An Introduction to GoodFair
GoodFair is an eCommerce ecosystem providing end-to-end solutions in rapidly growing sectors — eCommerce, product storage, and last-mile fulfillment.
GoodFair is creating a platform combining the technical advantages of blockchain technology with the comfort of traditional online marketplaces. GoodFair aims to bring the state of eCommerce to the next generation by overcoming current challenges with blockchain technology and providing familiar shopping experiences powered by a cost effective ecosystem, an engaging marketplace, and efficient operational processes.
The transformative power of GoodFair’s technology must be understood in the context of the current e-commerce industry. In 2017, e-commerce transactions totaled 2.3 trillion dollars globally, with 409 billion dollars in the United States. This represented 9% of the retail transactions within the United States. In China, the proportion of online sales is even greater at 21.3%. In 2017, 1.6 billion individuals made an online purchase worldwide.
The staggering volume of e-commerce transactions is only rising. In 2013, e-commerce accounted for 6% of U.S. retail sales; by 2021, this number is projected to grow to 13.7%. International markets mirror this transition with a projected growth from 7.4% of all sales in 2015 to 15.5% in 2021.
Consumers have also demonstrated an increased sensitivity to shipping costs and delivery speeds. In a poll of 1052 respondents, 63% stated that they generally purchased from retailers offering free shipping, 3% were willing to pay three dollars for shipping, and 57% stated they would cancel an order if the shipping costs were too high. In addition to prioritizing free or inexpensive shipping, shipping times are increasingly becoming a key factor in purchasing decisions. About half of all online shoppers have said that same-day delivery makes them more likely to shop online, though only 15% of global retailers offer same-day delivery. Forecasts predict that $4.03 billion in goods will be ordered for same-day delivery in 2018, generating delivery fees of $1.01 billion.
Overburdened fulfillment centers are driving up Amazon’s costs, increasing as a percentage of net sales from 8.53% in 2004, to 14.20% in 2017. This is caused by a dramatic increase in eCommerce volume without a corresponding increase in number of warehouses. E-commerce sales has increased from $136B in 2007 to $389B in 2016, with a corresponding growth in warehouses of 14,603 warehouses in 2007 to 16,992 warehouses in 2016. This disproportionate increase in eCommerce sales against warehouse growth portrays the challenges faced by the warehousing industry.
Adding to the tailwinds of entering an expanding eCommerce industry, GoodFair is capturing promising cutting-edge opportunities of decentralized ledgers by providing currency agnostic solutions, opening payment options typically limited to fiat to cryptocurrencies. Examining Bitcoin alone, there were 78,671 Bitcoin wallets in 2013, growing at compound annual growth rate of 217% to 25,330,948 wallets in 2018. Furthermore, the number of transactions using Bitcoin has also grown at a rapid pace from 32,321 transactions per day peaking at 314,384 transactions per day in 2018.
Next Generation of eCommerce
Blockchain technology has been hailed as the engine for next-generation organizations and applications. As the benefits of blockchain are not the focus of this article, a non-exhaustive high-level list of benefits include cost reductions, trustless environments, and data transparency. Organizations utilizing distributed ledgers such as OpenBazaar, Storiqa, and SysCoin all provide low cost decentralized marketplaces. Leveraging decentralized ledgers, these marketplaces enjoy no transaction fees, listing fees, and transparency unprecedented in traditional marketplaces. By increasing transparency and implementing smart contracts, users transact trustlessly with the elimination of fraud.
Although there are many benefits of utilizing blockchain technology, the truth of the matter is blockchain technology is still in a nascent state with issues concerning asset liquidity and user experience. Cryptocurrencies are required on existing blockchain platforms to receive the benefits of decentralized ledgers, forcing users to hold through exchange rate volatility. E-Commerce companies utilizing blockchain technology requires users to download specific applications, manage secret keys for their wallets, balance cryptocurrency holdings, dramatically changing the user experience. Recent activity has proven the potential scale of cryptocurrencies, however, the number of transactions still represent a small fraction when compared against all transactions. The lack of liquidity makes it difficult for consumers’ demand to be met by sellers, creating liquidity issues for blockchain marketplaces. These issues pose challenges for widespread adoption of existing eCommerce companies based on blockchain technology.
Issues with Expedited Last Mile Logistics
Amazon and other leaders of eCommerce improved the experience of online shopping by setting a two day delivery standard. In spite of the impressive improvements, consumers have continued to demand faster services, but are not offered cost effective solutions for options such as same day delivery.
Shifting demands from consumers has left gaps between the offerings provided by sellers and the services received by consumers. In a study of 1292 shoppers and 270 retailers, 41% of consumers expressed that they wanted hyper-local shipping (1–3 hour shipping) while only 24% of retailers are offering this service. In the same study, 42% of consumers desired same day shipping (1 day) while only 29% of retailers offer these services. Not only are these services demanded, but consumers have illustrated they are willing to pay for these services. 38% of the participants confirmed they would pay for hyper local shipping, and 49% of respondents stated they would pay for same day shipping.
High cost for expedited last-mile fulfillment is attributed to the increase in volume of eCommerce orders, leaving traditional fulfillment methods unable to meet demands. Large centralized fulfillment centers are optimized for standard shipping times, leading to long shipping paths unsuitable for hyper local shipping. Without the ability to pass expedited packages from intermediate sorting facilities to last mile, expedited packages require low capacity vehicles on long shipping routes, increasing cost per cubic meter.
Challenges with the adoption of existing blockchain eCommerce companies are addressed by GoodFair’s blockchain technology by establishing a currency agnostic payment solution. Users can exchange with fiat currencies, Ethereum and Bitcoin without managing yet another wallet and currency for GoodFair. Users can transact with the currency of choice, while enjoying a low cost environment which is transparent and trustless. Sellers can list items on GoodFair market, charging zero revenue sharing fees. Cost reductions from decentralizing business operations such as arbitration, escrow services, and seller / item screenings subsidize revenue sharing fees seen in current e-Commerce platforms enabling sellers to offer a more competitive price point for their products.
GoodFair addresses cost issues with last-mile delivery by creating a market previously uneconomical to GoodFair’s protocols. GoodFair is addressing costly shipping by utilizing smart contracts to establish Nexus, a fulfillment network aimed at alleviating the burden of distance between the centralized warehouses and the end buyer enabling cost effective same day and hyper-local deliveries. By collecting and remitting payment and collateral transparently in smart contracts, trust is no longer required between sellers and fulfillment centers. Nexus breaks sellers’ dependence on the highly centralized warehouse network allowing sellers to build business relationships with GoodFair’s individual fulfillment centers with security.
Currency Agnostic Payment Process
GOOD tokens drives the acceptance of various currencies and permit users to engage imperceptibly with blockchain technology by acting as a bridge between the ledger and a buyer’s currency of choice. A GOOD Token moves along the following life cycle while serving in this role:
- Purchase & deposit. The consumer initiates a purchase, making a payment deposit of either fiat currency or cryptocurrency. This deposit is held off-chain by GoodFair. In the case of a cryptocurrency deposit by the consumer, GoodFair immediately liquidates the cryptocurrency to USD.
- Token Minting. GoodFair receives the deposit, minting an equivalent value of GOOD Tokens.
- SmartEscrow. Minted GOOD Tokens are placed into the on-chain SmartEscrow protocol, pending transaction verification by the consumer. After the transaction has been verified, SmartEscrow releases the GOOD Tokens to the merchant. This release is reflected on-chain in the merchant’s GOOD Token wallet.
- Exchange & burning. The merchant may at any time redeem GOOD Tokens for their equivalent value in USD. The merchant’s GOOD Token wallet reflects the loss of tokens on-chain, and the merchant’s cash account is credited in a corresponding action off-chain. GoodFair burns any GOOD tokens redeemed in this manner, preserving the 1:1 ratio of GOOD Tokens to USD held in reserve.
Built on the Ethereum blockchain, GoodFair’s smart contracts are publicly available for audit by the community. These protocols inject the integrity of on-chain protocols into trust dependent key features, enabling GoodFair to improve upon existing online marketplaces without requiring user knowledge of blockchain technology.
Core protocols operating on the Ethereum blockchain execute critical functions within the GoodFair ecosystem, bringing the transparency and immutability of blockchain technology to bear on critical trust-building functions. By integrating blockchain-based core protocols with off-chain processes, GoodFair is able to realize a hybrid system that benefits from the advances of blockchain while preserving the user experience of off-chain marketplaces.
- SmartEscrow Protocol: Controls monetary exchanges between sellers, buyers, and nodes through a combination of on-chain and off-chain transactions enabling efficient transactions of various frequency and size. In addition, SmartEscrow eliminates traditional risks by enforcing collateral collection and redistribution throughout the payment lifecycle.
- SmartTrust Protocol: An internal reputation system that provides metrics for members of the community to assess the trustworthiness of buyers, sellers, nodes and platform mediators. SmartTrust enforces a high standard of trust within the community by penalizing and removing malicious actors.
- SmartResolve Protocol: Resolves every platform conflict through a unbiased consensus voting mechanism ensuring consistent and equitable conflict resolution for every buyer, seller, and node.
GoodFair is creating a highly interactive marketplace aimed at engaging users with our platform. Below are a few features we’re developing to maximize user engagement.
- Platform Gamification. Through the incentives in the form of GOOD tokens, GoodFair creates an engaging environment by promoting the top buyers, mediators, sellers, reviewers, and nodes. GoodFair commemorates these top users and pays them from GoodFair’s community funds.
- Rebates. Sellers incentivize consumer feedback by determining a reward for buyers who confirm receipt of the item, leaving seller ratings or item reviews, or SmartResolve compensation. In cases where the seller is found to be in the wrong, the Seller can choose to repay the buyer by offering a rebate at the end of the transaction rather than opening a separate transaction for their makegood.
- Group Purchases. Services such as Groupon and Livingsocial have demonstrated the power of group purchasing as a means of lowering minimum order quantities. On GoodFair Marketplace, merchants can use the Group Purchase feature to initiate flash deals, daily deals, or list clearance products that they wish to liquidate rapidly.
- Brand Stores. GoodFair offers a solution which will enable brands to create a customized brand store for promoting their brand and products and creating an engaging experience through customized content. The brand store will benefit from all of GoodFair’s blockchain features, including GoodFair’s core protocols, authentic reviews, and fulfilment network at a 0% service fee.
Nexus improves on existing fulfillment systems filling the gap between services provided and consumer demands leveraging our proprietary protocols creating efficiencies in last-mile storage and delivery, creating significant efficiencies from GoodFair’s blockchain processes. By doing so, GoodFair Nexus delivers improved fulfillment economics for merchants and offers a pathway to future integration with developing technologies. Merchants conducting transactions on GoodFair Marketplace gain full access to low cost, industry-competitive shipping speeds through Nexus’ supply chain network.
GoodFair Nexus aims to provide cost effective solutions to fulfill hyper local and same day deliveries. Consumer demands are currently unmet by sellers, often requiring a large value order to qualify for same day deliveries.
Merchants are typically directly shipping goods to every individual customer and incurring single order shipping fees at retail prices. Merchants on GoodFair’s fulfillment network place products in close proximity to purchasers across the country, shortening the delivery path. Fulfillment centers offer on-demand delivery of goods to local purchasers, vastly improving on last-mile delivery efficiency. Nexus will be a gateway for users to access items which have same-day delivery. GoodFair aims to reduce shipping cost by creating downward price competition between third party services by providing fulfillment efficient order visibility by posting necessary information on chain.
Combining the explosive growth of eCommerce with protocols revolutionizing the marketplace and last-mile-fulfillment with the benefits of a distributed ledger and smart contracts without the limitations of cryptocurrencies, GoodFair is poised to revolutionize eCommerce. Although our initial cryptocurrencies are limited to ETH and BTC, GoodFair intends on opening payment to many more payment options. Our team is working hard, demonstrating expertise with our release of our proof of concept and landing page which illustrates our protocols and platform interface. GoodFair plans to release our white paper soon, follow us as we grow and develop the next generation of eCommerce.
Proof of Concept: https://alpha.goodfair.io/