slide 1 - southern rural development center || discovering new
TRANSCRIPT
A Beginners Guide to e-Commerce: Tools for Profit
Extension Worker Training
Kimball P.Marshall, Ph.D., Alcorn State University [email protected]
Ilya Smolyaninov, Alcorn State UniversityIgor Georgievskii, Alcorn State University
Leigh Junkin, Alcorn State UniversityMarch 15, 2008
Chapter 1: Introduction – Objective, Premises, and Content of this Training
Manual Objective Provide guidance to Extension workers to encourage
rural people to begin small-scale Internet-based e-Commerce activities
Premises Rural populations must have confidence in their ability to
use e-Commerce for personal goals. Extension workers must encourage this confidence and
provide support as skills are developed. Expectancy and Locus of Control theories provide
theoretical frameworks for building confidence in rural populations who are just beginning internet businesses
Existing e-Commerce private sector sites provide opportunities for all skill levels to enter e-Commerce
Chapter 1: Slide 1
Content of Remaining Chapters
Chapter 1: Slide 2
Chapter 2 Explains how expectancy theory and locus of control theory can be applied to rural populations that might have limited internet skills.
Chapter 3 Provides success stories of using e-Commerce to sell rural life skills products
Chapter 4 Provides guidance identifying rural life skills products appropriate for e-Commerce
Chapter 5 Introduces simple approaches to e-Commerce such as selling products on Internet auction sites
Chapter 6 Provides guidance in basic personal finance management skills for entering e-Commerce
Chapter 7 Reviews what has been learned and encourages actions, evaluations, and feedback
Chapter 2: Building Confidence – Expectancy and Locus of Control Theories of Motivation
Rural populations may face many e-Commerce barriers Lack of information and experience Lack of knowledge about similar people Lack of role models
Two key theories of managerial psychology can help clients achieve goals Expectancy Theory Locus of Control Theory
Chapter 2: Slide 1
Expectancy Theory involves establishing three basic beliefs: The individual must believe that he or she can perform the
required tasks. The individual must believe that performing the tasks
specified will lead to the intended results of the task. The individual must believe that, as a result of successfully
achieving the desired outcomes, the individual will achieve the reward that the individual desires.
Chapter 2: Slide 2
Expectancy Theory
Locus of Control refers to whether an individual perceives himself or herself as having the ability to achieve personal goals or whether the individual perceives their fate as controlled by external conditions
Internal locus of control
You believe you can set and achieve your own
goals
External locus of control
You believe you must depend on others to set
and fulfill goals
Chapter 2: Slide 3
Locus of Control Theory
Locus of Control Theory Expectancy T
heory
Self Reliance
Chapter 2: Slide 4
Persons with an internal locus of control
Have confidence in their ability to perform desired tasks Recognize that this ability allows them to achieve personal
goals
Persons with an external locus of control
Might not believe that they can accomplish the desired tasks
Lack confidence in their ability to achieve personal goals
The Extension worker’s challenge is to build clients’ confidence
In their goals In their ability to achieve their goals In their ability to perform the necessary e-Commerce tasks
Chapter 2: Slide 5
Challenges Facing Rural e-Commerce Beginners
Chapter 2: Slide 6
Explore clients’ desires for financial, social and psychological rewards from self-owned business ventures
Free flowing discussions with groups of clients and extension workers can help clients identify desired rewards (financial, social and psychological)
All members of the group should be encouraged to share their ideas with one another
Explore clients’ awareness of neighbors who produce and sell products on a small scale for “extra cash”
Entrepreneurial small farmers who engage in truck farming activities
People who participate in local farmers markets Persons who are known to make special products such as
jams, jellies, toys, quilts or other craft products
Discussion Topics and Exercises
Chapter 3. Microenterprise Success Stories from Rural Communities
Success stories will Build confidence Motivate Stimulate vision Provide reference groups for beginning clients
Key success story illustrations include Oyster Creek Mushroom Company Indian Village
Chapter 3: Slide 1
Chapter 3: Slide 2
Examples of rural, microenterprise e-Commerce help people understand that
rural life skills have value and that their products can be sold
through e-Commerce
Oyster Creek Mushroom CompanyStrategy in Action
Oyster Creek Mushroom Company of Damariscotta, Maine shows how e-Commerce can serve specialty food niche markets. The Web site explains that the company grows “the very best” Shiitake Mushrooms, as well as a variety of fresh wild mushrooms, and offers dried mushrooms, mushroom powders, flavored mushroom oils, and gift boxes. The site also tells the owners’ personal story, educates customers about wild mushrooms, offers recipes, and allows customers to purchase online.
Chapter 3: Slide 3
www.oystercreekmushroom.com
Chapter 3: Slide 4
www.oystercreekmushroom.com
Reproduced with permission from Dan Heydon, Oyster Creek Mushroom Company
Indian VillageStrategy in Action
One of the most interesting rural e-Commerce Web sites is www.IndianVillage.com, an online shopping mall with many links to Indian related web sites such as Durango Silver Company that offers turquoise jewelry and cabochons through its eBay store. Other IndianVillage.com Web site links displays American Indian artisans offering pottery, basketry, textiles, beadwork and Indian jewelry.
Chapter 3: Slide 5
www.indianvillage.com
Chapter 3: Slide 6
www.indianvillage.com
Reproduced with permission from John Hartman, Durango Silver Company
Seek local area success stories from clients Identify family members, neighbors, work colleagues, and
friends who have sold products on the Internet Ask questions such as
• How did they do it?• What auction site(s) do they know about?• Did they make money?
Review Web pages success stories Print or display Web pages Ask clients to think of products they might sell Discuss costs involved
• Time• Supplies
Compare prices of similar products being sold on the Internet• With client, search Internet stores and online auctions
Chapter 3: Slide 7
Discussion Topics and Exercises
Chapter 4. Valuing Rural Life Skills and Products
Chapter 4: Slide 1
Rural clients need to recognize the market value of his or her skills and the products they can produce
Common Rural Life Skills
A variety of job skills can produce marketable products appropriate for high-margin e-Commerce sales: Food processing Fabric crafts Carpentry and wood working Visual arts Music Book publishing
Chapter 4: Slide 2
Jams, jellies, candies, relishes “Home grown” or “gourmet” foods
Chapter 4: Slide 3
Food Processing
Extension workers can help with health regulations and licenses
Sewing Knitting Crocheting Quilting Leather goods Embroidery Fabric toys
Chapter 4: Slide 4
Fabric Crafts
Furniture Toys Art objects Yard décor Dollhouses Mailboxes
Chapter 4: Slide 5
Carpentry and Woodworking
Painting Photography Sculpture
Clay Metal Ceramic Wood
Pottery Decorative Functional
Chapter 4: Slide 6
Visual Arts
Independent artists Musical groups Church choirs
Chapter 4: Slide 7
Music
Rural authors Cultural or historical organizations Club fund raisers Genealogical materials
Chapter 4: Slide 8
Book Publishing
Discover the clients’ skills and products Products that were made as presents or to use at home
Explore market potentials for client-made products Seek similar products on Internet auction sites Note final prices and bid patterns Observe intensity of bid activity in the final hour of the
auction Note number of different sellers offering similar products
Chapter 4: Slide 9
Discussion Topics and Exercises
Chapter 5: Slide 1
Chapter 5: Simple E-Commerce
Approaches for Getting Started
Online auction and shopping Websites are where people and businesses buy and sell goods and services worldwide
Things Clients Need to Know About Selling Online Obtain Internet access and an e-mail address Register as a seller on an Internet auction site Establish a payment system to receive your money Create a listing to offer your product Actively sell your product during the offering time Arrange payment and shipping Buyer and seller feedback through the Internet auction site
Chapter 5: Slide 2
Obtain Internet Access and an E-mail Address
Free Internet access is often available in the community Free e-mail accounts are available through several reputable
internet sites
Chapter 5: Slide 3
Register as a Seller
Basic Steps:
Enter basic information
Choose your User ID and password
Click on the register link at the top of most Internet auction pages
Get a confirmation e-mail
Chapter 5: Slide 4
Establish a Payment System
Requirements for efficient, secure sales:
Local bank account to receive payments
Secure payment method for customers
– PayPal (https://www.paypal.com/)
Chapter 5: Slide 5
Create a Listing
Decide what to sell Complete online listing form Auction format
Fixed price format Classified ad format “Store” format
Select a category Specify a title Write a description Take digital photographs Beginning and ending times for the auction Other listing information
Chapter 5: Slide 6
Sell the Product
Monitor the process regularly Check e-mail and the auction
Communicate with interested buyers Reply to information requests quickly
Promptly close the sale Notify winning bidder Confirm purchase
Chapter 5: Slide 7
Payment and Shipping Monitor payment method
Ship product when payment is received
Pack product properly
Insure the product
Get a tracking number
Use a reputable carrier USPS UPS FedEx DHL
Chapter 5: Slide 8
Buyer and Seller Feedback
Use the auction site process for buyer and seller feedback
Feedback is important to create a trustworthy online auction community
Trust builds sales
Chapter 5: Slide 9
Chapter 5: Slide 10
E-CommerceCheck-sheet,
Sales Listing Worksheet, and
Sales Log
Chapter 5: Slide 11
Discussion Topics and Exercises
Work with clients to identify free computer and e-mail access resources
Churches, public libraries, schools Ask friends and relatives for assistance Demonstrate how to use e-mail and the Internet
Demonstrate Internet auctions with clients who are beginners.
Perform searches Monitor auction activity Determine shipping options and costs Calculate realistic prices for products to be sold
Chapter 5: Slide 12
Chapter 6: Financial Literacy, Records, Taxes and Internet Transactions
Chapter 6: Slide 1
The Extension worker should help the client develop basic financial literacy skills needed for e-Commerce
Basic recordkeeping
Sales tax
Income tax
How to get paid?
Simple accounting approaches of keeping records Use IRS Schedule C as template Help client organize simple ledger
Chapter 6: Slide 2
Recordkeeping
Schedule C
Chapter 6: Slide 3
Chapter 6: Slide 4
Simple Ledgers
Sales Taxes
Consult with state tax authority to determine current policies
Sales tax may be state, county, or city specific Most states do not require the Internet seller to pay sales
tax on out-of-state sales
Local Extension worker assistance will be important
Assist with setting up a sales tax account if necessary
Chapter 6: Slide 5
Personal Income Taxes Profits from e-Commerce sales are subject to taxes
Federal, state, and local income taxes Self-employment taxes
Portion of e-Commerce revenues should be set aside in a bank account
Forms to become familiar with
IRS Form 1040 Schedule C IRS Schedule SE State income tax form (state-dependent)
Again, local Extension worker assistance will be important
Chapter 6: Slide 6
How to Get Paid: The Need for a Basic Bank Checking Account and Third Party Payment System
Important challenge is to encourage clients to develop trust in credit and banking systems
Bank checking account is critical for e-Commerce selling
PayPal third party payment account is strongly advised
Provides a safe and secure method to purchase goods
Speeds up the seller’s receipt of funds from a sale
Bank, PayPal, and shipping fees should be taken into consideration when setting product prices
Chapter 6: Slide 7
Chapter 6: Slide 8
Discussion Topics and Exercises Financial literacy discussions
Discuss how client feels about banks and payment systems Discuss client’s current method of handling personal
finances Include information about credit and interest rates See the Financial Fitness Quiz at
http://njaes.rutgers.edu/money/ffquiz
The need for basic recordkeeping
Clients should work in groups to review the IRS Schedule C (1040 form)
Keeping good records is critical to the success of any business
Chapter 7: Now Let’s Get Started
We have addressed these key issues…
Expectancy and Locus of Control Theories e-Commerce success stories Common rural life skills can become marketable products Steps to begin e-Commerce activity Financial management issues
Let’s bring these opportunities to our Clients!
Chapter 7: Slide 1
Chapter 7: Slide 2
A Trainer’s Checklist for Introducing E-Commerce to Clients
Evaluation
Evaluation is important to ensure that the training program is effective and to provide for continuous improvement. Evaluation forms are included in the manual. Thank you for taking the time to see that they are completed.
Chapter 7: Slide 3