Buyer-Driven Auction System with Deducted Bids
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Solution Overview
Problem
Conventional auction systems favor the seller, leading to unilateral benefits where buyers pay higher than market prices and face limited negotiation flexibility, with sellers paying commissions that are passed on to buyers.
Innovation Solution
An auction system that allows buyers to input bids with a tendered amount deducted each time, setting a starting price, limited bids, and an end time, where the buyer with the lowest bid wins, and the auction system manages commissions to ensure fair pricing for all parties.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If the seller proposes a starting price in conventional auctions, then the seller can set a minimum acceptable price, but the buyer has to pay higher than market prices and faces limited negotiation flexibility
Solution Approach 1:
The patent inverts the conventional auction mechanism by allowing buyers to propose prices instead of sellers setting starting prices. Buyers submit bid prices for items, and the auction system automatically processes these bids to determine winners, eliminating the need for sellers to set rigid starting prices while giving buyers full negotiation flexibility.
2Productivity
If the seller receives a bidding price and pays commission to the auction system manager, then the auction system can operate, but the commission is shifted to the buyer resulting in higher prices
Solution Approach 1:
The patent implements a commission-free auction model where the auction system operates without charging sellers commissions. The system is sustained through alternative means such as optional buyer premiums or advertising revenue, eliminating the need to shift commission costs to buyers and thereby reducing final prices.
3Reliability
If the auction concludes with the supreme bid as the bidding price, then the seller achieves expected selling price, but the buyer pays beyond seller's expectations resulting in unilateral benefit
Solution Approach 1:
The patent changes the pricing parameter from seller-determined starting prices to buyer-proposed bid prices. The auction system processes multiple buyer bids and determines the winning bid based on predefined criteria, ensuring the final price reflects market demand while preventing excessive pricing beyond seller expectations through automated bid validation against seller reserves.
4Reliability
If many buyers make competitive bids in conventional auctions, then the seller can achieve higher selling price, but the buyer has to pay increasingly higher prices
Solution Approach 1:
The patent replaces the mechanical bidding process of conventional auctions with an automated electronic bid processing system. Buyers submit bids electronically, and the system automatically evaluates and processes these bids according to predetermined rules, eliminating the need for progressively higher bids while still achieving seller price expectations through efficient bid matching.
Data Source
AI summary
The present invention provides an auction method and system, that is, a seller proposes an expected selling price of an item in a tender offered by the seller and the item is announced and bid on the auction system provided by the manager of auction system, and a end time and a number of bids are set. Many buyers make bids by haggling the price down and a certain tendered bid with every bid is paid, and a bid-winner is a buyer who makes a “lowest price” and “only one” bid when the tender is concluded. The bid-winner is satisfied by buying the item at a low price, the selling price of the item offered by the seller and a commission of the auction system manager are obtained from total tendered bids of total bids and a bidding price by the bid-winner to satisfy three parties, such as the bid-winner, seller and auction system manager.