A Beginners Guide to e-Commerce Tools for Profit Extension by tls14265


									A Beginners Guide to e-Commerce:
         Tools for Profit

   Extension Worker Training

      Kimball P.Marshall, Ph.D., Alcorn State University
              Ilya Smolyaninov, Alcorn State University
              Igor Georgievskii, Alcorn State University
                   Leigh Junkin, Alcorn State University
                                                March 15, 2008
      Chapter 1: Introduction – Objective,
    Premises, and Content of this Training
   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 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 1: Slide 2
       Chapter 2: Building Confidence –
       Expectancy and Locus of Control
           Theories of Motivation
   Rural populations may face many e-Commerce
      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
   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
                 Locus of Control 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     External locus of control
     You believe you can set        You believe you must
      and achieve your own         depend on others to set
              goals                   and fulfill goals

                                                       Chapter 2: Slide 3
Self Reliance

                Chapter 2: Slide 4
Challenges Facing Rural e-Commerce Beginners
   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
   Persons with an external locus of control
       Might not believe that they can accomplish the desired
       Lack confidence in their ability to achieve personal goals
   The Extension worker’s challenge is to build clients’
       In their goals
       In their ability to achieve their goals
       In their ability to perform the necessary e-Commerce tasks

                                                            Chapter 2: Slide 5
           Discussion Topics and Exercises
   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
       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

                                                          Chapter 2: Slide 6
    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
        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

                                    Chapter 3: Slide 2
    Oyster Creek Mushroom Company
                 Strategy 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

Reproduced with permission from Dan Heydon, Oyster Creek Mushroom Company
                                                                            Chapter 3: Slide 4
                   Indian Village
                  Strategy 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
Reproduced with permission from John Hartman, Durango Silver Company
                                                                       Chapter 3: Slide 6
            Discussion Topics and Exercises
   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
 Chapter 4. Valuing Rural Life Skills and
Rural clients need to recognize the market value of his or her
skills and the products they can produce

                                                       Chapter 4: Slide 1
                Common Rural Life Skills

   A variety of job skills can produce
    marketable products appropriate
    for high-margin e-Commerce
      Food processing

      Fabric crafts

      Carpentry and wood working

      Visual arts

      Music

      Book publishing

                                           Chapter 4: Slide 2
                    Food Processing
       Jams, jellies, candies, relishes
       “Home grown” or “gourmet” foods

Extension workers can help with health regulations and licenses

                                                     Chapter 4: Slide 3
Fabric Crafts

   Sewing
   Knitting
   Crocheting
   Quilting
   Leather goods
   Embroidery
   Fabric toys

                    Chapter 4: Slide 4
Carpentry and Woodworking

         Furniture
         Toys
         Art objects
         Yard décor
         Dollhouses
         Mailboxes

                            Chapter 4: Slide 5
Visual Arts

                 Painting
                 Photography
                 Sculpture
                    Clay

                    Metal

                    Ceramic

                    Wood

                 Pottery
                    Decorative

                    Functional

                         Chapter 4: Slide 6

       Independent artists
       Musical groups
       Church choirs

                        Chapter 4: Slide 7
        Book Publishing

   Rural authors
   Cultural or historical organizations
   Club fund raisers
   Genealogical materials

                                           Chapter 4: Slide 8
          Discussion Topics and Exercises
   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
      Note number of different sellers offering similar products

                                                       Chapter 4: Slide 9
    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
                                                Chapter 5: Slide 1
    Things Clients Need to Know About Selling
   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
      Local bank account to receive
      Secure payment method for
       –   PayPal

                                         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
 Sales Listing
Worksheet, and
  Sales Log

                 Chapter 5: Slide 10
Chapter 5: Slide 11
           Discussion Topics and Exercises
   Work with clients to identify free computer and e-mail access
       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
       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

   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?

                                                       Chapter 6: Slide 1

   Simple accounting approaches of keeping records
   Use IRS Schedule C as template
   Help client organize simple ledger

                                                      Chapter 6: Slide 2
Schedule C

             Chapter 6: Slide 3
Simple Ledgers

                 Chapter 6: Slide 4
                          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

                                                         Chapter 6: Slide 6
How to Get Paid: The Need for a Basic Bank
Checking Account and Third Party Payment
          Important challenge is to encourage clients to
           develop trust in credit and banking systems
          Bank checking account is critical for e-Commerce
          PayPal third party payment account is strongly
              Provides a safe and secure method to
               purchase goods
              Speeds up the seller’s receipt of funds from a
          Bank, PayPal, and shipping fees should be taken
           into consideration when setting product prices

                                                  Chapter 6: Slide 7
            Discussion Topics and Exercises
   Financial literacy discussions
       Discuss how client feels about banks and payment systems
       Discuss client’s current method of handling personal
       Include information about credit and interest rates
       See the Financial Fitness Quiz at

   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

                                                        Chapter 6: Slide 8
    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

                                                      Chapter 7: Slide 1
A Trainer’s Checklist for Introducing
       E-Commerce to Clients

                                   Chapter 7: Slide 2
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

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