WO2001086541A1

WO2001086541A1 - A multilingual on-line incentive-based real-time auction marketplace method and system

Info

Publication number: WO2001086541A1
Application number: PCT/US2000/028617
Authority: WO
Inventors: Samuel J. Mendez; James D. Strader
Original assignee: Orbis Online, Inc.
Priority date: 2000-05-09
Filing date: 2000-10-16
Publication date: 2001-11-15
Also published as: AU2001210906A1

Abstract

The invention may provide a multilingual on-line incentive-based real-time marketplace system and method for electronically selling, displaying and describing general merchandise, services and other real and personal property. A service provider may provide a multilingual on-line incentive-based real-time marketplace with an incentive based marketing application and affiliate referral application. The incentive based marketing system may provide the ability to aggregate and value the transaction volume represented by each membership level and individual participant in the membership genealogy in order to calculate distributions, which may be used to provide compensation to referring entities. The Incentive Based Marketing system may work in conjunction with the Affiliate Referral subsystem to track member referrals and create cascading down-line genealogies for several levels below any referring entity.

Description

A MULTILINGUAL ON-LINE INCENTIVE-BASED REAL-TIME AUCTION MARKETPLACE METHOD AND SYSTEM

BACKGROUND OF THE INVENTION

Technical Field

The invention relates generally to an incentive-based marketing method and system, and in particular, to a multilingual on-line incentive-based real-time marketplace.

Background Art

A promotional technique used by merchants is network marketing, also known as Multi-Level Marketing, or MLM for short. With this method, to aid the sale of merchants' products, merchants typically hire independent contractors. These independent contractors are also hired to assist the solicitation of other independent contractors, known as "recruits," who aid in selling the merchants' products. Each independent contractor can buy products from a merchant and use the products themselves or sell the products to others. Each independent contractor can also recruit other independent contractors who inherit the same opportunities as the person recruiting them has. This means the recruits can also purchase, use or sell the merchants' products and recruit other independent contractors. With MLM, an independent contractor earns money two ways: by selling the products they bought from the merchant to others at a markup, or by receiving a commission on their recruits' sales. When a sale is made by the recruit of an independent contractor, the independent contractor receives a commission. In this instance, the commission structure is considered to have gone through one level of sponsorship. Commissions can derive from more than one level of sponsorship, such as when the recruit of an independent contractor's recruit makes a sale. According to the structure, the independent contractor might earn a commission from that sale, considered to have gone through two levels of sponsorship. The industry has used various commission structures, some offering eight levels of sponsorship or more. All of the recruits included in an independent contractor's levels of sponsorship are regarded as the independent contractor's "down-line." The industry has used various methods of determining an independent contractor's commission rate. This includes totaling the sales generated by an independent contractor's down-line and applying a commission rate based on that figure. Often, levels are set in which this rate increases as the^i!ihd€rJeri »- ;onn of'i"«d^_n-l. X^' line-sales-volume increases.

Multi-Level Marketing previously has had many disadvantages. Merchants are burdened with having to handle an enormous amount of paperwork. This paperwork includes designing and printing enrollment forms, order forms, and catalogs, and then mailing them to potential participants. This also includes receiving and processing completed enrollment forms and order forms; and calculating, printing and then mailing commission checks to independent contractors. Merchants have been known to purchase computers to assist this process. Merchants are also often limited to including in their catalog only easily-shipped or easily-stored products. This is because the independent contractors must often pay for merchandise shipping charges and store the merchandise on their own property until it is sold to others. Any product that is too bulky or heavy would not be cost-effective for independent contractors to purchase. This is because the independent contractors would have little room for storing bulky merchandise, or with the added expense of shipping and possibly storage, there would be little, if any, room for markup on its future sales.

The independent contractors are often limited to shopping through a catalog in order to purchase the merchant's products. This has the disadvantage of an independent contractor often having to pay for shipping charges of the ordered goods. It also has the effect of causing the independent contractor frustration, as shipping often carries several problems. With shipping, the independent contractor has to wait for the merchandise to arrive. This can take days, weeks, or in some cases, even months, as the merchant may be out of stock of the selected merchandise. When the merchandise finally arrives, the independent contractor is often dissatisfied for one of several reasons. The merchandise might be damaged from shipping. It might be the wrong merchandise, as orders are often botched through improper communication. The merchandise might not be of anticipated quality, such as a dress that does not fit properly. In the likely event of this dissatisfaction, often the independent contractor must go through the ordeal of repackaging and shipping the merchandise back to the merchant. The merchant will then do one of several things. The merchant might refund the independent contractors' money, which leaves the independent contractor feeling as though the whole experience was a waste of time. In the event the merchandise was damaged in shipping, the merchant might ship the independent contractor replacement merchandise. This would force the independent contractor to wait even longer ¹ϊ ^'r tø'^;;α.esiM^l'fcerE ϊ<ϊϊ ^{ι '} to arrive. The replacement merchandise could also become damaged through shipment. If a merchant issues the independent contractor a credit line equal to the amount of the original purchase which was returned, the independent contractor is often forced to buy something else from the merchant's catalog. This poses several problems for the independent contractor. The independent contractor might not be interested in any other merchandise the merchant has to offer, since the catalogs are often limited in variety, in which case the independent contractor must purchase something that is undesirable. The price of the supplemental merchandise might not be the same as the purchase price of the original merchandise. If the supplemental merchandise price is higher, the independent contractor must spend more of his/her money than he/she originally planned to spend. If the price of the supplemental merchandise is less, the independent contractor will have money, which is not gaining interest, tied up with the merchant for an extended period of time. In other words, the independent contractor will have his/her money held by the merchant until such time when it is used toward another purchase.

With MLM, independent contractors must often store merchandise on their premises. Merchandise is usually bought in advance from a merchant by an independent contractor, who, in turn, stores the merchandise and attempts to sell the merchandise to others. Many independent contractors have not had sales training, but participate in an MLM plan because they are tempted by the high profit potential this sort of self-employment offers. As a result of their lack of proper sales training, oftentimes much of the merchandise they stocked up on can not be sold to others. Rather, it remains stored on the independent contractor's premises for an extended period of time. Eventually, to become rid of the unwanted merchandise, the independent contractor must often do one of a few undesirable things. He must either give the merchandise away, sell it at a greatly reduced price, use it himself, or throw it away. This has had the unsavory result of depleting an independent contractor's cash flow. It has also resulted in many independent contractors, after a certain degree of exposure to the program, often becoming jaded with MLM, subsequently giving up self-employment with MLM forever and discouraging others from participating in any MLM plan also. Catalogs of merchant's products or services have also been bought and given to, or sold to others by independent contractors. This can alleviate the need for an independent contractor to stock up on merchandise, but requires the independent contractor to purchase the catalogs. Oftentimes, a shopper does not want to pay for a catalog, as he is ndf^'sted¹ if there is

catalog that he even wants to buy. Independent contractors, on the other hand, do not want to give the catalogs out for free. When the independent contractor gives the catalog out for free, the independent contractor does not recoup the investment he made to acquire the catalog. This results in an independent contractor's cash flow becoming depleted. If the shopper does buy the catalog and then buys something from the catalog, the total cost of what was spent to acquire the merchandise is greater than the list price of the merchandise. Add on shipping costs that the purchaser must pay and the total cost to acquire the merchandise rises substantially. Usually, the resulting price is equal to, and often greater than, the price of comparable merchandise found in a retail store, or especially a discount store. Shoppers become discouraged upon having to pay an often higher-than-retail price for the merchandise from the catalog and being subjected to the problems associated with shipping, as mentioned previously. This leads most shoppers to avoid purchasing through these catalogs. This, in turn, results in minimal sales for the independent contractor, who again, after a certain degree of exposure to the program, often becomes jaded, gives up self-employment with MLM, and discourages others from participating in any MLM plan also.

Another method used by merchants to assist sales of their goods or services, has been the installation of incentive programs. Incentive companies have been hired in the past to install such programs. The incentive program usually entails a participant carrying a card or bearing an identification number. This card or identification number is used to keep track of a participant's transaction. With the program, participants present their cards or identification numbers when making purchases. This allows participants to accumulate credit in their respective accounts based upon various purchasing goals established by the merchant. These goals can vary, but are mainly designed to increase a participant's spending with a merchant within certain time periods. Points have been awarded to participants according to their performance under the program's rules. The points are usually converted to dollar amounts according to a formula. The dollars are then used to purchase merchandise shown in the incentive company's catalog. The dollars could also be used to earn a paid trip for the participants and perhaps a certain number of family members to a vacation spot such as Hawaii or Florida. In some cases, at either the culmination of the program or a set period within the program, the points are converted to a direct cash payment. This payment is either handed to the participant, wired to the participant's bank account or charge card, or issued to the participant as a check, money order, certificate or cou'j on'.^' If^'h -ϊϊso M ls ue'd¹ ϊd't' separate account on a participant's charge card to be used only toward the purchase of a specific merchant's goods or services.

Computer programming and data processing have often been used to assist these incentive companies with managing the operations of the program. This includes printing, issuing and mailing reports to participants, which show the credit-issuing merchant's name on the statements. These statements also show participants' earned credit to date and approaching goals. This also has included printing and issuing to participants charge cards that advertise the merchant and/or lending institution that sponsors the incentive program.

The advances in computing technology, such as fast processing speeds and large, cheap random access memory, make it possible for merchants to offer services that have not previously been feasible. This includes the prospect of planning an entire trip to a store, museum or airport, from central processing areas (such as those located in the store, airport, or travel agency, etc.), or even from the comfort of one's own home using the Internet. It also allows employees to quickly discover where what a user wants is available, and how best to tell the user to get there.

Some of the recent advances in computing have translated into efforts to produce Internet based shopping. A common approach to Internet based shopping is that of the cybermall or electronic mall. For example, MarketplaceMCI (http://www.internetmci.com) displays different merchants and provides a user with a "shopping basket" to hold their purchase record. Others include the Internet Shopping Network (http://www.internet.net), Cybershop (http://www.homeshop.com), and Virtual Vineyards (http://www.retailinfo.com). CompuServe also planned to move its Electronic Mall to the Internet. All of the systems above feature displaying merchandise and allowing the user to order on-line. Some, like Cybershop, allow the user to query across stores in interesting ways, such as by price or product description. These approaches do not involve an on-line incentive-based marketplace.

Individual stores also offer some Internet-based services. For example, J.C. Penny offers scanned images, product, and pricing information, and accommodates order taking (http://www.jcpenny.com). Other stores are using the Internet as a means of advertising, vs. ordering and shopping. For example, Wal-Mart has a site (http://www.wal-mart.com) which shows information about the company and specials. Kmart similarly offers a home page (http://www.kmart.com) showing some of the specials that are also printed in its circular. None of these approaches offer an on-line incentive-based marketplace.

E-bay and Onsale, Inc. offer a twist on Internet shopping ~ an Internet auction house - - where users bid in order to purchase merchandise. Auctions provide a popular and exciting marketplace for buying and selling property. E-bay has an on-line auction, as described at their world-wide web site http://www.ebay.com. In this auction system, bidders register and submit bids through the Internet. Items for sale are graphically displayed on the bidders' screens, in addition to the bid information for each item. Bid information is updated hourly throughout each two-week bidding session. E-bay will typically charge an up-front insertion fee or posting fee and then they also charge at the end, at the back end; that is, when you have a successful auction, what they call a final value fee. Unfortunately, E-bay' s auction has no mechanism for allowing incentive-based marketing.

In addition to the on-line auctions mention above, on-line auctions are now being conducted over the Internet. One such auction, Save the Earth Foundation, has an Artrock Auction that is described at their world-wide web site http://www.commerce.com/save_earth. To participate in the auction, bidders register and submit bids for auction items through the Internet. Bidders are notified by electronic mail when a bid higher than their own is placed on an item. The winning bidder is also contacted by electronic mail at the close of the bidding session. The Artrock Auction has no mechanism to allow incentive-based marketing.

Similarly, Christie's International describes an on-line auction at their world-wide web site http://www.christies.com. In Christie's auction, bidders register and submit bids in the same manner as the Ebay auction. Christie's on-line auction also suffers from the same disadvantage as the Ebay auction in that it has no mechanism to allow incentive-based marketing. DISCLOSURE OF THE INVENTION

A method and apparatus for providing an incentive-based on-line marketplace for conducting real-time auction services. A user may register with an on-line marketplace service provider, which may provide an incentive to buy and/or sell merchandise. The on- line marketplace service provider may provide an incentive for users to refer others to use the on-line auction services.

The on-line marketplace service provider may not charge any fees to refer users to the on-line marketplace services. Additionally, the service may not charge a fee to post an item for auction. Rather, the service may charge a user a fee when the user sells an item via the auction services (a selling fee may be charged to the seller). This fee may be divided among the on-line marketplace service provider and the users, who are registered members that have the seller listed in their genealogy tree.

In a preferred embodiment, an incentive-based marketing system (IMBS) may be an Internet relationship marketing program which gives members an opportunity to generate revenue by selling auction items and referring other members to do the same. The present method and apparatus allow a person to establish an international e-business.

In another embodiment, the incentive-based marketing method and system may work in conjunction with an affiliate referral sub-system to track member referrals and create cascading down-line genealogies for several levels below any referring entity.

An object of the present invention is to provide a marketplace service provider with the ability to track user referrals in order to provide a referral means to measure the effectiveness of the user that creates the referral. A referring entity may be a registered user of the on-line marketplace service provider, any affiliated web site or company, or any designated partner, vendor or entity. In addition, a referring entity may be an advertisement or a campaign that offers an inducement for registering with the on-line marketplace provider. The present embodiment may provide a simple means to measure the effectiveness of the ad. The system has the ability to maintain the connections between referring entities. The present system and method may also have the ability to measure how effective a user is at referring the on-line marketplace service provider to other entities. The present method and system may be able to collect and count the new membership registration volume that a user is able to generate. This may allow an on-line marketplace service provider to measure the effectiveness of a user when ranked against other users that are referring the service provider.

A method and apparatus for providing an incentive-based on-line marketplace for conducting automated on-line auction services. A user may register with an on-line marketplace service provider, which may provide an incentive to buy and/or sell merchandise via an on-line marketplace. A user does not have to be a member of the on-line marketplace to participate in the on-line auction services; however, there is an incentive to use the service. The on-line marketplace service provider may pay users to use and refer others to use the online auction services.

In a preferred embodiment, an Affiliate System may be an Internet relationship- marketing program, which gives members an opportunity to generate revenue by selling auction items and referring other members to do the same.

An object of the present invention may be to provide a method for conducting a web- browser based real-time auction. The underlying technology of the auction may be based on applets that interface with standard web browser software. Using this process, a buyer may view a chart-based graphical representation of bids while competing sellers may view a table listing of their progressive bid history. Data on each bid will be updated in real-time.

Accordingly, it is the object of the present invention to provide a method for conducting an online bidding session that may permit bidders to participate using nothing more than standard browser software. The need for browser plug-ins and separate software packages may be eliminated. Users may need only a computer, an Internet connection and freely available browser software such as Microsoft's Internet Explorer or Netscape Corporation's Navigator.

It is another object of the invention to reduce the administrative barriers that exist between buyers and sellers. Instead of lengthy review processes, buyers and sellers may register with the service provider by providing appropriate contact information, data on their corporate focus and other relevant information. Once approved, buyers and sellers may browse a list of already posted auctions or submit one of their own. Once the request for a real-time auction has been approved, sellers and buyers may receive email messages with hyperlinks that lead to the appropriate auction pages.

An object of the invention may be to provide an on-line marketplace that provides an incentive to buy and sell items.

Another object of the present invention may be to a method to build a business in a vertical manner.

Another object of the present invention may be to provide a method and apparatus to build a genealogy-based income.

Another object of the present invention may be to provide a method and apparatus to build a successful e-business.

It may be an object of the present invention to provide for the dynamic viewing of genealogy and all of the pertinent information.

The present apparatus and system may provide a service provider with the ability to track user referrals in order to measure the effectiveness of the user that creates/initiates the referrals.

The present method and system may be able to collect and count the new membership registration volume that a user is able to generate. This may allow an on-line service provider to measure the effectiveness of a user when ranked against other users that are referring the service provider.

In a preferred embodiment, the incentive-based marketing method and system may be implemented over the World Wide Web, Intranet, WAN, LAN or any other communications network. The incentive-based marketing method and system may provide the ability to aggregate and value the transaction volume represented by each membership level and individual participant in the membership genealogy in order to calculate distributions, which may be used to provide compensation to referring entities.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 shows an embodiment of the invention

FIG. 2 shows another embodiment of the invention

FIG. 3 shows another embodiment of the invention

FIG. 4A shows another embodiment of the invention

FIG. 4B shows another embodiment of the invention

FIG. 5A shows another embodiment of the invention

FIG. 5B shows another embodiment of the invention

FIG. 6A shows another embodiment of the invention

FIG. 6B shows another embodiment of the invention

FIG. 7A shows another embodiment of the invention

FIG. 7B shows another embodiment of the invention

FIG. 8A shows another embodiment of the invention

FIG. 8B shows another embodiment of the invention

FIG. 8C shows another embodiment of the invention

FIG. 8D shows another embodiment of the invention

FIG. 8E shows another embodiment of the invention

FIG. 8F shows another embodiment of the invention

FIG. 8G shows another embodiment of the invention

FIG. 9A shows another embodiment of the invention

FIG. 9B shows another embodiment of the invention

FIG. 9C shows another embodiment of the invention

FIG. 9D shows another embodiment of the invention

FIG. 9E shows another embodiment of the invention

FIG. 10A shows another embodiment of the invention

FIG. 10B shows another embodiment of the invention

FIG. 11A shows another embodiment of the invention

FIG. 11B shows another embodiment of the invention

FIG. 12 shows another embodiment of the invention

FIG. 13 shows another embodiment of the invention

FIG. 14 shows another embodiment of the invention

FIG. 15 shows another embodiment of the invention

FIG. 16 shows another embodiment of the invention

FIG. 17 shows another embodiment of the invention

FIG. 18 shows another embodiment of the invention

FIG. 19 shows another embodiment of the invention

FIG. 20 shows another embodiment of the invention

FIG. 21 shows another embodiment of the invention

FIG. 22 shows another embodiment of the invention

FIG. 23 shows another embodiment of the invention

FIG. 24 shows another embodiment of the invention FIG. 25 shows another embodiment of the invention

FIG. 26 shows another embodiment of the invention

FIG. 27 shows another embodiment of the invention

FIG. 28 shows another embodiment of the invention

FIG. 29 shows another embodiment of the invention

FIG. 30 shows another embodiment of the invention

FIG. 31 shows another embodiment of the invention

FIG. 32 shows another embodiment of the invention

FIG. 33 shows another embodiment of the invention

FIG. 34 shows another embodiment of the invention

FIG. 35 shows another embodiment of the invention

FIG. 36 shows another embodiment of the invention

FIG. 37 shows another embodiment of the invention

FIG. 38 shows another embodiment of the invention

FIG. 39 shows another embodiment of the invention

FIG. 40 shows another embodiment of the invention

FIG. 41 shows another embodiment of the invention

BEST MODE FOR CARRYING OUT THE INVENTION

In the following detailed description of the preferred embodiments, reference is made to the accompanying drawings, which form a part hereof, and in which is shown by way of illustration specific preferred embodiments in which the invention may be practiced. These embodiments are described in sufficient detail to enable those skilled in the art to practice the invention, and it is to be understood that other embodiments may be utilized and that logical, mechanical and electrical changes may be made without departing from the spirit and scope of the present invention. The following detailed description is, therefore, not to be taken in a limiting sense.

The present invention may provide a computer application, which implements a realtime multi-lingual marketplace (auction system) with a multi-level marketing incentive. A service provider may provide a method for accessing the computer application for on-line auctions through a communications network. In addition, the present invention may provide the ability for a service provider to track an independent contractor's ability and their recruit's ability to generate successful referrals. A successful referral may be when a recruit completes a sale using the service provider. Furthermore, the present invention may provide the ability for a service provider to track an affiliate's ability to generate successful referrals. A computer/computers, according to an embodiment of the present invention, may perform the operations for the computer application, which implements the real-time multilingual marketplace (auction system) with a multi-level marketing incentive. The computer may also implement the incentive based marketing application and the affiliate referral application. The computer application may be separate modules or integrated into one module. A computer(s) may be located at the service provider site, buyers/sellers site, independent contractor site and/or affiliate site. A typical computer on which the present invention may be implemented is shown in FIG. 1. Computer 10 usually includes keyboard 12, display device 14 and pointing device 16. Computer 10 may include a processor (such as the Intel Corporation PENTIUM, Cyrix K6 or Motorola 68000 series), random-access memory, read-only memory (ROM), and one or more storage devices, such as a hard disk drive, a floppy disk drive, an optical disk drive, and a tape cartridge drive. The invention is not particularly limited to a given type of computer 10. A given computer 10 is preferably a PC-compatible computer such as those manufactured and available from Gateway 2000, Inc., of North Sioux City, S.Dak., and running a version of the Microsoft Windows operating system. It is contemplated, however, that the present system would work equally well using a MACINTOSH computer or even another operating system such as a WINDOWS CE, UNIX or a JAVA based operating system, to name a few. The construction and operation of such computers are known within the art.

Monitor 14 of the computer system permits the display of information for viewing by a user of the computer. The invention is not limited to any particular type of monitor 14. Such monitors may include cathode ray tube (CRT) displays, as well as flat panel displays such as liquid crystal displays (LCD's) and super- VGA CRT displays. Each pointing device 16 permits the control of the screen pointer provided by the graphic user interface of operating system. The invention is not limited to any particular type of pointing device 16. Such pointing devices include mouses, touch pads, trackballs, remotes, and point sticks. Keyboard 12 permits textual entry into computer 10 as another input device to the computer, and typically includes a plurality of alphanumeric keys, function keys, navigation keys, cursor keys, and numeric keypad keys. However, the invention is not so particularly limited.

Computer 10 may include a communications software application, a browser, which allows a computer to access another computer over a communications medium/network. The browser may be the Microsoft Internet Explorer, developed by Microsoft Corporation. One of ordinary skill in the art, however, will recognize that numerous other types of communications software applications may also be used to implement the present invention. Such communications software could, for example, be other types of Internet browsers such as the Netscape Navigator developed by Netscape, Inc., and other communications software such as custom network browsers, two-way communications software, cable modem software, point-to-point software and the like.

The computer 10 may be a workstation, desktop computer, laptop computer, mobile computer, PDA, server, client, peer, uniprocessor or multiprocessor machine, embedded system, and/or other computer. A suitable communication networks include local area networks, metropolitan area networks, wide area networks, the Internet, or any combination thereof. "Internet" as used herein includes variations such as a private Internet, a secure Internet, a value-added network, a virtual private network, a portion of the Internet such as the World Wide Web, or an intranet. If an Internet connection is used, some security precautions may be taken in an embodiment of the invention. For example, secure servers or encryption methods may be used.

Various possible types of communication links may be employed for the communication links between the service provider, buyers/sellers and the independent contractors/affiliates. For example, the communication link may comprise a hard wired connection, a telephone connection, a satellite RF, or other wireless connection, an Internet connection, a local area network or wide area network connection, a combination of the preceding, or any other desired type of connection. Different machines can connect using different types of communication links.

The present invention provides a multi-lingual system and method for electronically selling, displaying and describing general merchandise, services and other real and personal property. As shown in FIG. 2, the present invention may display information in at least two languages simultaneously. In this example, the slogan "Sell While You Sleep." may also be displayed in Spanish "Vende Mientras Duermes." This feature enables a service provider to reach a wider audience with a single screen display and open the auctions to a world wide market. A real-time auction environment is of particular benefit to those who are interested in large "high ticket" items. Seller and buyers may be able to come together in a dynamic forum that presents all necessary bidding information in a real-time manner.

Several online auction corporations have recognized the value and attractiveness of real-time auctions and are now offering real-time auctions as a part of their services. However, the auctions offered by these companies are facilitated through the use of applications that operate outside of conventional web browser software. Users who want to participate in these auctions must first acquire the software, then install and configure it. If auctions will be viewed on more than one computer, then this lengthy process must be repeated for each computer. Once this has been completed, prospective buyers and sellers must then undergo a screening process conducted by the auction corporation.

FIG. 3 shows an embodiment of the present invention (300), service provider 310 may be connected through a communications network 320 to buyers/sellers 330, independent contractors 340 and affiliates 350. In the preferred embodiment, the independent contractors may be individuals, which have registered with the service provider's incentive based marketing system, that refer other individuals to use the real-time multi-lingual marketplace. The contractor may receive a commission/compensation when the referred individual sells an item using the real-time multi-lingual marketplace. In one embodiment of the invention, a buyer/seller may also be an independent contractor. An affiliate may be a registered member of the service provider, any affiliated website or company, or any designated partner, vendor or entity. In fact, an affiliate (referring entity) may be an advertisement or a campaign that offers an inducement for registering with the service provider, thereby providing a simple mechanism to measure the effectiveness of the ad.

When an individual connects to the real-time multi-lingual marketplace system, the service provider may display a screen, similar to the one shown in FIG. 4 A and FIG. 4B, which may provide the user with different options. For example, the user may select "Register" with service provider 420. As shown in FIGS. 5A-B and FIGS. 6A-B, the service provider may display a screen requesting that the user enter his or her name, pseudonym 520 (610), or the like, and password 530 (630), which may allow the user to interact with or "log- on" to the service provider's website. In an alternative embodiment, the user may not be required to enter a password. The user may be required to enter an e-mail address 510 (640) and contact information 540 (620). Moreover, the user may register to participate in the incentive based marketing system 550 and/or the affiliate referral system. When registering, the user may also indicate whether an IBMS member or an Affiliate referred him/her to the service provider 560. The user may enter the IBMS_Upline ID, registration page using a URL, the Affiliate Referrer ID and/or Promotion ID. FIG. 6 A and FIG. 6B show an alternative registration display. In the alternative display, a user may select the language or languages for future displays. The service provider may display a confirmation of the registration information for the user to review shown in FIG. 7 A and FIG. 7B. After reviewing the information, the user may confirm that the information was entered correctly by selecting an icon to accept the information. FIGS. 8A-G show various log-in and log-off screens that the service provider may display to the user.

FIGS. 4A-B and FIGS. 5A-B also show other options the computer application may present to a user. The display screen may provide icons to select different options. The user may select an icon, as shown that consists of an alphanumeric hyperlink. The icons may also be a buttons or tabs. The size, shape or type of icon does not limit the invention. The icons shown are for illustrative purposes only. By selecting an icon, for example, the categories icon 410 a user may activate or initiate a program that allows the user to browse the auction items by a type. Other icons may be a tutorial 430, sell items 460, services 450, featured auctions 440, hot auctions 470. It is noted that the use of the term "selected" or its derivatives in this application refers to selection by manipulation of a mouse, depression of the "enter" key on a computer keyboard, activation of a touch screen, or in any manner as would readily be appreciated by one skilled in the art.

After the registering with the service provider, the user may post items for sell over the communications network. FIGS. 9 A-E show examples of the screens that the service provider may display to the user to enter auction item information. FIGS. 10A-B show an item that has been submitted for auction. FIGS. 11A-B show an example of a screen the service provider may display to the user for general policies.

In a preferred embodiment, a user may register with an on-line marketplace service provider, which may provide an incentive to buy and sell merchandise via an on-line marketplace. If a user has register to use the service provider's incentive based marketing system application, the user/independent contractor may generate income by referring another individual to use the service provider for on-line auctions. The revenue may be generated by a selling fee, which may be charged to a seller as a percentage of the sell price. This fee may be divided among the on-line marketplace service provider and the users, who are registered members that have the seller listed in their genealogy tree. A user does not have to be register with the IBMS application to auction items. However, a user may only receive compensation when register in the IBMS application.

FIG. 12 shows an independent contractor may receive compensation from any individual in its genealogy tree, which completes a sale using the service provider. For example, Individual 1 may refer Individual 2, Individual 3 and Individual 4 to the service provider (FIG. 12). For this level of referral, Individual 1 may be a direct IBMS Up-line referrer. If one of these referred individuals sells an item using the service provider, Individual 1 may receive compensation for the referral. In addition, Individual 1 may be given credit or compensation for any successful transactions that Individual 5, Individual 6, Individual 7, Individual 8 or Individual 9 generates. Individual 2 may also receive credit or compensation for the sells generated by Individual 5. Individual 3 may also receive credit or compensation the sells generated by Individual 6, Individual 7, Individual 8 or Individual 9. Individual 6 has not register with the IBMS. Individual 6 may refer individuals to the system, however, Individual 6 may not be entitled to receive compensation or credit. Individual 6 may choose to register with the IMBS at anytime and his/her status may be update. Individual 7 may also receive credit or compensation the sells generated by Individual 8 or Individual 9. Individual 8 may also receive credit or compensation the sells generated by Individual 9. The system may track each user to determine the possible compensation. In an embodiment of the invention, commissions may be distributed to the independent contractors for successful referrals. The system may generate the checks for the independent contractors, who participate in the commissions programs.

The on-line marketplace service provider may establish qualification requirements for a member to qualify to receive the commissions/compensation accumulated during a period of time. For example, a user must be enrolled with the incentive-based marketing system. In one embodiment, affiliates and promotions may be restricted from enrolling. The service provider may require a user to sell a certain dollar amount (e.g. $100). As shown in FIG. 20, the IBMS_Sales_Threshold may track the amount a user sells during a period. In addition, a user may be required to buy at least one auction item per period. Furthermore, a user may be required to have at least 5 members who identify them as their IBMS Up-line Referrer. Other qualification requirements are possible. The above list is intended to be for illustrative purposes only and is not limiting.

When a user registers/enrolls with the service provider's incentive based marketing system, a Period_Activity table (shown in FIG. 24) may be created to capture the distribution details and payout information for members during a particular period of time. The Period_Activity record may capture the number of contributing and non-contributing independent contractors assigned to each member's contribution level. As discussed above, a user may enter a referring IBMS member's ID or an affiliate's ID during the registration process. The ID may be used to track the referrals. As new users are added to the Users table (FIG. 18), a new Period_Activity entry may be created for the active payout period regardless of whether or not the user joins the IBMS application. A complete set of new Period_Activity records and a new Payou t_Periods record may be also created for the new period. The old Period_Activity records for the prior period are used to reproduce the Member counts at each Level for the new records. Other Count and Amount fields are set to zero in the new records. Any auctions for the member that closes during an active period may have commissions distributed based on the IBMS status stored in the Users table. No distributions may be captured for any selling member auctions that occur prior to his joining IBMS.

If a member joins and enters an IBMS_Upmιe ID, the Level_l_IBMS_Members entry for the direct IBMS Upline referrer is incremented (and so on up the tree). The associated level counts for members in the chain of IBMS Up-line Referrers above the registering user are incremented. For example, the registering user's direct IBMS Up-line referrer has his/her Level_l_Members incremented by 1 (FIG. 24). In other word, the member, who referred the registering user, may have his/her count for direct referral incremented by 1 (FIG. 24). The IBMS Up-line referrer for that member has his/her Level_2_Members (Level 2 Fields) count incremented, etc. That is the member, who referred the direct IBMS Up-line referrer, may have his/her count for second level referrals incremented by 1 (FIG. 24). This method continues up the referring list. The number of levels a member may have is not limited. In a preferred embodiment, five-membership level may be utilized.

Prior to the close of an IBMS period, the data for the next period is created. This may include the Payout_Periods (FIG. 21) record and the Period_Activity records (FIG. 24). This may permit transition to the next period without the need to disable auction closures or member registration. During an IBMS period, pertinent eligibility information for a member may be stored in the member's Period_Activity record.

As shown in FIG. 12, even though non-IBMS members may not be included in the distribution of IBMS commissions, they may still join IBMS at a later time. If these non- IBMS members are linked to an IBMS Upline referrer, they may still link active IBMS members in the extended chain. For example, Individual 3 (an IBMS member) referred Individual 6 (who opted not to join). Individual 6 then referred Individual 7 (who joined IBMS). If Individual 7 stages an auction (and meets eligibility requirements), Individual 3 may receive a commission for the auction even though Individual 6 (who links the two in the tree) does not. The portion that would have been allocated to 6 may automatically revert to service provider since Individual 6 was not qualified to receive commissions.

When a pre-enrolled non-participating member joins IBMS (Individual 6), the Period_Activity record may already exists. The IBMS_Joined_On_Ts may be changed to reflect the date and time the member joined (FIG. 18). The Level n IBMS Members count for his/her IBMS Upline referrers (regardless of their participation) may each incremented to include him/her as a new participant. The proceeds of any auctions for members below him in the tree that close after he/she joined may be contribute to his/her record of potential distributions. He/she may not be eligible for any proceeds on auctions that closed prior to the date he/she actually joined the program.

When an auction is closed, the various fees and participating parties are identified for preliminary distribution of commissions. This information may be stored both in the Auctions record FIG. 19 and summarized in the Period_Activity record (if applicable). The commission amounts may not be final. Eligibility determination at period-end may disqualify a member from receiving any payout. Auction closure occurs in two stages: fee collection and distribution.

The fee collection stage identifies the fee to be charged to a seller's payment account and initiates collection. Once an auction closes, selling fees may be computed and charged to the seller's payment account (e.g. credit card, direct deposit, etc.). If the seller is not a member, the standard selling fee may be computed from the standard fee schedule and saved as the Selling_Fee in the Auctions table FIG. 19. If the seller is an IBMS member, the selling fee may be based on the IBMS fee schedual (stored as the IBMS_Gross_Commission_Pct in the Payout Control table) (FIG. 20). Since the standard fee schedule may be used as a basis for Affiliate Referral program, it may be computed for IBMS members (although it may not affect the amount charged to the seller). It may be stored separately for this purpose.

The distribution stage identifies qualification in any applicable incentive schemes and computes the actual distribution of commissions. Once the fees for an auction have been collected, the process of distributing commissions may be initiated. The auction buyer's Period_Purchases_Cnt may be incremented on his Period Activity record. The Amount for the Auction may be added to the seller's Period_Sales_Amount in his/her Period_Activity record (FIG. 24). The buyer's Period_Sales_Cnt may be also incremented. If the Seller is not an IBMS member, no IBMS commissions are computed (even though the Seller may have an IBMS Up-line Referrer). The IBMS values in the Auctions and Period Activity records are not updates (and may be null or zero). Other Commissions may be payable (e.g., for the Affiliate Referral program). The net administration commission payable to service provider may be the selling fee less any of these other commissions (if applicable).

If the seller is an IBMS member, the distributions for active levels are computed based on the selling fee and the applicable J-BMS Level percentages stored in the Payout Control table (FIG. 20). The distribution (computed for each level) may be stored in the Auctions record. In addition, the sales and distributions details are added to the Period_ Activity records for the up-line IBMS members at each level. Other commissions may also be payable (e.g., for the Affiliate Referral program). The net administration commission payable to service provider may be the selling fee less the sum of all the IBMS and other commissions (if applicable). Commission distributions to each of the levels above the seller are computed according to entries in the Payout Control table (based on the specially computed selling fee). The Shopper Id for each level may be identified using the IBMS Up-line Shopper Id (and his IBMS participation code) in the Users table beginning with the seller's. The individual level amounts and Shopper Ids are stored in the Auctions record. The Level Sales and Distribution amounts for the active up-line members are then added to each of those members' Period_Activity record. The Potential_IBMS_Distribution amount may be also updated for each of these up-line members to keep a current total of the member's potential payout.

FIG. 13 depicts an example of the distributions that may be made when the funding transaction occurs. For example, at the moment an auction closes and it may be deemed to have a successful bid, the auction close fee may be debited from a seller's credit card. Upon electronic notification of success of the transaction, the distribution percentages may be credited directly to the up-line participants based on a new table, the Payou t_Control table.

As shown in the example, the fee may be divided up between the on-line service and the people who referred the current seller. A seller sells an item that has a final selling price of

$100. There may be a special selling fee of $10. The $10 may be divided among the Internet service, which you see is $4, and the first 5 levels of referrals. The commission levels may be tiered to provide incentive to bring on new members in order to build the business vertically; in other words, the commission levels are structured to provide incentive for everyone to bring in more referrals. Different compensation scales may be provided such as

Level 1 - 30%, Level 2 - 15%, Level 3 - 10%, Level 4 - 15% and Level 5 - 30%. The service provider may determine these compensation levels.

In another example, a $1,000 auction sale may produce a selling fee of $100 (based on a 10% IBMS Gross Distribution Pet). The seller's Period_Sales increases by $1,000 and his Period_Sales_Cnt increase by 1. The member who referred the seller may have his Level_l_Sales amount increased by $1,000 and his Level_l_Distribution may be increased by $18 (the $100 Selling Fee x 18% IBMS_Lev_l_Pct). His Potential_IBMS_Distribution may also be increased by $18. The member who referred the Level 1 member may receive the Level 2 amounts and so on. If the seller is affected by the Affiliates Referral program, that commission may be computed. Net administration commission may be computed by subtracting all commissions from the selling fees. All of the distribution details are stored on the Auctions record.

Until final payout, the commission amounts record the potential distributions only. Some of these participant amounts may be redistributed to other members or revert back to service provider if the member does not establish eligibility by the time the period ends.

If an intermediate IBMS tree member is not an active member, the amount for that level in the Auctions table may be allocated directly back to service provider (Shopper Id may be changed to service provider's Id for that level). The amount that would have been allocated to the inactive member for that level may be added to the same level on service provider's Period_Activity record.

Finally, the normal service provider revenue from an auction may be computed (the selling fee minus any affiliate and/or IBMS commissions) and stored as the Net_Admin_Commission. This amount may be also added to the Period_Bonus field on service provider's Period_Activity record.

In addition to establishing and maintaining the connections between referring entities and their down-line associates, the system may be designed to aggregate cash value distributions in each participant's distribution account according to a flexible, database resident payment schedule. FIG. 14 shows examples of data fields may be added to a member records database. The "Up-line/Referring Member" field may contain the Member_Name of the entity that referred the user. This means that member records may also be created for affiliated websites, ad campaigns or any other non-human entity that may be a referring entity. The "Member ype" field may designate the type of Member and may contain for example: "A" for an Affiliate member, "I" for an Individual person Member, or "P" for a Promotion, such as a banner ad or other marketing entity.

A "Sold'V'Period Sales" field may contain the sales volume in US dollars of the participant. This field may be used to calculate aggregate volumes at each level and for audit reporting. The "Commission" field may be automatically incremented each time a successful sale yields an up-line distribution. Crediting up-line commissions and the total volume sold for each Member each time a transaction is completed is relatively straightforward using this approach since the database up-line tree can be easily parsed starting with the seller. Database pointers, indexes and other technical means may be used to maintain the chain or relationships. The challenge is that accurate calculation of down-line participants and their transaction and commission volumes is essential to the functionality of the system. We may solve this problem by creating a new view to track the structure of the genealogical trees.

As shown in FIG. 3, the relational table structure may be infinitely expandable, allowing any Member to be found as well as all the Members in the first five or N number of levels below them. Thus, in the example above, Company X is the "Top Dog" for the tree that continues through level 6, while Member6 is the "Top Dog" for the tree through level 7 and Member 7 is Top Dog for the tree through level 8 (not shown) and so on. This also provides us the ability to increase or decrease the number of down-lines below any particular Member in a single genealogy. This table allow a method for quickly selecting any member and calculating their down-line sales volumes and commissions. In addition, the service provider may query down-line sales volumes to audit the commissions to be paid to any particular Member.

The IBMS distribution and payout tables may include, for example, at FIG. 18 the User Tables. These tables may be used to identify the IBMS and affiliate structures for all users. The chart may include such things as the shopper's name, whether they are a participant in the IMBS, how their payout shall be distributed by check, VISA, Mastercard or cash. There may be a field to include the credit card number. There should be fields that identify how the user was referred and the date in which the user was referred (IBMS- UpLine, Affiliate Referral ID, Promotion ID, IBMS_Joined_onTs.).

After a period has closed, the IBMS payout process may be ran. The process may begin by validating the period sales amounts and auction distribution amounts for each member. Any errors discovered are reported with an entry into the Payou t_Errors table. Future changes may require validation of commission points as well. Next, member eligibility is then determined. Members who are not IBMS participants have a Payout Status of 'Non-Member' and receive no IBMS payout. Members meeting all on-line marketplace qualification requirements have a Payout_Status of 'Eligible'. These Members receive credit for commissions accumulated during the period. Members who do not meet the requirements have a Payout_Status of 'Ineligible' and receive no new commissions. The amounts indicated in their potential IBMS distribution are redistributed to their Up-line Members using the magic money redistribution. Affiliate members may also have payouts for their activity.

After Eligibility has been determined, magic money redistribution may be performed and the Payout Total Amounts are computed. The Payout Total Amount may be the sum of the Potential_IBMS_Payout plus the Magic_Distribution. For Ineligible Members, these two amounts offset each other and the net Payout Total Amount is zero.

After Payout Total Amounts have been calculated, the actual period Payments are determined. The Payout_Status is set based on the Payout_Control record for the applicable Member Type (always an Individual for IBMS members). If Payout_Total_Amount meets or exceeds the Payout_Threshold (e.g. $20), Payout_Status is set to 'Payout'. This amount is reported to pay the member. If Payout_Total_Amount is below the

Payout_Check_Threshold, Payout_Status is set to 'Rollover'. The Payout Total Amount is transferred to the next period Period_Activity record as the Prior_Period_Rollover. In some cases, it may be necessary to force payment of the Rollover amount. In this case it is necessary to remove the Prior_Period_Rollover from the next period Period_Activity record and set the Payout Status to 'Payout' manually.

For the Members who have a Payout_Status of 'Payout', the Payout Account Type and Payout Account Number (copied from their Users record or entered manually) are used to capture how the Payout is made. For example:

Payout Account Payout Account Payout Total

Shopper Name Type Status Amount

Andy Check Number 101 $525.03

Bob Check Number 102 $253.12

Gus VISA 9876 123456 123 $221.12

Thorn Cash Receipt 2000-05-001 $12.35 Once the actual payment has been confirmed (either by printing of the Check, confirming the credit card payment or manually), the Payout_Status is change to 'Paid'.

Once the qualification for all IBMS participants for a period has been determined, the potential payout amount for each ineligible member may redistributed by Magic Money Redistribution. The Up-line Referrers for the ineligible member may be examined to find the up to 5 Eligible members above him. If the top of the tree is reached without finding 5 Eligible referrers, only those found may receive credit for the IBMS payout being redistributed. For example, if an ineligble member has a total of 8 members above m in the tree but only 3 are eligible, only those 3 may receive a portion of his portion of the IBMS distributions. Each of the eligible members receives 20% of the ineligible member's Magic Money. If there are fewer than 5 eligible members, the service provider may receive the remaining portions.

The Period_Payout record for the Ineligible member may have the following entries:

Magic_Type = P for Paid Out

Magic_Amount = -Payout Total Amount e.g. $75.00

Magic_l_Member = Member 1 closest Up-line Referrer who is Eligible

Magic_2_Member = Member 2 next Up-line Referrer who is Eligible

Magic_3_Member = Member 3

Magic_4_Member = Member 4 could be the service provider

Magic_5_Member = Member 5 could be the service provider

The Period_Payout record for each Eligible member identified above may be updated as follows:

Magic Type R for Received Magic Amount ++Payout_Total_Amount e.g. $15.00 may be added to its value Magic _l_Member = n a not used Magic _2_Member = n/a not used Magic 3_Member = n/a not used Magic _4_Member = n/a not used Magic 5 Member = n a not used

The service provider may receive some of the redistributed money back. These amounts may be accumulated in the Magic_Amount on the service provider Period_Activity record.

The present apparatus and system may provide a marketplace service provider with the ability to track user referrals in order to measure the effectiveness of the user that creates/initiates the referrals. A referring entity may be a registered user of the on-line marketplace service provider, any affiliated website or company, or any designated partner, vendor or entity. In addition, a referring entity may be an advertisement or a campaign that offers an inducement for registering with the on-line marketplace provider. The Affiliate Referral System may provide the ability to track member referrals in order to provide referral counts as a measure of effectiveness of the source of the referral. A referring entity can be a registered member of the service provider, any affiliated website or company, or any designated partner, vendor or entity. In fact, a referring entity can be an advertisement or a campaign that offers an inducement for registering, thereby providing a simple mechanism to measure the effectiveness of the ad. In most cases, the referring entity may be a human member of the service provider community. As shown in FIG. 14, a member type designation may be store in a data field, Member Type. The service provider may use Member Type field to track different types of referring entities.

In addition to maintaining the connections between referring entities, the system may be able to aggregate and count the membership registration volume of each referring entity, resulting in a measure of effectiveness when ranked against other referring entities. Furthermore, there are two classes of affiliates that may participate in the Affiliate Referral program, sharing a percentage (or commission) of the referred registrant selling fees. A Master Affiliate may have one level of sub-affiliate. A gross commission as a percentage may be split in any ratio between the two related affiliates, so long as the maximum percentage does not exceed that percentage stated as the contract percent of the master affiliate.

The apparatus and system may have the ability to maintain the connections between referring entities. In addition, the present method and system may be able to collect and count new membership registration volume that a user may be able to generate from referrals. This method may allow an on-line marketplace service provider to measure the effectiveness of a user when ranked against other users that are referring the on-line marketplace service provider.

The on-line marketplace service provider may maintain a database, which contains member records. For example, FIG. 14 shows a member's name (10-70) and type (110). Under the member name, a company 10, a promotion 15, or a members 20 through 70 may be represented. There may be three types of members: for example, "A" for a participating Affiliate member, "I" for an Individual person, and "P" for a Promotion. The member type designation may be represented under the member type field. A promotion may be a banner ad or other marketing entity.

The Upline member/Referring member field (120) may contain the user's id of an entity that referred the member (100) to the on-line marketplace service provider. If the referring member field is empty, the member/user may be considered a Master Affiliate. On the other hand, if the Upline member Referring member field (120) has a valid id in it, the current Affiliate is considered involved in a Master/Sub-Affiliate relationship, and may be considered the Sub- Affiliate.

Furthermore, FIG. 14 shows a members commission dollars, commission points, and sales. The commission fields may be incremented each time a successful sale is recorded. This may occur in real time using such techniques as Sun Microsystems JAVA technology. Software implemented using JAVA is ideal for these environments in that it is platform form agnostic. Users of any computer platform can view and participate in a real time auction as long as they use a JAVA-capable web browser. The records can also show the sales during a certain period of time.

The master sub-affiliate relationship is easily seen in FIG. 35. Affiliate 1 is the master affiliate who refers the Sub-Affiliates 2 and 3. In addition, Affiliate 1 may be given credit for referring Individual 1. The Sub-Affiliates 2 and 3 may refer other individuals for example, Individual 2 and Individual 3. Individuals may also refer other individuals, such as Individual 3 refers individual 4 and Individual 4 refers Individual 5.

As you can see, not all individuals in the referral structure are referred directly by an affiliate. In one embodiment of the invention, an affiliate may only receive compensation for the individual that was referred directly by the affiliate. For example, Affiliate 3 may receive compensation for any sales completed by Individual 3. In this case, Affiliate 3 would not receive any compensation for sales completed by Individual 4 or Individual 5. In an alternate embodiment, Affiliate 3 may receive compensation from any individual in its genealogy tree that completes the sale. For example, if Individual 5 completed an auction transaction, the compensation could be distributed between Individual 3, Individual 4, Affiliate 1 and Affiliate 3. FIG. 34 shows the relationships to support affiliate referrals. Affiliates can refer individuals or other affiliates under the affiliates referral program. When referrals occur, counters are kept for the affiliate to determine possible compensation. The accumulators or counts may be maintained for all successful referrals as follows: counts of referrals by affiliate alone, counts of referrals by promotion and individual, counts of referrals of affiliate and promotion. Compensation may result from a sub-affiliate or an individual completing a sales transaction. A master affiliate, a sub-affiliate, or an individual may sponsor a promotion, although a promotion may also be unsponsored. The sponsor of the promotion may receive compensation from referrals that result from the promotion. In addition, several affiliates can use a single promotion. This is not shown. In this case, the affiliates may divide the compensation among the promoting affiliates. In addition, an individual may use the site even if another individual does not refer them.

The Affiliate Referral System may have internal auditing capabilities. During each period, the details of each referral may be stored. Using an audit trail, the system may be able to trace each new member's referring entity.

When new individual members/users are added to the Users table, if they entered an affiliate referrer, a Referral count entry is incremented for the active referring affiliate (or sub-affiliate). The User_Ts (the date and time the user joined) is set to reflect the date and time the member joined. This may be separate from an Incentive Based Marketing upline referrer and may be separately credited.

For example, if a user enters a registration page using a URL, the Affiliate Referrer ID, Promotion ID and/or Individual Referrer ID (as applicable) may be stored in the Users record. A Direct Referrals count may be incremented in the associated referring member's Period_Activity records. A single individual may be referred by all three entities (affiliate, promotion and/or individual). For example, a friend (Id 'JOE', Type T) may refer a registering user through the 'TOPDOG' affiliate who used the 'BLUEGJ-FF' promotion.

Commissions may be distributed to affiliates for all closed auctions conducted by members who are referred to the on-line marketplace service provider by an affiliate or sub- affiliate with an applicable contract. The distribution may be based on the Affiliate_Referrer in the Users Table for the shopper (or individual), who conducted the auction (FIG. 27). The service provider may compute the commissions for Affiliates and Sub-Affiliates, who participate in the commissions program (i.e., their contract percent is greater than zero). For example, if the Affiliate_Referrer has no sub-affiliate (i.e. he is a master affiliate), the commission may be calculated using a contract percentage for the affiliate against the standard selling fees for all individuals referred by the affiliate, per period. Otherwise, if an affiliate referrer is a sub-affiliate, commissions may be calculated using a contract percentage for the sub-affiliate against the standard selling fees for all individuals referred by the affiliate, per period. The sub- Affiliate's contract percentage represents a portion of the master Affiliate's contract percentage. The master affiliate's commission is calculated using the contract percentage for the master affiliate against the standard selling fees for all individuals referred by the affiliate, per period, and subtracting the sub-affiliate's portion of the commission (as calculated above).

Just prior to Period End, a new PayoutJPeriod record may be created. A complete set of new Affiliate_Activity records may be also created for the new period. The Affiliate_Activity records for the prior period are used to reproduce the total Member counts at each Level for the new records. All other Count and and Amount fields are set to zero.

After a time period ends, all of the counts and amounts are validated against the overall members who joined during the period. Errors are captured in the error table and the total payout amounts are recorded in the Period_Activity table for each affiliate member.

The affiliate referral system may provider different member types. For example, a direct/manual referral may occur a new member uses the regular registration process (i.e., there are no "links" to click). No affiliate may be given credit for these members. Another type of member may be an automated referral (e.g., promotions and emails). The Affiliates and Promotions for the Affiliates Referral program may be registered as members of the online service provider using the Admin Console special registration functions. The use of a Promotion by an Affiliate is also stored in the PromotionJDeployment table. When a Promotion is distributed to an Affiliate (i.e., a Banner Ad on El Universal), OR when an Email is sent, the properties of the promotion or email will contain a specially qualified URL, indicating the referring entity (either an Affiliate or Individual) and the Promotion id. For example: //http:www.eorbis.com/ Affiliate Referral greeting.html!%AID=BOB456%PID=12345 the URL parameters AID^:=BOB456 and PID=12345 will be stored in a temporary parameters table.

The user will be taken to the new Affiliate Referral Greeting Page, where they can choose to view the Affiliate Referral flash animation and register. They may browse the site at their leisure.

If they choose to register, the AID value is examined to determine whether it is an Affiliate or an Individual

If it is an Affiliate Id, the Affiliate Referrer Id is preset. This is not displayed, nor can it be changed by the member

If it is an Individual Id, it is used for IBMS referral purposes.

If the AID value is not an Affiliate Id or an Individual Id, neither program is credited with the referral. b. the PID value is examined to determine whether it is a Promotion

If it is a Promotion, the Promotion Id is preset. This is not displayed, nor can it be changed by the member

If the value is not a Promotion, the Promotion Id is unset.

Counters for any Affiliate and/or Promotion Activity are incremented as required.

In the future, the nature of compensation for referring entities may change. Therefore, the system and method design may include a "points" system of measuring referral success. By using points, different forms of compensation may be assigned to different types of referring entities. By redeeming points, referring members may get online credits towards discount shipping, free premier auction upgrades, free auctions, or other forms of credit- based compensation, while referring websites may get credit towards discount banner advertising or cash compensation. Promotion-type referring entities, such as a service provider banner ads running on commercial search engines, may gain no compensation, but may accrue points in proportion to the volume of new member registrations. This "subsystem" may particularly powerful when coupled with incentive based marketing systems

The service provider may issue 1099's for each participant who accrues more than $500 in commission fees. A simple report may be created and imported into an accounting system to automate generation of the 1099's.

FIG. 16 shows the member management screen, which may be a graphic representation of the own-line genealogies. Each registered member (or non-human affiliated referring entity) may log into a member management screen to see a count of his or her referrals. The management screen may also display the net change or percentage in the current month of the referral count and program-to-date counts. The may display the current balance in the member's points account if this approach is implemented. Affiliates and individuals could also see a report listing the effectiveness of these various banner ads and other registered promotions.

The service provider may generate reports for the affiliates/independent contractors. For example, referrals generated or commission generated year-to-date. Affiliates may also see a report listing the effectiveness of their recruits. A variety of management reports may be defined and created for internal use in order to track the success of the system. A tracking ID may be associated with an affiliate to determine which affiliates are linked to an originating affiliate. An example of the affiliates activities and statistics is shown in FIG. 36.

A variety of management reports may be defined and created for internal use in order to track the success of the system. At a minimum, it is envisioned that the service provider Management reports may include:

New Members registering with a referral ID

Total Cash payout by Genealogy

Total Cash payout by referring entity type

Total Cash payout by entity/member Total Cash Payout

10 Fastest growing IBMS Trees

10 Highest Volume IBMS Trees

Top 100 Referring entities by number of new members

10 Fastest growing referring entities Commission owed by referrer

Revenue generated by affiliate or promotion manual referrals

Revenue generated by affiliate or promotion automated referrals

Top 10 performing affiliates

Bottom 10 performing affiliates

The affiliate types and levels are shown for illustrative purposes only. The present invention is not limited to the above mentioned affiliate types and levels and may provide alternative levels and requirements. In addition, the system is not limited to the screens displayed in the appUcation. The computer application may provide different variations of the displays without changing the scope of the invention.

Claims

We claim:

1. An on-line marketplace system within a network, which shares auction information among a service provider, comprising: at least one service provider computer module whose actions are directed by software components; at least one buyer/sellers computer module whose actions are directed by software components and linked to said at least one service provider computer module; wherein the software components in these computers modules operate in concert as an online marketplace system.

2. An on-line marketplace system of claim 1 further comprising: a database containing information transmitted and received from at least one service provider computer module.

3. A method for implementing an on-line incentive program, said method comprising the steps of: providing an Intemet marketplace accessible to at least one user, via a computer system determining whether said user qualifies for compensation based on said user's response to purchase said at least one product; calculating said compensation according to a preprogrammed formula if said user qualifies for said compensation; and issuing said compensation to an account of said user if said user qualifies for said compensation.

4. The method as set forth in claim 1, further comprising the step of determining whether said user is enrolled in said marketplace.

5. The method as set forth in claim 1, further comprising the step of displaying to said user, via said computer system, said compensation earned by said user.

6. The method as set forth in claim 1, further comprising the step of permitting a user to enroll in said on-line marketplace.

7. The method as set forth in claim 1, further comprising the step of providing said user with an on-line order form for ordering a product for purchase.