30/0211G06Q30/0283G06Q30/06G06Q30/0206G06Q30/0623G06Q30/0201G06Q30/0601
Inventor GORELIK, VLADIMIRATHERTON, ANDREW IANZUMEL, NINA BARRAMEDA
Owner GORELIK VLADIMIR