David L. Barkley
Professor and Co-Director
EDA University Center for Economic Development
R. David Lamie
Associate Professor and Extension Specialist
Institute for Economic and Community Development
EDA University Center for Economic Development
Deb Markley
Co-Director
EDA University Center for Economic Development
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E-Commerce an actively growing
small business strategy for many
rural-based firms
Significant e-commerce strategy
adoption lags expected in rural
areas
Case studies provide in-depth
examples for other rural small
businesses to emulate
No national database of case
studies exists, mainly scattered
and diverse efforts
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Review of Existing E-Commerce
Case Study Projects
Identification of Good Examples
and Development of New Case
Studies
Distillation of E-Commerce Best
Practices for Rural SMEs
Development of Curriculum
Guidebook for Extension
Professionals Working with Rural
SMEs
I. Goals
Identify Businesses in a variety of
Economic Sectors
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Agriculture/Food Products
Manufacturing
Arts
Tourism/Recreation
Retail/Wholesale Trade
Services
Identify Businesses of Different Sizes
and Organizations
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Lone Eagles
Family Businesses
Cooperatives
Corporations
Small and Large Employers
EDA University Center for Economic Development
*Identify Businesses from Different Parts
of the County
Kansas
Colorado
Iowa
Maine
North Carolina
New Mexico
South Carolina
Minnesota
West Virginia
Montana
Idaho
Colorado
Oregon
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* Identify Businesses where the Adoption
of E-commerce Significantly Impacted
Sales or Costs
*Identify Businesses with Varied E-
Commerce Structures
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B2B
B2C
Internet only
Bricks and Mortar and Internet
EDA University Center for Economic Development
Methodology for Selection of Businesses to
Interview
Literature
Review
and
Internet
Search of
E-commerce
Programs
and
Businesses
Leads
Leads
RUPRI Center
for Rural
Entrepreneurship
Newsletter
Request
for
Information
Leads
Leads
Leads
Leads
Leads
Leads
EDA University Center for Economic Development
Leads
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We conducted extensive reviews of
websites, news stories, and other
available published information, and
solicited examples on
entrepreneurship network listserve
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Initial Telephone Interview
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Face-to-Face Interview (2-3 hours)
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Draft Case Studies Reviewed and
Approved by Businesses
Several examples follow…
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Provide outfitting services, trip planning,
lodging for people traveling in the
Boundary Waters Canoe Area
Full e-commerce site so that people can
do all their trip planning and booking
online if desired
Have launched a non-profit endeavor, with
link on their website, for Pink Paddles,
selling pink canoe paddles to raise funds
for breast cancer research – full ecommerce site as well
Prepare daily blog on life in the BWCA
which allows them to make and keep a
personal connection with clients (and
future clients); includes a live chat feature
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Start-up enterprise offering Mushing
101 weekends (dog sledding)
This start-up site is used primarily now
as an advertising vehicle for their newly
created Mushing 101 weekend trips
Also includes blog (not daily) to help
connect clients (and future clients) with
their newly developing product lines
Currently a part-time venture in
support of their competitive sled racing
activities
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Brick and mortar art gallery, with website,
that features local artists as well as one of
the largest collections of Inuit art
Full e-commerce website created to help
expand their seasonal sales (tourism
related)
Use the website to alert customers to new
one-of-a-kind pieces of artwork,
particularly Inuit art – provides a direct
marketing opportunity and they don’t have
to wait for customers to return to the
store; extends their geographic reach
No opportunity to physically expand the
gallery so e-commerce site allows them to
expand virtually
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Non-profit ISP created to provide highspeed Internet service to Grand Marais and
some surrounding areas; also provides
technical support, e.g., website
development
The development of this ISP was
instrumental in the other three businesses
being able to expand their e-commerce
capabilities
High-speed access was essential for the
gallery (given volume of pictures used)
Technical assistance provided was
essential since there are no other service
providers in the local area
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Sell glass and supplies to stained glass
hobbyists; do fabrication and repair
Within last year, developed a full ecommerce site focused on selling glass
and supplies
Taken a slow, incremental approach to
establishing e-commerce capability
because they have so many products
Shopping online for supplies is more
difficult than doing it in person – can make
substitutions of colors more easily in
person than online; online orders can
require more customer service
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Sells nautical antiques (mostly
imported) online
Has a “retail” store only to legitimize
his online business, i.e., give him a
physical address, but 96% of business
is online
Seen 20% growth each year (for about
10 years) until last year – increased
competition
Taken courses to develop his ecommerce skills but is at a point where
he needs to upgrade significantly to
keep growing
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Sells herbs and vegetables as part
of community supported agriculture
(CSA) initiative
Website serves two purposes –
information about farm and CSA;
weekly information and ordering for
herbs and vegetables
Not full e-commerce site since
people buy memberships of some
type and just order online
Innovation on traditional CSA
approach since there’s choice –
something ordering online allows
farm to do
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Manufacture rural mailboxes that
swing away, making them
snowplow and vandal resistant
To expand sales of a product
developed by father and
grandfather, had to use ecommerce – now accounts for
about 50% of sales
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Full e-commerce site allows them
to tap a national market
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Developed own e-commerce
skills through CEI classes
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Sells fiber and fiber-related
products (raw and processed)
derived from her llamas and sheep
Lifestyle entrepreneur who uses
website for (1) informational
purposes and (2) product sales
Has experimented with different ecommerce approaches – started
with PayPal but had too many
problems; now uses an E-Bay store
with a link on her website
Sales online cover the costs of ecommerce
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Wholesale (5%) and retail pottery (95%)
through retail store and online
Developed website to expand off-season
(outside tourist season) and out of region
market
E-commerce sales are allowing her to grow
the business while reducing and eventually
eliminating the retail store (too much for
her as she gets older)
E-commerce allowing her to achieve her
long term goals for the business – have
her do less business management and
more art
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Provider of e-commerce training
both in the classroom, online, and
web-based (self paced)
Most of the Maine e-commerce
businesses took advantage of these
classes to build their skill sets – not
great private sector resources to
provide these services in rural
Maine
Moved more recently to online
classes as a way of reaching more
rural entrepreneurs, with good
reviews so far
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Manufacture natural skin care products
under their own brand, Würx, and do
private label manufacturing
60% of business is private label
manufacturing and more than half of their
private label sales have come through their
website, including major client in Japan
Full e-commerce site to sell their own
products; website serves as informational
for private label clients
Only 10% of their business is retail; ecommerce generates about 30% and is
growing
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15 week program (3 hours per session)
designed to help businesses deliver a
“perfect pitch” about their business (5
minute pitch with products
Pre-requisite for participation in
www.wesstartisans.com – developed the
website because they were working with
rural artisans and realized that none had
their own website
Has served 55 artists since 2000 – now
have about 20 artists on the site and about
25% have developed their own website
Just getting started on a search engine
optimization grant project – based on
other case studies, this is a very important
service that is missing in most rural areas;
key challenge for e-commerce
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Copper bathroom sinks and copper
lighting
Established web presence through
www.wesstartisans.com because he didn’t
have the staff or own capacity to develop
his own website
Was very successful in selling products
when actively buying Google ad words –
sink sales went from 1 per month to 1 per
week; as soon as they stopped, sales
dropped
Website sales continue but he uses site for
informational purposes with homeowners
(“look at site and then talk to me”)
Not making the investment of time or
money to really optimize the site
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High end, handmade silver jewelry; primarily retail
and custom sales (although some is wholesale
through Sundance catalog)
Saw participation in www.wesstartisans.com as a
good value from a marketing standpoint – needed
a web presence since very few of her sales are
local (in spite of tourism in the region)
Full e-commerce site but also uses website for
informational purposes – galleries find her via the
website and then purchase to sell in gallery
Just now developing her own website and building
her skills to manage it
25% of her sales come directly through the
website – this is the base of her business; gallery
and custom sales are more variable
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Bricks and clicks specialty food store
focused on high-end market
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Resisting VC’s encouragement to work
with WalMart
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Web hosting at distant site, placing site
on high-speed network
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E-commerce sales more profitable than
regular marketing channels --- plans
more e-commerce in future
Bundling own products with others’
products to increase traffic, both instore and at website
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Whitewater and related (outsourced)
outdoor adventures
Bought into legacy specialized on-line
reservations system with several other
similar outfitters
Calls customers to verify complicated
reservations --- necessary nice touch!
Web presence key to attracting
customers familiar with whitewater
rafting, but not familiar with Songer
(highly competitive market)
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Sells Makita power tools, not at rockbottom prices, but couples with onsite sales and service --- serving
regional market and avoiding direct
competition with large-volume big box
stores
Offers full line of tools (1,500) and
parts (15,000), unlike competition,
allowing them to reach construction,
rental, and other business customers
Invested in specialized legacy system
that might not be serving their needs
well presently. But, find it difficult to
make a large new capital investment
once staff are trained and owner is
personally vested.
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Markets commercial and public
properties (e.g. empty schools) on
eBay, LoopNet, and Cityfeet for real
estate firms in the Midwest
Focus on quality by providing an
abundance of high quality photos and
solid local information
Refers leads to lead real estate agents
in contracted firms
They’ve found a niche but realize it
might not last forever given low
barriers to entry in a competitive
market
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Inventor/Entrepreneur relocated
to rural community (and state)
for combination of cost-savings
and lifestyle reasons (live on lake
and near family)
95% of business is on-line and
there is little interest in more
bricks and mortar retail due to
associated expenses
Sells non-owned product lines to
help drive traffic to site
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High-end custom household
furnishings sold through 15
designer showrooms – B2B
Designed in Plainville, produced
in California, materials from
Europe --- heavy reliance on
Internet --- sophisticated
operation!
Large presence in Plainville
◦ Plainville chosen based on family ties
◦ Nearly 200 employees, 2 full-time IT
staff, $50k hardware/$100k software
annually
◦ Renovating downtown existing
buildings
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Full-service marketing and media services
company --- nearly all client interaction is
now handled over Internet
Internet reduced “cycle time” to 2 weeks
from 4 months; nearly tripling project
completions (past 10 years)
Greatly reduced costs; travel, phone, fax,
shipping (e.g. UPS 30-40/day to 2-3/day
(past 6 years)
Time savings allowing new venture
development --- secured marketing
websites allowing dealer networks to
produce customized yet consistent
materials
$2.4M investment in e-commerce!
Mountain One – Leland, IA
Doll-making supplies
Grown Locally - northeast IA
Locally-grown farm products
Farmchem - Floyd, IA
Equipment and service provider for
crop input dealers
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There is no apparent singular or “right” way
to deploy e-commerce strategy. “Jazz” is an
appropriate metaphor.
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Though problematic, lack of local Broadband
Access is not an insurmountable barrier.
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Shortage of technical skills can be overcome
by savvy outsourcing of services
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Web design
Hosting
Maintenance
Content Development and Management
E-Commerce requires continual investment
of time and dollars --- it is an evolutionary
process that integrates well with continuous
business strategic thinking and planning
E-Commerce Training Initiatives Are On
Target! We Have Work To Do!
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Conduct Additional Case Studies (Two
in Montana identified)
Categorize Information Several Ways
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Business Type
Entrepreneur Type
Products and Services Offered via Web
Other?
Distillation of Best Practices and
Lessons Learned into Practical Wisdom
Development of Curriculum Guidebook
◦ Integration into E-Commerce Programs
◦ Integration into Entrepreneurship
Training Programs (e.g. FastTrac)
David L. Barkley
Professor and Co-Director
EDA University Center for Economic Development
R. David Lamie
Associate Professor and Extension Specialist
Institute for Economic and Community Development
EDA University Center for Economic Development
Deb Markley
Co-Director
EDA University Center for Economic Development