E-Commerce Training Module ELEVATE Consultancy

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www.elevateethiopia.com
E-COMMERCE
Training modules
1. Introduction to Ecommerce – (Eco- M 01)
2. Promoting your Ecommerce business- (Eco- M 02)
3. Managing your business- (Eco- M 03)
4. Financial management – (Eco- M 04)
5. Customer service – (Eco- M 05)
ELEVATE Consultancy & Training
Tumim Wolde
+251911090701
Addis Ababa, Ethiopia
September, 2020
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PREFACE
Commerce (trading of products or services) has been a major impetus for human survival
since the beginning of recorded history, which is based on specialization of skills. The Internet and
Web technologies have tremendously changed the way of doing business in general, and
commerce in particular. The speedy explosion of the internet gave rise to the concept and practice
of electronic commerce, which has become a common phenomenon in the world today. As a result,
commercial use of internet enabled the transformation of traditional commerce to electronic
commerce since 1991.
Nowadays, there are more than 24 million companies in the world that use e-commerce
and global ecommerce sales amounted to more than $3.5 trillion dollars worldwide in 2019 and
this number is expected to continue growing over the next few years. World usage has increased
by over 200% between 2000 and 2006. But, most countries with emerging economies are distant
from enjoying this reality as a result of various causes which can be considered as an obstacle for
e-commerce to flourish. Where, Ethiopia’s experience is almost insignificant.
The main obstacles that prevent developing countries from leveraging the internet and e-
commerce solutions are lack of adequate, secure & efficient communication, banking
infrastructure, technical knowhow, and information processing about the economy and
environment.
E-commerce has become a common phenomenon in the world today easing the process of
business transactions. Though Ethiopia lags behind in adopting and introducing these technologies,
it is now working to introduce ecommerce through making necessary policy shifts, enacting
pertinent laws (legislative amendments) and coordinating infrastructures.
This training opportunity is to introduce participants to E-commerce and enable them to

further develop their knowledge and skills to make use of digital platforms and promote the value
and power of digital economy for existing Micro Small & Medium Enterprises (MSMEs) and the
broader society.
The training will be delivered through among others brainstorming, short-note, and
explanation by facilitator, scenarios, role play group discussion, and short videos.
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Introduction to the Modules
This training manuals are prepared by ELEVATE Consultancy and Training (ECT) to
empower the nation and Micro, Micro Small & Medium Enterprises (MSMEs) in particular with
the basic knowledge and skill to use the digital platform. This document contains of five training
modules, these are: Introduction to ecommerce – (Eco- M 01); promoting your ecommerce
business- (Eco- M 02); managing your business- (Eco- M 03); financial management – (Eco- M
04); customer service – (Eco- M 05). Each module is well articulated and expected to be suited
with of the learning capacity of the trainees. Furthermore, the modules are made up of brief
presentation on the basic concepts, audio visual learning, positive proverbs related to the
concepts, group discussions and presentations, and case studies.
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MODULE ONE
INTRODUCTION
TO
ECOMMERCE
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Unit one: Change
Demo Video 1: is about the rebirth of an eagle. Can be used to show the importance of change.
1.1. Definition of change
Change: is continuous transition from where we are to where we want to be.

It’s a process to make or to become different. Change is the law of life.
And those who look only to the past or present are certain to miss the
future.
1.2. Positive proverbs about change
• elefe silu elef Yegegnale’
• ‘yaltegelabete Yarale’
• ‘adro karia, Kermo tija’
1.3. ‘Religious scriptures about change
• Change for the better. /Quran/
• Renew yourself and be transformed. /Bible/
1.4. Sayings about change

• “Each person’s task in life is to become an increasingly better person” Leo Tolstoy
• “If you wait, all that happens is you get older” Mahatma Gandhi
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1.5. Resistance of change:
Negative Proverbs about change
• ‘Yekotun awered bela yebebetuan talech’

• ‘Yekebetu let mote aytefam’
1.6. Why we resist change?
It is the nature of man as s/he grows older … to protest against change, particularly change
for the better.
• Fear of the unknown;
• Love of the status quo;
• Changed social relationships;
• Fear of being different;
• Wrong attitude;
• Lack of knowledge and skills; required to change; and etc.
Our transition: home phone → public phone → cell phone → Post office → email→ SMS
text message. . .
Cassette -→ VHS→ CD → flash . . .
The history of Money: Bartering → Gold → metal coins→ paper currency→ plastic cards→
Virtual Currency.
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Group Discussion: The dangers of routine life:
• Causes us to see the world in one eye (Single and narrow vernacular)
• We never progress (It doesn't provide growth)
• We become ignorant to the normal human development (There are stages of change that we
naturally go through)
• It is boring. How traditional commerce is boring to you?
• We tend not to be creative or we resist new ideas and challenges
• Potential of people is wasted
1.7. Purposes of change:
• To meet changing customer needs
• To take advantage of new opportunities
• To meet changing market conditions
• To respond to internal pressures
• To respond to external-competitive pressures
Demo Video 2: is about eggs, potato and coffee. It can be used to show how we can use change
as an opportunity.
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Unit Two: The different types of ecommerce
2.1. Introduction
“You can't wait for customers to come to you. You have to figure out where they are, go there
and drag them back to your store.”
By the way, how can this work? If so, does it work for you?
In the World, more than 24 million companies are using E-commerce and a global E-
commerce sale is around $3.5 trillion.
➔ Traditional commerce is where we are . . . what can be “where we want to be?”
2.2. E-commerce is change at hand!
Information technology has transformed the way of doing business. Accordingly, the
product development, marketing, selling process and communication channels are transformed
from the traditional one to the digital. How E-commerce has changed the business:
➢ It’s so easy to start business with online trading

➢ People are getting what they want
➢ Product prices are low.
➢ People can buy on the go
➢ Variety of product options
➢ Easy for customers to pay and easy for vendors to get paid for products
Group discussions
1. If you can’t wait for customers to come to you, what can you do?
2. How can you figure out where they are?
3. Do you use social media?
4. Are you familiar with ATM Card, mobile banking?
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Demo video 3: is an animation for a website that does ecommerce. It can be used as visual
example of how ecommerce happens or even how shega does it.
2.3. Functions of ecommerce
E-commerce is the modern business platform which enables buying and selling of goods
and services, or the transmitting of funds or data, over an electronic network, primarily the internet.
These business transactions occur either as business-to-business (B2B), business-to-consumer
(B2C), consumer-to-consumer (C2C), consumer-to-business (C2B), business-to-government
(B2G) and consumer-to-government (C2G).
The ‘electronic’ or ‘e’ in e-commerce refers to the technology/systems; the ‘commerce’

refers to be trading of goods and service.
E-commerce is a modern business methodology that addresses the needs of organizations,

merchants and consumers to cut costs while improving the quality of goods and services and
increasing the speed of service delivery.
It is the exchange of information that supports and governs commercial activities including
organizational management, commercial management, commercial negotiations and contracts,
legal and regulatory frameworks, financial settlement arrangements and taxation.
From a communications perspective, E-commerce is the delivery of information,

products/services, or payments via telephone lines, computer networks, or any other electronic
means.
From a business process perspective, it is the function of technology toward the

automation of business transactions and workflows.
From a service perspective, E-commerce is a tool that addresses the desire of firms,
consumers and management to cut service costs while improving the quality of goods and
increasing the speed of service delivery.
From an online perspective, E-commerce provides the capability of buying and selling
products and information on the Internet and other online services.
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2.3.1. Four types of applications involved in E-Commerce:
• Information services applications (collection of information such as market prices)

• Promotion support applications (distribution of information on a product)
• Sales support applications (ordering, delivery, after sales)
• Payment applications
Demo video 4: is short story video of Mr. Bean. It shows how traditional marketing is so slow and
tries to convince us to shift to e commerce. It can be used to show why it is better to shop online.
Discussion:
➔ What do you understand about E-commerce so far?
2.4. The Different Types of E-commerce
Illustrative presentation…
Government Business Customer
Government G2G G2B G2C
Business B2G B2B B2C
Customer C2G C2B C2C
➔ E-commerce is driven by different groups of actors and stakeholders.
G = Government local & international authorities, NGO
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B = Business organizations (producers & suppliers, trade organizations or merchants, banks,
insurance companies or other financial service providers, logistics & transportation firms or
forwarding agencies & intermediaries)
C = Customers (potential buyer)
Business to Business (B2B): when the business transaction takes place between two
business parties through electronic channel.
Example: A business sells software as a service for other businesses to use, transaction
between manufacturer and retailer,
Business to Customer (B2C): when the business transaction takes place between the
business entity & the customer through electronic channel.
Example: You buy a pair of shoes from an online retailer.
Consumer to Customer (C2C): when the business transaction takes place between
customers through electronic channel.
Example: You sell your used furniture on Shega to another consumer.
Consumer to Business (C2B): When a consumer sells their own products or services to
a business or organization.
Example: a photographer licenses their photo for a business to use, when used furniture
sold to business entities.
Discussion:
➔ The promotion that we see on Facebook or telegram, like Mekina net.com . . . are they
considered us E-commerce?
Demo 5: is an animation that shows a very busy women trying cope with work and life at home.
Tries to show how ecommerce helps to share the burden. Can be used to show the
benefits ecommerce.
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2.5. Barriers of E-commerce application in Ethiopia
2.5.1. Amharic proverbs
‘kemayawkut melak, yemiyawkut setan’

‘Sew ende betu enji፣ ende gorebetu aynorim’
‘Silu semta፣ doro motech bechis gebta’
What do you understand from our sayings….
Access to technology (computers, connectivity, and gateway to internet), limited bandwidth,

which reduces the capacity to handle audio and graphic data, poor telecommunications
infrastructures and unreliable electricity supply.
➔ Network readiness Index (NRI) 150th in the world, 31st in Africa

➔ Skills sub-Index 149th out of 152 countries
➔ Internet users 119th in the world, 21st in Africa
➔ Internet host 200th in the world
➔ In Ethiopia, out of a population 107.5 million, 15.3% have access to the internet.
➔ The number of mobile subscriptions reached 53 million (11% growth rate)
➔ 25% of them use internet, & this grew by 37% in one year.
➔ 5% of them are smartphone users.
➔ The majority access the internet from a mobile device
➔ E-commerce is rarely used, due to the absence of legal framework & IT infrastructures.
Illustrative Presentation…
Discussion:
➔ Is it possible to apply E-commerce in Ethiopia?
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2.5.2. Good-news!
➔ The government of Ethiopia has approved a proclamation to regulate Electronic

Transaction in general and E-commerce specifically!
➔ The Central bank has enacted a directive that empowers financial technology (FinTechs)
service providers to engage in the business of payment and settlement service.
Short audio, ‘yedingay shorba’
➔ What can you observe from the audio?
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Unit Three: Differences between Traditional Commerce and E-commerce
Docu video 10: ‘merkato’
What do you understand from this video?
Business of Traditional commerce E-commerce

Comparison
Definition A business which focuses on Form of online shopping

the exchange of products and where users can buy goods &
services, includes all those services from their electronic
activities which encourages devices such as laptop, mobile,
exchange in some way or the tablets. . .
other
Process of transaction Manual Digital
Accessibility Limited time Unlimited time 24X7X365
Physical inspection Goods can be inspected Goods cannot be inspected

physically before purchase physically before purchase
Customer interaction Face to face contact Screen to face contact
Information exchange No uniform platform for Provides platform for

exchange of information information exchange
Resource focus Supply side Demand side
Business relationship Linear End to end
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Scope of business Limited to particular area Worldwide reach
Marketing One-way marketing One to one marketing
Payment method Cash, cheque, credit card Credit card, fund transfer
Delivery of goods Instantly Takes time
‘Tibeb ke key enku tibeltalech, yekebere neger hulu ayitekakelatim.’
Demo 7: is an animation video showing a young woman going around the city site seeing and
doing her normal routine but is still in the market place through her phone.it can be used to show
the process of shopping online.
Discussion
➔ How do you describe our traditional commerce?

➔ What do you understand about E-commerce so far?
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Unit Four: Benefits of E-commerce
4.1. E-commerce Benefits to Customers
In general, E-commerce provides to customers 24x7 support, customers can enquire about
a product or service and place orders anytime, anywhere from any location. A customer can put
review comments about a product and can see what others are buying, or see the review comments
of other customers before making a final purchase. E-commerce provides options of virtual
auctions & readily available information. A customer can see the relevant detailed information
within seconds, rather than waiting for days or weeks. E-Commerce increases the competition
among organizations and as a result, organizations provide substantial discounts to customers.
Demo video 12: is a presentation animation that explains the benefits of ecommerce. It can be
used as an interactive PowerPoint.
Discussion:
➔ What could be vendors’ benefit?
4.1.1. Wide range of products and services
E-commerce through internet enables the customers to choose a product or service of their
choice from any vender anywhere in the world. In physical store, vendors only keep those things
which are common and most selling. As well as there are many different reasons which affect the
availability of different products. The local retailer also tries to sell their limited stock. While
online shopping showcase variety from their stock and various stores. Therefore, a customer can
browse and select products as per her/his choices and latest trend.
4.1.2. Lower prices
It’s well known that prices in some online stores are more economical than prices in a classic,
brick and mortar store. Merchants with an online store don’t need a physical storefront and many
staffs.
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4.1.3. Convenience, Simplicity and comfort
Customers can buy any product from anywhere in the world without moving away from their
workplace or home. Due to bad weather, socio-economic situation, or else, people may restrict
their shopping even if necessity arises. E-commerce provides convenience to buy goods or
services without causing any physical constraints to the consumers. Just a few clicks from the
comfort of your home and the merchandise is yours.
4.1.4. E-commerce saves money
The cost incurred by business on middlemen generally falls on consumer. Since the middle
men are eliminated, the customer is free from bearing the cost of the middlemen. To attract
customers and combat competitors, several business organizations offer product and services at
cheaper price. Certain goods like e-books, music audio clips, software can be purchased and
delivered through internet. It saves cost for buyers.
4.1.5. E-commerce Saves time
Time saving is prime benefits of online shopping. Time taken for selection, buying and paying
for an online product compared to offline shopping is very less. The products are also delivered to
customers’ door steps within a few hours. The time taken to go to a store, look for a parking lot,
wait in line for buying, etc will never exist.
4.1.6. E-commerce provides adequate information
Internet is used as a main vehicle to conduct transaction in e-business. Internet allows

customers to search for product information, compare the prices and benefits and finally evaluate
its value before committing purchase. Through internet, customers can get their queries clarified
and track their delivery status when the goods are being sent to them. If any doubts arise while
handling the products, the customers can easily contact the business through internet.
4.1.7. E-commerce enables Availability for 24/7
One of the best things for customers is that they can easily approach to any E-commerce site at
any time of the day and order anything they want. In comparison with classic stores with exact
defined working hours.
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4.1.8. Product replacement and refund
Product replacement and refund is simple without additional cost. Sometimes you need to
change a product which doesn’t fulfill your expectation. Online retailer provides you a product
replacement warranty for a limited time. In this period, if you find the product has defect and
malfunction, then you can replace the product as per product without incurred into any cost.
4.1.9. Avoid Compulsive Shopping
Physical stores have floor assistants to lure you into buying more items. If the product is not
available in your favorite color, then the floor assistant may convince you for a different color to
increase store sales. Some of the times when you enter a store, you don’t want to leave it without
buying anything. It happens to most of us due to different psychological reasons. Sometimes it
feels like a pressure to buy unwanted items. You don’t need to think twice before leaving an online
store if you won’t find anything interesting.
4.2. E-Commerce Benefits to Seller
Demo video 13: is a video presentation showing the benefits of online shopping.
Allowing customers to shop for the comfort and convenience of their own homes at any
time can increase business sales and potentially the customers’ loyalty. Most importantly, e-
commerce websites enable business to keep consumers happy and constantly change to adapt to
their strategies according to their lifestyle and technological changes.
Using E-commerce, vendors can expand their market to national and international markets
with minimum capital investment. A vendor can easily locate more customers, best suppliers, and
suitable business partners across the globe. E-commerce helps organizations to reduce the cost to
create process, distribute, retrieve and manage the paper-based information by digitizing the
information.
E-commerce improves the brand image of the company and it helps organization to
provide better customer services. A simplified business processes in E-commerce followed by
faster and efficient service increases the productivity of the organizations. It supports "pull" type
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supply management. In "pull" type supply management, a business process starts when a request
comes from a customer and it uses just-in-time manufacturing way.
In terms of space, due to space constraint, a vendor can stock only a minimum amount of
goods in physical store. A virtual store enables business organizations to stock a lot of goods
without considering the inventory cost.
4.2.1. Lower Set Up & Running Costs Than an Offline Businesses
The cost of setting up an e-commerce website is lower than that of an offline business. The
whole sales system for your business is automated online. You will therefore save on staff, wages
and other business costs, such as an expense such as electricity, rent and heating costs. The money
that you have saved can then be used to develop your E-commerce website and product range
further. E-commerce websites will also help you expand your product offering faster than is
normally possible within an offline business situation.
4.2.2. The Business Can Be Operated from Anywhere
E-commerce websites reduce any geographical restrictions you would normally face with
an office-based business. You can be anywhere around the world and still successfully oversee
your E-commerce business. The essential items you need in order to oversee your E-commerce
website from anywhere are; having access to the Internet using your phone devise.
4.2.3. Scale-ability
E-commerce websites are very effective in allowing you to determine which products are
selling successfully, to ensure the stock levels of these products are increased. Additionally, how
these successful products can be diversified to develop a larger range of products to sell through
the website. This will allow you to grow your business in terms of sales, customer base and profits.
Amazon’s online shopping website has developed successfully around scaling their product range,
and monitoring closely what is selling with customers. This has consequently allowed them to
dramatically diversify their product range into many sectors.
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4.2.4. No Opening Time Restrictions
With e-commerce websites you are not restricting your potential customers, as they can
view your website at any time of day. This means as a business, you are maximizing your sales
and profits through a range of sales initiatives such as special offers and online marketing
initiatives.
4.2.5. More Measurable than other Sales Approaches
E-commerce websites are in fact extremely measurable and trackable through systems
such as Google Analytics. You can view statistics including how many orders are processed
through your site, average cart total, cart abandonment rate and percentage of total revenue your
website has achieved at regular intervals. E-commerce advertising costs are also lower than many
other forms of advertising. You could employ a Search Engine Optimization strategy to increase
your website page rankings in Search Engines. This would be a steady ongoing monthly
investment. SEO is a powerful method to encourage further customers to go on your website.
4.2.6. Less Time Intensive
Once your e-commerce website has been initially set up, you should not have to invest too
much time into running it. This is because the whole process for customers ordering and making
payments will all be activated through the online system. This will give you more time to
determine new products you want to sell, special offers you want to launch and to track how
successful your sales are. You will also be able to determine any trends in terms of which products
are selling most successfully.
4.2.7. Higher Margins & Better Cash flow
If your business is involved and sells within the trade industry sector, an e-commerce
website will allow you to sell at higher margins. The shopping cart and payment options on these
websites also mean you are gaining a 100% payment from the customer straight away. This will
improve your cash flow, particularly when customers normally provide you with payments in
several installments. There are also several reliable payment systems you can have for your e-
commerce website including; PayPal, Google Checkout, Sage Payment Solutions, WordPay and
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more. This will ensure all your payment transactions are processed successfully, so your business
receives the payments efficiently.
4.3. E-commerce benefits to Society
Customers need not travel to shop a product, thus less traffic on road and low air pollution.
Moreover, E-commerce helps the government to deliver public services such as healthcare,
education, social services at a reduced cost and in an improved manner.
Demo video 14: is a video presentation containing the benefits of online shopping using research
data. Puts facts in numbers. Can be used to make a factual claim of the benefits of online
shopping.
Discussion:
Which product or service cannot be sold in Ethiopia using E- commerce?
4.4. Ecommerce Drawbacks
4.4.1. Technical Disadvantages
While there are more advantages for ecommerce it has disadvantages. There can be lack of
system security, reliability or standards owing to poor implementation of e-commerce. The
software development industry is still evolving and keeps changing rapidly. In many countries,
network bandwidth might cause an issue. Special types of web servers or other software might be
required by the vendor, setting the e-commerce environment apart from network servers.
Sometimes, it becomes difficult to integrate an e-commerce software or website with existing
applications or databases. There could be software/hardware compatibility issues, as some e-
commerce software may be incompatible with some operating system or any other component.
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4.4.2. Non-Technical Drawbacks
Initial cost − the cost of creating/building an e-commerce application in-house may be very
high. There could be delays in launching an e-Commerce application due to mistakes, and lack of
experience and User resistance − Users may not trust the site being an unknown faceless seller.
Such mistrust makes it difficult to convince traditional users to switch from physical stores to
online/virtual stores. In addition to this there is also Security/ Privacy issues − It is difficult to
ensure the security or privacy on online transactions. Lack of touch or feel of products during
online shopping is a drawback. Volatility and Accessibility problem is also another problem- E-
commerce applications are still evolving and changing rapidly and Internet access is still not
cheaper and is inconvenient to use for many potential customers, for example, those living in
remote villages.
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Unit five: How to access
5.1. Accessing your vendor dashboard
Marketing dashboards can be developed differently depending on their exact purpose, labeling,
the enabling technology and ‘build-or-buy’ considerations.
1. Selecting the key metrics

2. Populating the dashboard with data
3. Establishing relationships between the dashboard items
4. Forecasting and “what if” analysis
5. Connecting to financial consequences
Vendor can manage all his created products just by clicking the “Manage Products” option in the
left navigation menu. Vendor can see the following type of the manage product grid.
Vendor can search any of his products on the store; he will get the product page link on the product
and can delete/update the product information at the same time. Vendor can filter the product store
wise on the site vendor panel. Here are the following fields that are available in the product grid.
a). Id: Id is the field for the product to uniquely identify it. It is related to the admin to easily find
the respective product.
b) Product Image: Vendor can see the product image that has been set for the product. Product
image will also link to the product view page on frontend.
c) Product Name: It will show the product name and the vendor can filter the product just by
inputting the product name and clicking on the search button.
d) Product Type: it will show the type of the product. Vendor can also filter the product listing
by clicking on the product type dropdown.
➔ Status: this will show the status of the product either is enabled or disabled.
➔ Approved: It will show that the product has been approved by the admin and if the product
is enabled then it will show on frontend.
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➔ Disapproved: It will show that the product has been disapproved by the admin and will
not show on frontend.
➔ Enabled: It is the product’s global status. If the vendor does not want to show the product
on the site, s/ he can disable the product and it will not show.
➔ Disabled: This type will not show the product anyhow on the site.
e) Price: It will show the general regular price of the product on the site.
f) Quantity: It will show that how much quantity of the product is left and can be sold on the site.
g) Action: Vendor either can edit or delete the product on the site.
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MODULE TWO
PROMOTING
YOUR
ECOMMERCE BUSINESS
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Unit One: Promoting your ecommerce business
1.1. Definition
Market: is an organizational function and a set of process for creating, communicating

value to customers and for managing customer relationships in ways that benefit
the organization and its stakeholders." The American Marketing association.
Marketing: is a societal process by which individuals and groups obtain what they need
and want through creating, offering, and freely exchanging products and services
of value with others.” Kotler
1.2. Introduction to Marketing

Marketing deals with customers. It is delivery of customer satisfaction at a profit. The
twofold goal of marketing is to attract new customers by promising superior value and to keep
current customers by delivering satisfaction.
1.3. Introduction to Online Marketing

Marketing in online can be defined as, applying digital technologies which form online
channels (Web, e-mail, databases, plus mobile/wireless & digital TV) to contribute to
marketing activities aimed at achieving profitable acquisition and retention of customers
(within a multi-channel buying process and customer lifecycle) through improving our
customer knowledge (of their profiles, behavior, value and loyalty drivers), then delivering
integrated targeted communications and online services that match their individual needs.
1.4. Why Do You Need Marketing?

How you market your business determines if the enterprise will be successful or not.
Marketing is a tool used to create and maintain demand, relevance, reputation, competition and
more. Marketing agencies, business owners and consumers have moved from the traditional
method to digital media. The ease with which marketing results from most websites, social media
and mobile advertising can be estimated, tracked and quantified when compared to traditional
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marketing media. This has made digital marketing a dream-turned-reality for digital marketing
agencies.
The various forms of digital advertising are cost-effective for most business owners. Web
presence and engaging in conversation with customers using social media and e-mail marketing
are cheap when compared to print advertising and direct mail. Businesses of any size can make
use of these digital channels.
The ease and speed with which goods and services can be located through the use of our
mobile phones and computers has made digital advertising a must for all businesses. Digital
marketing has put the world in our hands.
1.5. Difference between Marketing Online and Offline

Offline marketing can encompass print ads, direct mailing, business cards, brochures,
television, and radio ads. Online marketing includes SEO, Pay Per Click (SEM strategy), email
marketing, social media, and website design.
1.5.1. Online Marketing
Pros:
➔ Results are easily trackable and you can gain a better understanding of the demographic
you are attracting with your ads and online interactions.
➔ You can respond quickly to any customer comments, questions, or criticisms online. If a
customer complains on our Facebook page or your Yelp account, this is something that
you can quickly resolve, creating better customer relations.
➔ There are so many options! You can blog, post a video on YouTube, post on Facebook or
Twitter, network on LinkedIn, sell items on an eCommerce site, and the list goes on. There
are a number of ways make online marketing work for you, and they are typically very
affordable.
Cons:
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➔ Online marketing can isolate certain demographics in the market, especially if your product
or service is targeted to older generations making this marketing strategy not as effective
as it could be.
➔ Because of the sheer amount of internet marketing that takes place, people often ignore ads
online. There is simply an overload of advertising making your ad fail to grab attention.
1.5.2. Offline Marketing:
Pros:
➔ Print advertising and direct mailing can target specific groups of people to ensure you’re
getting the most exposure to your target market as possible.
➔ Traditional networking and sales appeal to many people – the personal connection and
intimacy of the interaction can be the selling point for many.
➔ Business stationery like business cards, brochures, letterhead, flyers, etc. lay the foundation
of your brand identity. This is your first impression and it gives your business a more
personal feel.
Cons:
➔ Offline marketing can get expensive with print ads, commercial printing, direct mailing
and any other print collateral.
➔ Nearly 80% of spending decisions made by consumers are influenced by internet
marketing, namely social media. This is hard to compete with – online marketing gets more
exposure.
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1.6. Strategic Pricing of Your Products
1.6.1. How do you price your products?
The price of a product and/or service is the first thing that a customer checks before
deciding to purchase your business offering. The price of a product is not only important to
customers but to marketers as well because it speaks for the marketer’s ability to assess and
evaluate how target customers see the value of the product and/or services and how much they are
willing to pay. Hence, pricing can determine the success or demise of a business.
Product, place, and promotion, pricing is considered to be another most important

components of the marketing mix. In order for entrepreneurs grow and make their businesses
successful, they must take pricing strategy seriously as it helps them boost their sales and profits
by determining the perfect price point.
i. Premium Pricing
This type of pricing strategy is only used when you have a unique and popular brand. Most
often, the prices of your products and/or services are higher than your competitors in the market,
meaning that you have a substantially bigger competitive advantage than other brands. It can be
considered to be a great strategy for popular companies who want to introduce their business in a
new market and want to maximize the profitability of their products in a short period of time.
ii. Penetration Pricing
This pricing strategy aims to capture market share by setting the products and/or services
at a relatively yet artificially low price to attract their target customers. When the strategy works
effectively, the company will eventually and gradually increase the prices of their products and/or
services. The main goal of penetration pricing is to be able to establish a strong brand recognition
and awareness and enticing the customers to try and buy their product. Although this strategy can
be initially disadvantageous for the company in terms of profit and revenue, the main goal of
penetration pricing is to boost word-of-mouth, make the customer become more aware of the brand
amidst the number of competitors in the market.
iii. Price Skimming
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Price skimming strategy is often used by businesses with a higher competitive advantage
to maximize their revenue before other business competitors can enter the market and offer similar
products. However, this strategy may not always work because it can attract new competitors offer
the same products at a much lower price. When there is an increase in the supply of the same
product, its prices are expected to fall.
iv. Economy Pricing
The economy pricing strategy is viewed as a no-frills low price and is often used by
companies, such as Wal-Mart and Aldi, whose marketing strategy includes a very fundamental,
low-cost approach by keeping their products at an affordable and friendly price to attract and
capture a particular segment of the market. What is great with this pricing strategy is that it can
generate more sales during times of recession.
v. Psychological Pricing
This type of pricing strategy is often used to make the customers respond emotionally
rather than rationally to the prices of the product. When a certain product cost $99.9, it can instantly
instill in the minds of the customers that it is cheaper than a product that is priced $100. The $0.01
can differently make a big difference when it comes to your sales and revenue. This is also a
powerful marketing strategy that you can use when you want to establish a new product in the
market if it is implemented properly. However, as a marketer or entrepreneur, it is also important
to understand that there are some customers who avoid buying a new product, especially if they
know nothing about its quality. Although there are people who would automatically purchase
cheap products, there are also a significant number of customers who are wary about buying
unfamiliar products with a cheaper price tag. Therefore, it is safe to say that the price may not be
directly proportional to the quality or benefits of unfamiliar products.
1.7. Branding Your Products
A brand often includes an explicit logo, fonts, color schemes, symbols, sound which may be
developed to represent implicit values, ideas, and even personality.
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i. Logo
There's perhaps no single more important element to your brand standards than the consistent
use of your logo. First, you should never alter or redraw your logo. Second, its placement and
sizing should remain consistent within each communication vehicle (for example, your letterhead,
brochures, postcards, fliers, etc as well as your web page). Rules can vary according to the type of
material you are using your logo in, but they shouldn't vary drastically. And if you want to look
like a large company, remember this irony: The bigger the company, the smaller the logo.
ii. Graphics
Use distinctive symbols and shapes in a consistent way. Choosing the same basic graphic
elements will help customers remember your brand faster. Also, be consistent when using borders
and/or backgrounds--or show a pattern of consistency that complies with your brand standards.
For example, you could choose a cupid-themed border for a Valentine's Day ad and a clover-
themed border for a St. Patrick's Day ad. In both cases, your border should be consistent in size
and/or weight (the amount of emphasis it receives relative to the other elements on the page).
iii. Colors
Color is one of the most important components when it comes to brand identity. The colors
you choose will make an immediate impression on your audience, and play a large role in memory
retrieval. Therefore, color can significantly impact someone's perception of your brand. For
example, gold, silver and burgundy are perceived to be upscale, while green is viewed as fresh
and healthy. It is recommendable to research and/or test-market certain colors before you commit
to a pallet. One easy way to do this is to create a brochure or ad in three or four different color
pallets, then survey various people for feedback. And remember that colors have different
meanings in different cultures.
iv. Fonts
Choose just a handful of fonts for use on all your materials, selecting at least one serif font and
one san-serif font. Serif fonts have "feet" at the bottom of the font to guide the reader's eye, while
san-serif fonts don't--"Times" is an example of a serif font; "Helvetica" is an example of a san-
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serif font. Serif fonts work well in paragraphs or body copy because they give the eye something
to "hang on to." San-serif fonts should be reserved for headlines, numbers in charts, very small
text or text that is reversed out of a color. As a general rule, you should use no more than two fonts
in a document, although a third, decorative font could be used sparingly.
1. Illustrative or photographic style
Consider what type of visuals-pictures--you want to feature on your marketing materials. Will
your visuals consist of illustrations or photos? Try to stick with one or the other. Regardless of
your choice, your visuals should be similar in style and color usage--black and white, four-color,
two-color, etc.
When you've identified rules for the above areas, write them down and distribute them to any
employee or vendor, such as a designer or printer, who may need to reference them. Your brand
standards will go a long way toward building your brand equity. It's worth the time and effort to
do it right.
1.8. Creating Online Content that Stands Out
Solid content, packaged properly and promoted innovatively, is all it takes to create a
blockbuster content marketing program.
Here are the four crucial factors you must pay attention to in order to make your content really
stand out.
1. Establish a solid story angle
It all boils down to the story angle, believe me. Sample this: You’ve heard of GE, but do you know
what kind of content promotion it’s up to?
2. Shoot amazing photographs that delight the audience
Check a couple of photographs that are posted to FB or Telegram account:
3. Leverage your expertise and network
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You are an expert in your niche. Why not share your knowledge with potential customers who
may be craving it? Why not use your connections to provide valuable content to your users?
The idea is simple: Use your expertise and network as a content promotion framework.
4. Ensure that your content is trendy
Are you posting content that’s been-there-done-that? Then content promotion will not help much.
You have to ensure that your content is creative, trendy, and edgy. Remember the story angle I
talked about in the first tip?
1.9. Marketing Channels to Promote Your Products
Marketing channel is the external contractual organization that management operates to

achieve its distribution objective. The contractual organization refers to those firms or parties who
are involved in the negotiator functions include: buying, selling, or transferring title from one firm
to another.
The marketing mix model portrays the marketing management process as a “strategic
blending” of the four controllable marketing variables (product, price, promotion, and place).
External uncontrollable elements include the economy, technology, government, sociocultural
patterns of buyer behavior and competition.
Channel strategy fits under “place” in the marketing management strategy and managers must
operate their marketing channels in such a way as to support and enhance the other strategic
variables in the marketing mix. Channel strategy is concerned with the entire process of setting up
and operating the contractual organizations that are responsible for meeting the firm’s distribution
objectives. It must first be established before logistics management should be considered. Logistic
management is a subsidiary of channel management.
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1.10. Flows in Marketing Channels

1. Product flow: is the actual physical movement of the product from the manufacturer
through all of the parties to the consumer.
2. Negotiation flow: represents the interplay of the buying and selling functions associated
with the transfer of title or rights of ownership. Negotiation is a two-way process involving
mutual exchange between buyer and seller.
3. Ownership flow: is the movement of the title of the product from one stage in the process
to another.
4. Information flow: involves two directions – from the manufacturer to the consumer and
from the consumer to the manufacturer. This flow includes transportation as information
deemed necessary for the actual delivery of the product is communicated to the
transportation agents.
5. Promotion flow: refers to the flow of persuasive communication in the form of
advertising, personal selling, sales promotion and publicity. This flow adds the advertising
agency as an element of promotion.
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MODULE THREE
MANAGING YOUR
BUSINESS
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Unit one: Creating and managing your business budget
1.1. Definition
Group discussion
Budget: is an estimation of revenue and expenses over a specified future period of
1. time
Whatand is utilized
are budgets by governments, businesses, and individuals. A budget is
in business?
2. basically
How do youa financial
manage plan
your for a defined period, normally a year.
business?
1.2. Introduction to budgeting
Budgeting is the decisions on the level of expenditures and the repartition of resources
among organizational subunits. It is an organizational process, which is closely related to key
choices concerning strategic priorities and to resources acquisition strategies. The process
concerns choices on what to produces for the market and how to produce and provide it. It involves
estimates on how much resources will be required to provide the goods and services and the prices
such goods and services will generate in the market. The basic components of a budget are sales,
expenses, personnel, loans, investments, and the assumption made in outing together the budget.
➔ A budget is a plan to:
• control your finances
• ensure you can continue to fund your current commitments
• enable you to make confident financial decisions and meet your objectives
• ensure you have enough money for your future projects
➔ Three major elements

a) Forecast what will be needed
• Labor and material
b) How much will it cost?
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c) When will it be needed?
➔ Benefits of a business budget
There are a number of benefits of drawing up a business budget, including being better able to:
• manage your money effectively

• allocate appropriate resources to projects
• monitor performance
• meet your objectives
• improve decision-making
• identify problems before they occur - such as the need to raise finance or cash flow
difficulties
• plan for the future
• increase staff motivation
1.3. Managing Your Day to Day Finance

• Experience sharing. . .
When you're running a business, it's easy to get bogged down in day-to-day problems and
forget the bigger picture. However, successful businesses invest time to create and manage
budgets, prepare and review business plans and regularly monitor finance and performance.
Structured planning can make all the difference to the growth of your business. It will
enable you to concentrate resources on improving profits, reducing costs and increasing returns on
investment.
In fact, even without a formal process, many businesses carry out the majority of the
activities associated with business planning, such as thinking about growth areas, competitors,
cashflow and profit.
Converting this into a cohesive process to manage your business' development doesn't have
to be difficult or time-consuming. The most important thing is that plans are made, they are
dynamic and are communicated to everyone involved. See the page in this guide on what to include
in your annual plan.
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Financial accounting can be described as: the classification and recording of monetary
transactions of an entity in accordance with established concepts, principles, accounting standards
and legal requirements, and their presentation, by means of various financial statements, during
and at the end of an accounting period.
Effective procurement and efficient use of finance lead to proper utilization of the finance
by the business concern.
➔ 5 Comprehensive Steps
A. Choose a business bank account and separate your personal and business finances.
B. Organize your business finances by using accounting software and hiring a professional.
C. Understand and fulfill your business tax responsibilities.
D. Get a handle on your personal and business credit scores.
E. Understand your business loan options and work to qualify for the financing you’ll need in
the future.
➔ Benefits;
• a greater ability to make continuous improvements and anticipate problems
• sound financial information on which to base decisions
• improved clarity and focus
• a greater confidence in your decision-making
1.3.1. Track your cash flows
If you don’t have a separate bank account for your business yet, get one. You need to know
that your business is making money. And the easiest way to see this is to watch your cash flow. If
you have more coming in then going out, you’re probably doing well. You also should be watching
the timing of money going out and coming in. After all, what if all your bills are due tomorrow.
It won’t matter a whole lot if you have 1 million coming in next month if you can’t pay
your employees until then.
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Keep in mind any holds you have on your accounts.
What payment methods do you offer your customers? Do any of them place a hold on the money?
Is there a five-day delay from the time a customer pays to the time the money is in your
bank? You need to know this when you’re figuring out when you’ll have money to spend.
Track what you expect to spend each week. Track what money you expect to come in each week.
If what you need to spend is more than your current bank balance plus what’s coming in,
you know you’re about to have a problem.
1.3.2. Follow these tips to help improve your cash flow:
• Don’t pay anything earlier than you have to. If it’s due in 30 days, pay it in 30 days.
• Consider offering monthly payment plans or subscriptions to customers to guarantee

money coming in.
• Keep a reserve in your business bank account ‘just in case.’
• Don’t overcomplicate it. You don’t need huge technical cash flow statements.
1.3.3. Determine how to count inventory
If you’re selling a service, then ignore this step.
Inventory is the product you sell or all the materials you use to build that product.
Don’t forget to include any costs for wrapping or packaging your product.
Decide what minimum volume of inventory you want to have on hand, and make sure you are
tracking inventory so you can reorder before you pass this point.
The last thing you want is to run out of inventory and lose sales.
Why is inventory part of accounting basics?
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Inventory equals money.
Its money you spent to buy the stuff. Money you won’t make back until you sell your
product. And the money tied to your inventory can change while it’s sitting in your warehouse (or
store, or apartment).
That’s when you suddenly have less inventory than what you’re supposed to. Maybe an
item got lost, or stolen, or was ruined and had to be thrown out. There are lots of reasons it happens.
If you’re operating a business out of your home, it’s even less likely you will have
shrinkage. After all, you’re less likely to have someone steal inventory if you’re the only one
around it. It’s also a lot harder to lose inventory in an apartment compared to a huge warehouse.
1.4. Understand your cost of goods sold
Cost of goods sold is the expense directly tied to the products you sold. This is the inventory sold
plus how much it cost to make that inventory.
Let’s say you sell one widget. Whatever it cost you for the parts plus whatever it cost to build it
should be the cost of goods sold for that widget.
This can get a lot more confusing to figure out if you bought a lot of widgets at different prices,
and you’re paying different people different salaries to put them together.
Don’t overcomplicate things.
The easiest way to figure it out is to use a weighted average. Here’s an example of calculating a
weighted average:
Anything that is tied directly to your products and has a cost increase when you make more stuff
should be in cost of goods sold.
If you pay employees per every widget they make, include their labor. If you pay them a flat hourly
rate even if they don’t make a single thing that day, don’t include their labor in the cost of goods
sold.
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The retail price of an item minus the cost of that item is your ‘gross margin.’ This is not your profit.
It just tells you how much you’re making on each item before you add in all your other expenses.
Things can get pretty complicated here if you have different costs for different sales conditions.
To simplify it, let your accounting system track your actual cost of goods sold. If it’s linked to
your e-commerce site, it should be able to do this automatically.
For predicting your future cost of goods sold, save yourself a headache and just use an average.
It won’t be perfect, but it’s better than just leaving the cost out of planning.
1.5. Calculate all other expenses
Now you know your costs directly tied to sales volume. Next, you need to understand how much
everything else is costing you.
Any expenses that don’t increase when you sell more or decrease when you sell less are called
‘fixed expenses.’
For example, if you pay a monthly rent, the amount is fixed. It won’t change whether you sell one
widget or one million.
These costs aren’t part of the cost of goods sold and aren’t factored into your gross margin.
They do affect your profit and your cash flow, though.
Common fixed expenses are:
• Rent
• Utilities
• Insurance
• Tax
• Interest on loan payments
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• Salaries
These expenses are considered ‘fixed’ since you have to pay them even if you sell nothing next
month. Don’t get this confused with an expense being the exact same amount every month.
An expense like utilities might be more one month than the next. Or it might be more in the winter
than in the summer. It’s still a fixed expense in accounting terms. If any expense changes month-
to-month, you should use an average for budgeting.
1.6. Figure out your break-even sales requirement
Budgeting and planning are important parts of running a business.
After all, you’re not going to just want to know if you made a profit last month, you’re going to
want to know if you expect to make one this month and next.
Your break-even sales amount is the amount of sales dollars you need to earn to cover all of your
costs.
This means you have to sell enough of your product to cover the cost of making them (including
the labor) plus an additional $5,000 just to break-even (no profit and no loss).
Remember that your fixed costs don’t easily change.
For example, if you’re in a five-year lease, you’re going to struggle to find a way to lower your
rent.
This means if your break-even seems too high, you should first look at either raising your prices
of trying to lower your costs of goods sold.
You could do this by charging more for shipping, using cheaper materials or finding cheaper labor.
1.7. Track your sales and profits before tax
Now you know how many items you need to sell to break even. Next, you need a way to track
your sales.
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This lets you know early on if you’re going to have an issue. It will also help you manage your
money.
If you’re tracking your sales, you’re able to notice this. Now you have time to do something about
it.
You still have two weeks left to try and drum up more business with some extra digital marketing
efforts.
Just make sure that if it’s paid marketing, you figure the cost of that into your budget.
Next, go to your e-commerce settings.
Then turn on the ‘Enable e-commerce’ switch and ‘submit.’
You can learn more about Google Analytics in some of my other posts, or check out my video.
But let’s get back to accounting.
Now that you know sales, cost of goods sold and all your other ‘fixed’ expenses, you know
your earnings before tax as well.
Keep in mind profits don’t mean cash in hand!
If all of your expenses are actually paid out this month, then your bank out could go into the red.
The timing for when to recognize sales and expenses can get pretty complex.
Leave this for your accountant and tax time. It’s not important when it comes to the day-to-day
management of your business.
If you ever go public, you’ll need to know the more advanced accounting reporting requirements,
but they’re not needed for managing your business.
1.8. Set up the proper tax rates for customers
Here’s the part most people groan about: taxes. Taxes are unavoidable, and they can get pretty
complicated.
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If you sell a lot of different products and services to a lot of people around the world, you may
want to consult a professional at this point.
Thankfully, systems are pretty smart these days. Your e-commerce software should take care of
most of this for you.
As long as you flag a product as something that is taxable, once your customer puts in their address,
it should calculate the tax payable.
And if you have tax exempt products or customers, you can set up exemptions directly in your e-
commerce store.
The detailed instructions for Shopify exemptions can be found here.
1.9. Plan for your tax payments
Now that you’re properly set up to collect tax, you also need to make sure you’re ready to pay it.
Your tax rules will depend on where you’re physically located.
At a minimum, expect that you need to submit as much in tax as you’ve collected.
This means it’s important to recognize that money as tax and set it aside. If not, it could hurt when
it comes time to file!
Some online shopping services, such as Shopify, allow you to include tax into your sales price.
The difference is that your sales price, and profit, are lower whenever your customer is in a region
of higher tax.
I wouldn’t recommend using this function.
It can make it more difficult to plan actual sales dollars you expect to earn.
It can also make it easy to lose track of how much profit you collected and how much tax you
collected (which you will then have to pay out).
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If you do want to include tax in your prices, make sure you can run a tax report.
This should easily tell you how much you collected in taxes, so you can still identify it and put it
aside.
It’s a good idea to set aside any taxes you will need to pay out, so they don’t get lost in your bank
balance or included in your cash flow.
Consider opening a separate account just for taxes.
1.10. Understand your balance sheet
We’ve now covered everything on your income statement, as well as cash flow.
The final thing to cover is the balance sheet.
This is what helps you track your company’s long-term health to see overall how your company
is doing.
An income statement is a snapshot in time. A balance sheet is the bigger picture.
The balance sheet is made up of assets, liabilities, and equity.
Assets are things you have of value, like cash in the bank.
Liabilities are debts or payments you owe.
Equity is the difference between the two.
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1.11. Managing Demand and Supply
• Experience sharing . . .
◼ Demand Management: The organization has a desired level of demand for its products.
At any point in time, there may be no demand, adequate demand, irregular demand, or too
much demand, and marketing management must find ways to deal with these different
demand states.
◼ Building Profitable Customer Relationships: Beyond designing strategies to attract new

customers and create transactions with them, companies now are striving to retain current
customers and build lasting customer relationships.
Failing to balance demand with supply not only affects the entire manufacturing
organization, but the complete eBusiness trading network as well. The plant may not have the right
raw materials to meet production needs. There may be increased production costs due to
unscheduled changeovers to meet unplanned promotional activities. Excessive and costly
inventory may be stocked for discontinued or slow-moving items. Conversely, inventory shortages
for new and promoted products may inhibit promotional programs. Stockouts may occur because
companies failed to have the right product in the right place at the right time. And if there are
frequent stockouts, it can lead to increased costs due to expedited orders or, even worse, permanent
customer loss. Keeping demand and supply in balance is a constant struggle. The consequences of
poor customer service, high inventories, cash flow difficulties, and failure to meet planned
business goals lead companies in search of a process to better manage the delicate balance of
demand and supply.
People use the internet by acting as shoppers in a retail store. They look at what's available,
place an order, and wait for the merchandise to arrive. What they do not appreciate is the
miraculous chain of events they have triggered. The order goes to the fulfillment operation, the
distributor, the manufacturer, or a combination of the above. It is then picked, packed, handed to
a shipper, and delivered. Most of this process is accomplished seemingly at the speed of light.
But what happens when the merchandise is not there to be picked? Another chain of events
is triggered, but these events are less pleasant. The consumer, who ordered quickly, expects
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delivery in the same way. As a result, a customer that will not return or a lost sale has just been
created. (An aside: The internet is unforgiving. just think, you don't have to wonder any more
about customer service levels. You know immediately if you lost a sale. No guessing about
availability, attractive packaging, or focus group opinions. You either have it when the customer
wants it or you don't.) This phenomenon is placing increased pressure on managing demand and
planning up and down the supply chain.
The "front end" of e-commerce applications, or the order processing, is certainly important.
But many companies have failed to recognize the importance of the "back end" systems. Industry
experts are raising their voices to emphasize the importance of the support systems necessary to
satisfy the back-end requirements. The reaction is to go to the back end and fix the warehousing
and delivery systems. Millions of dollars are being spent in shoring up old or creating new systems.
This is well and good, but still missing the target. Somebody, somewhere has to have product.
The manufacturer, the distributor, the fulfillment house, or the retailer absolutely must have
product. The only way to do that efficiently is to plan for product requirements and replenishment
of that product, regardless of where in the supply chain it is being stored or how it is being
transported. Because the profit margins are so slim, the inventory must be as efficient as possible
to open up a share of the e-commerce market.
The magic slogan is: "The right stuff, the right place, the right time." To do this, however,
requires an ongoing system of planning. That planning — whether it is done daily, weekly, or
monthly — must look at existing inventories, incoming receipts, lead times, lot sizes, customer
orders, forecasted requirements, and requirements from other distribution channels in order to
suggest both a replenishment quantity and required date. This process is not the front end or the
back end, but the "middle end." Without this piece of the puzzle, all that e-commerce buys are a
way to "do the wrong things faster."
With all the variables involved, an automated or semi-automated solution is mandatory.

That's where the value is in the entire supply chain/e-commerce structure. The return on investment
is lodged in the planning and replenishment. There is return on investment (ROI), of course, on
the front end and the back-end systems. But the largest and ongoing ROI is in 100% customer
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service at the absolute minimum inventory investment. The value grows even larger when all the
participants up and down the supply chain are involved in the planning process.
It is truly amazing that, for decades, companies have continued to cover their lack of
planning with too much or too little inventory. Now, in the world of e-commerce, these same
companies continue to operate the same way and they continue to ignore the middle end. This is
probably because planning cannot be totally objective. There is some guesswork and some human
input to the process, regardless of the degree of automation.
Forecasting, planning, and replenishment have been key to the success of most good
companies in the past; that is truer now more than ever. In fact, without an effective planning
system in the middle, a company can go out of business quicker than it got into business in the
world of e-commerce. Implementing the front end and fixing the back end is important, but
concentrating on the middle end where the dollars are to be made makes a big impact in the world
of e-commerce.
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MODULE FOUR
FINANCIAL MANAGEMENT
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Finance and liquidity management
1.1.Definition
Finance: is the art and science of managing money. It is referred as the provision of money
at the time when it is needed.
1.2. Introduction to Finance and liquidity management
Finance function is the procurement of funds and their effective utilization in business
concerns. One type of liquidity refers to the ability to trade an asset, such as a stock or bond, at its
current price. The other definition of liquidity applies to large organizations, such as financial
institutions. Banks are often evaluated on their liquidity, or their ability to meet cash and collateral
obligations without incurring substantial losses. In either case, liquidity management describes the
effort of investors or managers to reduce liquidity risk exposure.
Investors, lenders, and managers all look to a company's financial statements using
liquidity measurement ratios to evaluate liquidity risk. This is usually done by comparing liquid
assets and short-term liabilities, determining if the company can make excess investments, pay out
bonuses or, meet their debt obligations. Companies that are over-leveraged must take steps to
reduce the gap between their cash on hand and their debt obligations. When companies are over-
leveraged, their liquidity risk is much higher because they have fewer assets to move around.
In identifying financial risks and mitigating damages, there are some recommendations which
can help uncertainty in cash flow;
1. Keep your financials up-to-date and list down possible business impacts
In order to understand the current financial state of your business and identify the best
possible actions to keep your business afloat, it is very important that you update your financial
statements. Analyze the statements using financial ratios - Profitability, Liquidity, leverage and
efficiency ratios.
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2. Seek alternate financing options to fill short-term cash shortages
3. Inject additional capital from your investors and banking partners
4. Identify alternate revenue streams
5. Cut down costs/non-essential spends
6. Seek payment extensions from your suppliers
7. Manage your inventory
1.3. Building a strong credit history and credibility
Discussion . . .
The fast-growing and competitive e-commerce and social commerce market provides both
opportunities and challenges for MSME. On the one hand, you can advertise and sell your products
online via multiple channels, such as your brand's website and social media sites, to customers in
different parts of the world. Positive electronic word of mouth (eWOM) over social media can also
help you strengthen your brand name, acquire new customers and grow your business.
On the other hand, there is vast competition in the market. Today's consumers can easily
compare products and prices online and read reviews to see what actual customers think. To thrive
in such a competitive environment, you really have to build online trust for your brand with
customers and maintain positive customer relations.
Trust is the cornerstone of customer relations in the e-commerce market. Compared to in-store
shopping, consumers encounter more uncertainty when they shop online for several reasons:
Some consumers are concerned about credit card security and privacy issues when they give out
their personal information online.
They can't physically see or touch the products. Sometimes, the products they receive are not quite
what they expected.
They need to wait for the products to be delivered to them after placing an order.
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Because online shoppers face these uncertainties, they only want to buy products from the online
vendors they trust. But how do you build online trust with customers? Based on the research and
consulting experiences, the following suggestions are recommendable.
1.4. Protect your customers' data security and privacy.
I conducted focus group interviews with online shoppers and asked them how they
determine whether to trust an online vendor or not. The most popular answer to this question
concerned security and privacy issues. Consumers want to make sure that their personal data,
especially credit card information, is closely guarded. They don't want their credit card numbers
to be stolen.
Some consumers only shop on sites they know are secure. To protect your e-commerce
website and customer data, you can use a trusted e-commerce platform, adopt cybersecurity
software, and train your employees on best practices for cybersecurity and privacy. (Are you
looking for a trustworthy platform to host your online store? Check out our picks for the best e-
commerce platforms and shopping cart software.)
1.5. Reduce uncertainties and live up to your customers' product expectations.
Provide detailed, accurate information about products and delivery time to make sure your
customers' expectations align with the product they receive. For example, you may want to provide
details about materials, size and care instructions for clothing items. For electronics, you could
provide instructions for using the features and functions.
In addition, the picture must present the product as accurately as possible. If the picture of
the product is enlarged to show detail instead of representing the actual size of the product (such
as a pendant), you should note this on the product page. You may also post product videos on your
company website and social media sites for some product categories, such as tech products and
electronics. Videos can give your customers a better sense of the products' features and how to use
them.
1.6. Foster positive electronic word of mouth for your company, brand and products.
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Today's consumers rely on each other's opinions to make their online purchase decisions.
As I discussed in this article, consumers may look at business review sites to evaluate the company
or product ratings or ask their social media friends for product recommendations. Many consumers
would rather trust their friends and other consumers' opinions than advertisements and promotional
materials. Thus, you have to foster positive eWOM for your company by providing high-quality
products or services, engaging with your customers, and offering effective customer care via
customers' preferred channels. Positive online reviews and ratings can help you build online trust
with consumers.
1.7. Enhance your website design.
Consumers feel that poorly organized sites are not trustworthy, so you want to make sure
that your company website is professional, up to date and well organized. It should be easy for
your online customers to navigate your e-commerce site and find the products they need. You need
to present your products in an organized way and provide accurate, current information on them.
Check your website regularly for dead links and remove them to ensure all the information
customers find on your site is up to date.
As discussed in a business.com article by Chris Christoff, you also need to reduce friction
on your e-commerce website and provide a seamless checkout process for your online customers.
Recent statistics show a shopping cart abandonment rate of over 69%. As Christoff suggested, you
can increase your site speed, offer multiple payment options, improve your website design,
simplify the sales process and make your site mobile-friendly. With a well-designed website, you
can generate leads, increase sales, and build trust with customers by giving them a painless online
shopping experience.
1.8. Work on your content marketing.
You can create and distribute relevant and valuable content to increase your brand awareness
and credibility, attract new customers, and engage with your existing customers. You could post
informative content such as research articles, info graphics, webinars, videos and podcasts on your
business's website and social media. Videos are a particularly good way to teach your customers
how to use your products.
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The content of your posts needs to be original, up to date, informative, educational and
relevant to your audience. With credible content, you can demonstrate your thought leadership in
your industry, enhance your company's credibility and build your audience's trust for your
organization. Never plagiarize articles from other organizations' websites; you need to respect
other companies' copyrights and the original authors' intellectual property. If your audience finds
out, it will be a big breach of trust. Strong original content can definitely help you build online
trust with your key audience.
In conclusion, trust is one of the most important factors of customer relations in the online
environment. It's imperative for your e-commerce company to build online trust with your target
audience by protecting your customers' data security and privacy, making your customers'
expectations real, fostering positive eWOM, enhancing the quality of your e-commerce website,
and utilizing content marketing.
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Unit Two: How to apply and manage working capital needs
1.1. Definition
Working capital: is the capital which is needed to meet the day-to-day transaction of the
business concern.
1.2. Introduction to working capital
Poor working capital is fuel by two main factors which are inventory management and
vendor terms. E-Commerce is not the only one that suffers from this issue as brick and mortar
stores too suffer from these factors. Inventory can be liquidated just like your property or
equipment, and it is listed as an asset on paper. This might not also be the case in practical timers.
For example, the value of your phone can go down once new models are launched in the market if
you sell them online.
In other words, your working capital becomes more vulnerable by your inventory. Running
an online business is an exciting venture, but one that also comes with many challenges. Because
your company is solely based online, you need to be even more diligent about managing and
growing your business. That’s why working capital can be so beneficial; it can help you afford
various upgrades that you may not be able to pursue otherwise
Discussion . . .
1.3. How to Improve Working Capital
1.3.1. Reduce inventories
Your inventories can be compared to a depreciating asset and a ticking time bomb. This
means that you could put too much pressure on your business to sell when you hold too much
inventory.
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1.3.2. Change the business model
Changing your business model might be the way out (but that will also depend on your
business model). Your store can charge higher prices for a bespoke design when you have a made-
to-order product. This will also allow you to sell your product before paying your vendor to
proceed with the production.
1.3.3. Update vendor terms
One of the leading causes of poor working capital among eommerce businesses is a bad
vendor. Each product goes through its own unique sales cycle but takes, for example, it's faster to
receive a dress bought online than a phone or TV. At the same time, it cost less to hold apparels in
inventory than the one consisting electronics.
The bottom line is that it is essential to any business and not just e-commerce store alone
to establishing a healthy cash flow and working capital.
2.1. Responsible borrowing
Discussion. . .
Borrowing may be a convenient way to purchase something that you would otherwise take a
long time to save up for. In the case of buying a home, for example, a mortgage allows you to live
in your home while you pay it off.
2.1.1. Can you afford to borrow?
Before you decide to borrow money, it's worth taking the time to ask yourself a couple of
key questions below, and to make sure you can afford new debt repayments on top of your current
expenses or commitments.
• What are you borrowing money for?

Taking out a loan to pay for a home or an education makes sense in many cases, but
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borrowing for vacations or other discretionary items may not be necessary. Too much
debt can be a long-term burden.
• Is borrowing your best option?

Borrowing may not always be the best option. There may be other ways to achieve your
goals without going into debt. For example, you can meet your goals by saving instead of
borrowing
• How much should you borrow?

Everyone's financial situation is different, but you should avoid borrowing more than you
can comfortably repay. Before you borrow, ask yourself if you'll be able to make the
payments - and remember to take interest charges into account as well. It's usually a good
idea to ask your lender for a repayment schedule and a detailed breakdown on the total
cost of the loan.
• What is the cost of borrowing money?

When you borrow money, you have to repay the principal (amount borrowed) plus
interest. If you choose a floating-rate loan, be mindful that your repayments will rise and
fall in line with market interest rates. Be aware that some financial institutions may
charge other fees as well, including annual fees and/or handling fees, fees on overdue or
missed repayments, early repayment fees, cancellation fees, etc
2.1.2. Before you borrow, consider the following:
• Do a budget to work out your monthly spending, savings and borrowings and check how
much you can afford repayments
• Allow for expenses for unexpected events eg losing a job, floating rate loan and
emergencies
• Only borrow what you need and what you can comfortably repay. Do not be tempted to
borrow more even if you qualify for a bigger amount
• Shop around for interest rates and watch for any extra charges
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• Choose the right type of loan that meets your needs
• Make your payments on time to avoid penalties and pay off your debt quickly to minimize
total interest payments
• Avoid unnecessary multiple sources of credit to keep an easy track of repayments
2.1.3. Situations when you should avoid borrowing
• Problem paying everyday expenses. If you have trouble paying for daily necessities,
borrowing money could put you into debt.
• Covering optional spending. If you can put off an optional purchase until you've saved up
the money, you will avoid interest charges altogether.
• Borrowing because to settle other debts. If you're already deep in debt, going further into
debt is probably not the best solution.
2.1.4. Risks of borrowing too much
Borrowing too much can leave you struggling financially as you plunge deeper into debt. Be
careful about borrowing too much because:
• It draws money from other important needs. If you borrow money, you have to pay interest.
Money that goes towards interest payments can't be used for other purposes, such as paying
down your mortgage or meeting other obligations.
• Your credit score can suffer if you can't pay your bills. Falling behind on your payments
means it will be increasingly difficult to borrow more money for future needs. Find out
more about your credit score and how it affects your borrowing.
• It can lead to higher interest payments. Lenders may charge higher interest rates on
subsequent loan applications if you are already carrying a large amount of debt.
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MODULE FIVE
CUSTOMER PROTECTION
AND HANDLING
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Unit One: Introduction to customer handling
1.1. Introduction to customer services
In this new digital era, companies need to adjust their business models to reflect the changes
this brings. Customer demands are increasing day by day. To meet those demands, companies need
to offer an exceptional customer experience. Placing effort into producing a better experience will
produce more customers, more sales, and encourage loyalty. Businesses need to see the value in
focusing on the digital customer experience when it comes to achieving their business goals,
significantly reducing costs and creating more satisfied customers.
1.1.1. What is digital customer experience?
• Digital customer experience is the sum product of the interactions between customer and
brand taking place on digital platforms such as mobile, desktop, iPad or other tablets.
1.1.2. Why digital customer service?
• E-care is the future of customer service. According to the survey, by digitizing customer
service, customer satisfaction can be increased by 33% and costs cut by 25 - 35%.
Experience Sharing
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There is a strong focus on the customer and customer satisfaction as it should be in every
business. If business wants to benefit from world wide web, then it has to proceed in a specific
way which in many aspects differs from the traditional business.
Area Old (web 1.0) New (Web 2.0)
Business Philosophy Virtual & IT enabled IT enabled relationship

relationship marketing marketing
Technology base static pages, file system, Social technology (user-

communication via email generated content, usability,
interoperability)
Digital part of business Transaction based: one-to- Transaction based: Dynamic,

one interaction many-to-many interaction
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In the new web world, the traditional goods-dominant logic is replaced by a service-dominant
logic. Its premises are:
• Service is the fundamental basis of exchange
• Indirect exchange masks the fundamental basis of exchange
• Operant resources are the fundamental source of competitive advantage
• Goods are a distribution mechanism for service provision
• All economies are service economies
• The customer is always a co-creator of value
• The enterprise cannot value, but only offers value propositions
• A service- centered view is inherently customer-oriented and relational
• All social and economic actors are resource integrators
• Value is always uniquely defined by the beneficiary
If an enterprise wants to be successful in the Web world it has to move from a goods focus
to a service focus. How can this be managed?
• Do not produce goods but assist customers in their own value-creation processes,
• Value is not created and sold but value is co-created with customers and other value-
creation partners.
• Do not consider customers as isolated entities, but in the context of their own networks.
• Resources are not primarily tangible such as natural resources but usually intangible such
as knowledge and skills.
• Shift from thinking of customers as targets to thinking of customers as resources.
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• Shift from making efficiency primary to increasing efficiency through electiveness.
Unit Two: Online and offline customer

2.1. Differences between and online customer and offline customer
When undertaking an online marketing campaign for your business it’s important to
understand that you’re online and offline customers are not necessarily the same group of people.
They will likely want different things, have different questions and prioritize things very
differently from your traditional customers.
2.2. Do consumers behave in different ways when they’re shopping online vs. offline?
And if so, what can you do to make sure you’re providing the best experience for your
ecommerce store customers. Let’s take the following and discuss what they mean for both offline
and online stores:
• Location
• Ease
• Understanding
Location
In offline stores, location is super important because you do not want to be too close to your
competition.
There is much more effort and time involved in visiting a physical store and so this increases their
chance of buying.
However, ecommerce stores can be accessed by a worldwide audience, and aren’t limited to those
nearest. However, competition is often only a click away, meaning if you don’t manage to convince
your customer to buy from you, it’s easy for them to look elsewhere.
It’s a challenge for ecommerce stores to keep their potential customers’ attention.
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What this means for your ecommerce store: It’s very easy for your customers to leave your
website and seek the product elsewhere, and often they do not come back. In this scenario, be sure
your website is as clear as possible and removes any friction the potential customer might have. If
you can get them to trust you, they’re much more likely to do business with you, and not your
competitor.
Ease
In offline stores, retailers try and group similar items together so it’s easy for people to buy things
from the same section. There’s a reason why all the fruits and vegetables are together.
Ecommerce stores still need to take ease into use, because customers want to know how fast they
can make their purchase.
You should optimize your store by making the check-out process the simplest you can. Giving
your customers unnecessary friction will play a role in them leaving your store and making the
purchase elsewhere.
What this means for your ecommerce store: Keep the buying process as easy as possible. Allow
customers to check out as guests, for example. Or when filling in their details, don’t demand they
fill in a 100-word form. It takes far too long, and the sale doesn’t depend on it.
Understanding
In a physical store, your customer service staff are there to help any customers who might need
support before making a purchase.
Online this is harder, but not impossible. Providing useful content, FAQs or multiple ways to
contact you if they have any questions or problems.
What this means for your ecommerce store: For products that might need further explanation,
be sure to present the extra information in a place where the potential customer can access it as
soon as they need it. For example, if your ecommerce store sold electric pushbikes, you might
want to add videos to the product pages of the different ways people use different bikes. This way,
there is no confusion regarding what can and can’t be done with each bike.
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Online shoppers and offline customer experience do happen in similar ways, however, there is
much less commitment involved when interacting with your ecommerce store.
Any ecommerce store misses out on the human element that a retailer can offer. Because of this,
it’s even more important you create a trustworthy, genuine experience for your current and
potential customers.
Short Video. . .
Over time, people in the business of providing online access and services have found that
some profound differences exist between the attributes which drive online and offline customer
satisfaction. These differences appear to be impelled by six divergent characteristics between the
two modes of doing business, each of which we will examine here in some detail.
1. Hyper-evolution of online customer sophistication.
2. Online offers immediacy of comparative offers/increased price sensitivity.
3. Instant access to referent authority/word-of-mouth lowers online cost of information.
4. Online appears to have lower barriers to brand switching.
5. Online one-to-one marketing model yields increased choice options.
6. Offline satisfaction is transaction based; on-line satisfaction is process-based.
Traditional product and brand development has benefited from the fact that off-line consumer
tastes and demands can take years to change. Brand positioning, basic messaging, and effective
promotional strategies can yield incremental satisfaction.
Group discussion
• Distinguish between online customer and offline customer…

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1. Introduction to Ecommerce – (Eco- M 01)

2. Promoting your Ecommerce business- (Eco- M 02)

3. Managing your business- (Eco- M 03)

4. Financial management – (Eco- M 04)

5. Customer service – (Eco- M 05)

ELEVATE Consultancy & Training

This training opportunity is to introduce participants to E-commerce and enable them to

concepts, group discussions and presentations, and case studies.

1.1. Definition of change

Change: is continuous transition from where we are to where we want to be.

1.2. Positive proverbs about change

• elefe silu elef Yegegnale’

• ‘adro karia, Kermo tija’

1.3. ‘Religious scriptures about change

• Change for the better. /Quran/

• Renew yourself and be transformed. /Bible/

1.4. Sayings about change

Negative Proverbs about change

• ‘Yekotun awered bela yebebetuan talech’

• Fear of the unknown;

• Love of the status quo;

• Changed social relationships;

• Fear of being different;

• Lack of knowledge and skills; required to change; and etc.

Cassette -→ VHS→ CD → flash . . .

Group Discussion: The dangers of routine life:

• We never progress (It doesn't provide growth)

• It is boring. How traditional commerce is boring to you?

• We tend not to be creative or we resist new ideas and challenges

• Potential of people is wasted

1.7. Purposes of change:

• To meet changing customer needs

• To take advantage of new opportunities

• To meet changing market conditions

• To respond to internal pressures

• To respond to external-competitive pressures

➔ Traditional commerce is where we are . . . what can be “where we want to be?”

2.2. E-commerce is change at hand!

➢ It’s so easy to start business with online trading

2.3. Functions of ecommerce

The ‘electronic’ or ‘e’ in e-commerce refers to the technology/systems; the ‘commerce’

E-commerce is a modern business methodology that addresses the needs of organizations,

From a communications perspective, E-commerce is the delivery of information,

From a business process perspective, it is the function of technology toward the

2.3.1. Four types of applications involved in E-Commerce:

• Information services applications (collection of information such as market prices)

➔ What do you understand about E-commerce so far?

2.4. The Different Types of E-commerce

Government Business Customer

Government G2G G2B G2C

Business B2G B2B B2C

Customer C2G C2B C2C

➔ E-commerce is driven by different groups of actors and stakeholders.

G = Government local & international authorities, NGO

C = Customers (potential buyer)

‘kemayawkut melak, yemiyawkut setan’

What do you understand from our sayings….

Access to technology (computers, connectivity, and gateway to internet), limited bandwidth,

➔ Network readiness Index (NRI) 150th in the world, 31st in Africa

➔ Is it possible to apply E-commerce in Ethiopia?

➔ The government of Ethiopia has approved a proclamation to regulate Electronic

Docu video 10: ‘merkato’