A Fully Decentralized Ecommerce Marketplace with Fulfillment

Preface

I wanted to run by the community an idea I have been pondering for some time. I acknowledge decentralize blockchain technology is still in its infancy and DAO organization/voting still has a long way to go. In general I know this idea is not fully developed (yet) nor is it possible (yet), but I believe it will be doable in the future. This marketplace concept would require teams of programmers and designers years to accomplish, but I thought getting the idea out into the wild could spur some thoughts and maybe inspire the next generation of development. I am posting here because I believe in Ethereum and believe in a decentralized future. Ecommerce will always be in our future and I think we as a society need to figure out a way to decentralize it. I would love to hear thoughts and critiques on the overall concept. Its a long read, but I appreciate you taking the time and I look forward to hearing all comments.

WHITE PAPER

The purpose of this paper is to describe a truly decentralized online marketplace that benefits both buyers, sellers, and service providers. Customers will receive the best pricing and quickest delivery on items purchased while sellers will maximize profits. A DAO made up of sellers, buyers and service providers will vote on improvements to the software and all will benefit greatly.

Customers

Customers will pay a yearly fee (like a prime membership) that will go to the development treasury. These funds will be used to pay developers to make improvements to the software based on voting from the DAO. Product pricing will vary based on a customer’s reputation. Sellers can create discount tiers for customers that have good ratings. As business that customer will less likely turn into an issue or product return. It takes time to earn a better rating on the platform and therefore cannot be gamed. Essentially customers that are good and create a more trusted profile will pay less for products. Negative actors will pay more. Product reviews can only be left by customers who ordered the product (verified purchase). Sellers will have the ability to rate customers if they choose as well. Those ratings will translate to an overall rating and be displayed with their product reviews which will provide weight to the review itself. The more respected a buyer is, the more weight their product review will have. Sellers can also choose not to sell to customers with lower ratings. Customer data is never given to the seller and each customer profile is anonymous to the outside world. However, the customer can choose to open their data to advertisements that pay them directly. Sellers can pay for advertisements on per click basis and will be able to see statistics of the ads performance. The protocol will also log how often particular customers buy from ads. A seller could opt to not show advertisements to any customers that have low advertisement purchases. This will encourage customers to purchase products through advertising and incentivize sellers to only show ads to those who have a higher buy rate.

Sellers

Sellers also pay a yearly fee that goes into a development fund. On top of the yearly fee, the seller will have to post a bond that is used to encourage good behavior on the platform. The seller will have to pay for their product returns and the bond will be slashed if they don't. Additionally the bond can be slashed by posting prohibited items or products that are miscategorized or if product sizes and weights are mislabeled. Sellers will have to ensure the bond amount exceeds their account minimum which will be automatically adjusted based on their seller performance and their product return rate. All products will be barcoded and tracked from start to finish. Labels will be auto generated by the protocol and will contain relevant product information including the product size and weight. The labels will be scannable on a phone and will be scanned by each service provider making all products fully trackable.

Fulfillment

Sellers will send their products to fulfillment centers. Anyone can sign up to be a fulfillment center. Other sellers, brand new companies and people that have extra garage space or companies with extra floor space. They must put up a bond before receiving products. The bond amount is based on a percentage of the cost of the inventory being sent to them but can be greater than the protocol requires. The protocol will automatically assign seller's products to the various locations based on past sales and future predictions. A large company may pop up that can fulfill millions of dollars’ worth of inventory while smaller garage outfits my only hold a few hundred dollars’ worth of product. If products are lost, stolen or otherwise are not shipped on time, all or part of the bond is slashed to cover the cost. Furthermore, if the fulfillment center has no issues, they will be paid monthly based on their bond amount and performance. The more money in bond is posted (up to a maximum amount), the more rewards they will make. The money paid to fulfillment centers will come from a percentage of product sales (across all products sold on the website) & a fee for each specific product they are storing based on the size and weight of product in their warehouse (paid by the seller of that product). Sellers will be incentivized to either sell the product quickly or recall it as to not pay for inventory that doesn’t sell. If more fulfillment centers are needed in specific locations, then more money will be paid to existing fulfillment centers in those locations incentivizing new fulfillment centers. Alternatively, less money will be paid if there are too many in a particular location. Fulfillment centers can be rated by delivery drivers (both pickup and drop-off) and will earn a reputation rating. Their fulfillment service performance will also affect their rating. This rating can be used by sellers to decide who can receive their products. (Sellers will not know which fulfillment location receives their products, but can adjust their minimum rating requirements).

Drivers

Drivers must also put up a bond. Lost or stolen items will penalize the bond. Drivers will pick up at seller locations &/or fulfillment centers, scan the items into their vehicles and deliver the packages directly to the fulfilment center or to the customer. Packages will be tracked through cell phone GPS. Each product can be tracked on the customer’s and seller's phone. The driver will take an image of the package delivered. Once delivered the driver will be paid based on the mileage driven and bond amount. That payment will come from a percentage of product sales across all products. Drivers can also be rated by sellers, fulfilment centers and customers and must maintain a positive rating to continue driving. They will be able to work their own hours and can specify the max size of products they can deliver. Fulfillment centers may choose to both fulfill and drive.

Oracles

If a driver or fulfilment center believes a package dimension or weight is incorrect, they can challenge it which will require a 3rd party oracle service to document and determine who is correct. Whoever is in the wrong will have their bond slashed. *More thought required here... Oracles would also need to be responsible for damaged goods.

*Consideration: For those with little upfront capital, perhaps bonds can be in the form of property such as real-estate or vehicles? (NFTs).