A Beginners Guide to eCommerce: Tools for Profit

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A Beginners Guide to e-Commerce Tools for Profit

• Kimball P.Marshall, Ph.D., Alcorn State
  University kimball.p.marshall_at_netzero.net
• Ilya Smolyaninov, Alcorn State University
• Igor Georgievskii, Alcorn State University
• Leigh Junkin, Alcorn State University
• March 15, 2008

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Introduction - What is e-Commerce?

• e-Commerce Any activity by which people sell
  buy and sell products on the Internet.
• The Internet has created opportunities for people
  to offer products they make to a world market
  with very little cost.
• The trick is to know how!
• In this workshop we will show you examples of
  food, jewelry, music, art, and crafts products
  being sold on the Internet by people like you,
• AND
• WE WILL SHOW YOU HOW!!!!
• To begin, let's look at our training objectives!

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Training Objectives

• Recognize the challenges to be faced
• Show opportunities to develop a rural home
  business using the Internet - Success Stories
• Show how rural life skills can be turned into
  e-Commerce products by rural people rural life
  skills have value!
• Explain how to get free Internet access and the
  steps to be followed that lead to successful
  sales on the Internet
• Explain how to keep the records to show if you
  are making a profit or not
• Help you to get started

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Challenges We Face

• What is needed?
• Information and experience
• Knowledge about similar people with similar
  products
• Personal goals for an e-Commerce business
• Understanding of the steps needed to begin basic
  e-Commerce sales
• Belief that the steps will lead to e-Commerce
  sales
• Belief that your e-Commerce efforts will result
  in achieving your personal goals
• Belief that you can make it happen

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Activities to Address Challenges

• Free flowing discussions to identify desired
  rewards (financial, social and psychological)
• Recognize 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
• Write in other people and products
• __________________________________________________
  __

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What Kinds of People Sell on the Internet?
Success Stories from Rural Communities

• Rural life skills have value
• Key success stories
• Oyster Creek Mushroom Company
• Indian Village
• Others

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Oyster Creek Mushroom Company
Strategy in Action
www.oystercreekmushroom.com
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.

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www.oystercreekmushroom.com
Reproduced with permission from Dan Heydon,
Oyster Creek Mushroom Company
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Indian Village

• Strategy in Action

www.indianvillage.com
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.
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www.indianvillage.com
Reproduced with permission from John Hartman,
Durango Silver Company
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Activities to Build on Success Stories

• Group discussions to identify success stories
  from your area!
• Does anyone know anyone who has sold products on
  the Internet
• Family members, neighbors, work colleagues,
  friends?
• How did they do it?
• What auction site(s) do they know about?
• Did they make money?
• Review Web pages cited in the presentation
• Print or display web pages
• Think of products you might sell
• Discuss costs involved
• Time
• Supplies
• Compare prices of similar products being sold on
  the Internet to show the profit potential

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Your Rural Life Skills and Products Have
E-Commerce Market Value
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Common Rural Life Skills

• A variety of job skills can produce marketable
  products appropriate for profitable e-Commerce
  sales
• Food processing
• Fabric crafts
• Carpentry and wood working
• Visual arts
• Music
• Book publishing
  

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Food Processing

• Jams, jellies, candies, relishes
• Home grown or gourmet foods

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Fabric Crafts

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

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Carpentry and Wood Working

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

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Visual Arts

• Painting
• Photography
• Sculpture
• Clay
• Metal
• Ceramic
• Wood
• Pottery
• Decorative
• Functional

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Music

• Independent artists
• Musical groups
• Church choirs

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Book Publishing

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

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Activities for Discovering E-Commerce
Opportunities

• What things do you make for family and friends?
• Products made as presents or for home use
• Explore market potentials through online store
  searches
• Search in group for similar products on Internet
  auction sites
• Observe how Internet auction sites work

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Simple E-Commerce Approaches for Getting Started
ONLINE AUCTIONS
Online auction and shopping websites are where
people and businesses buy and sell goods and
services worldwide
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Things You Need to Know About Selling Online

• Obtain Internet access and an e-mail address
• Register as a seller on an Internet auction site
• Establishing 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 to the Internet auction
  site

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Obtaining Internet Access and an E-mail Address
Internet Cafes
Churches
Libraries

• Free Internet access is often available in the
  community
• Free e-mail accounts are available through
  several reputable internet sites

Coffee Shops
Schools
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Register as a Seller

• Basic Steps
• Enter basic information--is it secure?
• Choose your User ID and password
• Click on the register link at the top of most
  internet auction pages
• Get a confirmation e-mail

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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/)

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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

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Selling 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

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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

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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 will build sales

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E-CommerceCheck-sheet,Sales Listing Worksheet,
and Sales Log
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(No Transcript)
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Activities for Getting Started!

• In group discussions, identify free local
  computer and e-mail access resources
• Churches, public libraries, schools
• Ask friends and relatives for assistance
• Observe how to use e-mail and the Internet
• Explore online Internet auctions with group
  members
• Perform searches for products you might make
• Monitor auction activity
• Determine shipping options and costs
• Calculate realistic prices for products to be
  sold

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Keeping Track Recordkeeping and Internet
Transactions

• Basic financial skills needed
• Basic recordkeeping
• Sales tax
• Income tax
• How to get paid?

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Recordkeeping

• Simple accounting approaches of keeping records
• Use IRS Schedule C as template
• Organize a simple ledger

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Schedule C
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Simple Ledgers
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Sales Taxes

• The state tax authority determines 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 workers may be able to help with
  setting up a sales tax account if necessary

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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)

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How to Get Paid The Need for a Local Bank
Account and Third Party Payment System

• You must 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 sellers receipt of funds from a
  sale
• Bank and PayPal? fees should be taken into
  consideration when setting product prices

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Activities to Develop Basic Financial Skills

• Financial Literacy Discussions
• Discuss feelings about banks and payment systems
• Discuss current methods of handling personal
  finances
• Discuss how to use credit properly and the cost
  of interest
• The group should take the Rutgers Financial
  Fitness Quiz at http//njaes.rutgers.edu/money/ffq
  uiz
• Discuss the need for basic recordkeeping
• Work in groups to review the IRS Schedule C (1040
  form)
• Discuss why good record are important to the
  success of any business, even small home-based
  businesses

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Get Started

• Examples have been provided
• Your rural life skills can become marketable
  products
• Opportunities have been identified
• Procedures to follow have been stated
• Financial management issues have been addressed
• Now its up to you to take control of the process
  and bring a product to the e-Commerce marketplace
• What is your next step?
• How can we help?

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E-Commerce Checklist
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Evaluation

• Every educational program can be improved. We
  want your judgment of how much this program has
  helped you understand how you can create products
  to be marketed through the Internet and how you
  can place them for sale on the Internet. Please
  take a few moments to fill out the questionnaire
  that will be provided by your extension educator.
  Your opinions will help us toward our goal of
  continual improvement so that we can serve you
  better.