E-Commerce Opportunities
for
Limited Resources Rural Population
Extension Worker Training
Kimball P.Marshall, Ph.D., Alcorn State University
kimball.p.marshall@netzero.net
Ilya Smolyaninov, Alcorn State University
Igor Georgievskii, Alcorn State University
Leigh Junkin, Alcorn State University
Chapter 1: Introduction
Objectives of training manual
• Provide guidance to extension workers to encourage rural limitedresource people to begin small-scale Internet-based, e-commerce
activities
• Rural, limited-resource populations must believe in the ability to use
e-commerce for personal goals
• Extension workers must encourage this belief and provide support as
skills are developed
• Expectancy Theory provides the theoretical framework
• Existing e-commerce private sector sites provide the opportunity
Chapter 1: Slide 1
Chapter Outline
Chapter 2
Explains how expectancy theory and the concept of locus of
control can be applied to rural limited-resource
populations
Chapter 3
Provides examples of success stories of rural populations
that have used basic e-commerce to sell products made
with rural life skills
Chapter 4
Provides guidance identifying rural life skill 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
Chapter 1: Slide 2
Chapter 2: Building Confidence – Expectancy Theory
and Locus of Control as Theories of Motivation
• Rural limited-resource populations face many ecommerce barriers
– Lack of information and experience
– Lack of knowledge about similar people
– Lack of role models
• Two key theories of managerial psychology can
help limited resources clients
– 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
• 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
and achieve your own
goals
You believe you must
depend on others to set and
fulfill goals
Chapter 2: Slide 3
Locus of control can be tied to
expectancy theory in that the
individual must believe he or she can
perform the required tasks, and that
the tasks will lead to the intended
outcome, which will result in the
individual receiving the desired
reward
Chapter 2: Slide 4
Challenges Facing Rural Limited Resource
Populations
• 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
– May 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
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
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
Chapter 2: Slide 6
Chapter 3. Microenterprise Success Stories
from Rural Communities
• Success stories will
– build confidence
– motivate
– Stimulate vision
– Provide reference group for the limited
resources client
• Key success story illustrations include
– Highland Harvest
– Oyster Creek Mushroom Company
– Indian Village
Chapter 3: Slide 1
Examples of rural, microenterprise
e-commerce activities can help
rural, limited-resource people to
understand that their rural life skills
have value and that the products
they make can be sold through ecommerce
Chapter 3: Slide 2
Highland Harvest
Strategy in action
www.lightstone.org/dev/shoponline/index.html
Highland Harvest, supported by Lightstone Community
Development Corporation, is a very interesting example of how
producers can join together to create an “on-line” shopping mall
for high value-added, gourmet, food products. Through
Highland Harvest, producers from small farms in Hampshire
County, West Virginia, offer organically grown products directly
to consumers over the Internet. By emphasizing finished
products developed from organically grown produce, Highland
Harvest is able to distinguish its products from commodities that
do not command high prices. By teaming together, producers
offer on one web site a variety of products to capture and
maintain consumer interest.
Chapter 3: Slide 3
www.lightstone.org/dev/shoponline/index.html
Chapter 3: Slide 4
Oyster Creek Mushroom Company
Strategy in action
www.oystercreekmushroom.com
Oyster Creek Mushroom Company of Damariscotta, Maine is an
interesting example of 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 on-line.
Chapter 3: Slide 5
www.oystercreekmushroom.com
Chapter 3: Slide 6
Indian Village
Strategy in action
www.indianvillage.com
One of the most interesting rural e-commerce web sites is
www.IndianVillage.com, an on-line shopping mall with many links
to Indian related web sites such as Durango Silver Company that
offers Bisbee Blue turquoise jewelry and cabochons through its EBay store. Other IndianVillage.com web site links shows the ecommerce activities of American Indian artisans who offer pottery,
basketry, textiles, beadwork and various forms of Indian jewelry.
Chapter 3: Slide 7
www.indianvillage.com
Chapter 3: Slide 8
Discussion Topics and Exercises
• Seek Local Area Success Stories From Clients
– Find others who have sold products on the Internet
• family members, neighbors, work colleagues, friends
– Ask questions
• How did they do it?
• What auction site(s) do they know about?
• Did they make money?
• Review Web Pages Cited
– Print or display web pages
– Ask clients to think of products they might sell
– Discuss costs involved
• Time
• Supplies
• Compare costs with similar prices being sold on the Internet
Chapter 3: Slide 9
Chapter 4. Valuing Rural Life Skills and
Products
The limited-resource client needs 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 product
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
Food Processing
• Jams, Jellies, Candies, Relishes
• “Home grown” or “Gourmet” foods
Chapter 4: Slide 3
Fabric Crafts
•
•
•
•
•
•
•
Sewing
Knitting
Crocheting
Quilting
Leather goods
Embroidery
Fabric toys
Chapter 4: Slide 4
Carpentry and Wood Working
•
•
•
•
•
•
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
Music
• 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 by oneself as presents or for using
at home
• Explore Market Potentials Through On-line Store Searches
– Similar products on Internet auction sites
– How Internet auction sites work?
Chapter 4: Slide 9
Chapter 5: Simple E-Commerce Approaches
for Getting Started
An online auction and shopping website is where people and
businesses buy and sell goods and services worldwide
Chapter 5: Slide 1
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
• 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
Chapter 5: Slide 2
Obtaining 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
Registration 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 email
Chapter 5: Slide 4
Establish a Payment System
• Requirements for efficient, secure
sales:
•
Account to receive payments to
– Local Bank account
•
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
Selling the Product
• Monitor the process regularly
– Check email and auction site
• Communicate with interested buyers
– Reply to any information requests
in a timely manner
• 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
• Feedback is important to create a
trustworthy online auction
community
• Trust will build sales
Chapter 5: Slide 9
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
• Online Exploration of Internet Auctions with
Limited Resource Clients
– Perform searches
– Monitor auction activity
– Determine shipping options and costs
– Calculate realistic prices for products to be
sold
Chapter 5: Slide 10
Chapter 6: The Need to Keep Track – Financial
Literacy, Record Keeping, Taxes and Internet
Transactions
Financial Literacy Challenges of Limited Resource
Populations
The extension worker should help the Client to develop basic financial
literacy skills needed for e-commerce
• Basic record keeping
• Sales tax
• Income tax
• How to get paid
Chapter 6: Slide 1
Record Keeping
• Simple accounting approaches of keeping records
• Use IRS Schedule C as template
• Help Client organize simple ledger
Chapter 6: Slide 2
Sales Taxes
• Consult with State Tax authority to
determine current policies
– Sales tax may be State and
County 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 3
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 4
How to Get Paid: The Need for a Basic Bank
Checking Account and Third Party Payment System
• Important challenge is to
encourage limited resource
client to develop a 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 and PayPal fees should
be taken into consideration
when setting product prices
Chapter 6: Slide 5
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 Record keeping
– 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 6: Slide 6
Chapter 7: Now Let’s Get Started
•
•
•
•
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Expectancy and Locus of Control Theory
E-commerce success stories
Common rural life skills can become marketable products
Steps to begin e-commerce activity
Financial management issues
Evaluation
An evaluation process is important to ensure that any training program is
effective and to provide for continuous improvement for future
programs. An extension worker evaluation and a client evaluation is
included—Thank you for taking the time to see they are completed.
Chapter 7: Slide 1