Demand Aggregation System for Buyer-Specified Goods
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Solution Overview
Problem
Consumers and small organizations lack the bargaining power to minimize seller surplus when purchasing goods and services due to limited knowledge, skills, and resources, preventing them from aggregating demand and specifying requirements to achieve economies of scale.
Innovation Solution
A system that enables buyers to aggregate knowledge, specify requirements, features, and terms for goods and services, solicit competing bids from sellers, and aggregate demand to reduce prices, thereby minimizing seller surplus.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Quantity of substance
If consumers and small organizations purchase goods and services individually, then they can make purchases, but they lack bargaining power and cannot minimize seller surplus
Solution Approach 1:
The patent combines the purchasing power of multiple consumers and small organizations into a unified aggregate demand through a centralized system. The system merges individual purchase requests into a consolidated RFQ that is sent to sellers, allowing the group to negotiate as a single entity with significant bargaining power, thereby minimizing seller surplus while maintaining ease of operation for individual users.
2Quantity of substance
If buyers aggregate demand to achieve economies of scale, then they can reduce prices, but they need to specify requirements and features which increases complexity
Solution Approach 1:
The system enables buyers to self-service by allowing them to specify their own requirements, features, and terms through an intuitive interface. The system automatically processes these specifications, aggregates them with other buyers' requirements, and presents consolidated RFQs to sellers. This self-service approach reduces the need for complex manual negotiation while still achieving economies of scale through aggregated demand.
3Loss of information
If sellers provide detailed quotes and proposals, then buyers can make informed decisions, but the process becomes time-consuming and resource-intensive
Solution Approach 1:
The system performs preliminary action by pre-processing and consolidating buyer requirements into standardized RFQ formats before sellers receive them. The system pre-aggregates demand, pre-specifies requirements, and pre-prepares comparison tools, so that when sellers respond with detailed quotes, the information can be immediately processed and compared without time-consuming manual analysis. This preliminary preparation maintains information completeness while significantly reducing transaction time.
Data Source
AI summary
The present invention is a method and apparatus for buyers to specify goods and services then aggregate demand to reduce price and minimize seller surplus. This enables consumers and small organizations to specify and obtain goods and services on terms usually available only to large organizations. An author can draft a RFQ or RFP then solicit comments and endorsements from opinion leaders who influence demand. The author will then publish the RFQ or RFP globally to prospective buyers to solicit binding commitments then offer the RFQ or RFP globally to prospective sellers to solicit binding bids. As the bid price declines the number of buyers will increase motivating a further reduction in bid price. The author can accept or reject each bid or make a counter-offer. If a bid is accepted, payment is exchanged for the specified goods and services.