e-Commerce Experience in Bontoc*

The e-commerce business model is for an enterprise to commission the setup of a website and sell products or services online.  In places where ecommerce has become part of one’s daily life, customers buy products online using their credit cards.  In the coming years more ways to pay were being offered using platforms such as PayPal, debit cards, WePay, Google Checkout, Amazon paymetns among others.   The use of credit cards is still the most popular way to purchase from e-Commerce sites. 

Online transactions are most popular in urban areas where the Internet infrastructure and shipping support from logistic companies is well in place. How about in the rural areas?   What if one does not have a credit card?  How do they transact online, or how do they do away with credit cards?  To get answers residents of Bontoc were the subjects of a survey.  Questions like- do you have experiences in buying things online?  What is your view of doing online transactions?  What are the sites you visit the most?  Have tried doing online purchases?  What products did you buy?  Do you have a credit card?  How did you pay for online transactions?  What prevents you from doing online transactions?  To find this out, some students of Xijen College of Mountain Province were tasked to do a research on the online experiences of select groups, local businessmen (ages 20 to 45) and college age students (ages 16-21).  The survey covered thirty-six respondents each from the select groups and these are their findings:  ninety two percent of the students and businessmen interviewed know how to use the Internet.  The most popular sites visited online among students put Facebook on top of the list, followed by Google (as a search tool for assignments), YouTube, Yahoo and E-mail.  Among businessmen Google as a search tool for business related searches comes on top of the list followed by Facebook, e-mail and Skype (a face to face online communication application).  In the area of purchasing experiences, one hundred percent do not have credit cards.  Despite the lack of credit cards, twenty three percent at one time have been able to make purchases online.  To do away with the use of credit cards, meet-ups are arranged.  Meet-ups mean both buyer and seller agree to meet in one place to trade.  Meet ups however are not done in Bontoc, usually, it is in Baguio City where meet-ups are experienced. 

Other methods of payment done by a student include deposits to the seller’s bank account or Cash on Delivery through -logistics Company LBC or Air 21 who despite not having an office here makes deliveries to Bontoc.  Shoes, bags, t-shirts, cell phones are the popular items bought by students online.   Ayosdito.ph (a classified ad like ecommerce site), Zalora (zalora.com.ph) and Lazada (lazada.com.ph).  The common complaint among students who tried buying online is the long wait for the product to arrive (three to five days delivery lead times for students is too long).  Among local businessmen, there too is a low percentage of ownership of credit cards.  Of the respondent businessmen, only twenty (20%) have credit cards with the majority-using VISA.  Thirty eight percent of the local businessmen interviewed made purchases at one time.  Hard to find tools, equipment and gadgets (such as cellphones) are on top of the list of purchases.  The majority of businessmen interviewed who never had online transaction experience cited the lack of trust or fear of being scammed as their main reason.  Convenience, lower prices of goods sold online are the major reasons why this group of businessmen continues to do online transactions.

The results show that there is a high probability for online transactions to grow in the coming years –not only in the urban areas but also the rural areas.  Now is the opportune time for entrepreneurs to explore the use of ecommerce sites as a place to sell local products, bypassing the middlemen in the process.  Building trust from your customers is still a factor to look into.  This holds true not only in physical transactions but online transactions as well.  Security is also a number one concern as to why people still have an aversion to buying online.  PayPal, a payment gateway company does away with the use of a credit card and as long as one has a bank account, purchases can be made online.  The infrastructure for online transactions is now in place in Bontoc.  In time, more municipalities will be covered.  Coffee, organic produce, fruit wine, handicrafts, woven bags, fashion accessories are local products with potential to tap the ecommerce infrastructure.  College or technical vocational graduates can also explore offering services such as encoding, doing graphics design, secretarial and accounting services.  These are termed as online freelance jobs.  Try oDesk, also Freelancer (freelancer.com).  If you have the skills, the talent or simply is not afraid to take on the challenge of doing a job for someone at the other side of the globe then this one is for you.  You can earn while at home in front of your computer.   Here’s a sample job at freelancer.com; find information from websites for a starting pay of 306 U.S. dollars.  The catch is, you will compete with others who will offer to do the work at a much lower rate.  Another is filling an Excel worksheet with data for 86 U.S. dollars. 

*Bontoc is the commercial and capital town of Mountain Province, a landlocked, "remote" town in the Cordillera Mountain ranges of the Philippines.

For Those in Business, Pay Yourself

Each month, pay yourself.  This is the advice most writers, consultants give to business owners/entrepreneurs.  The act of setting aside a monthly salary goes well with the principle of business wherein the business is treated as separate from the owner.  Well this is the hard part for most business owners since most do not really agree to this concept.  But if you are an astute business owner, you will appreciate the benefits of paying yourself.   By setting aside a monthly salary, you can use the money for your family and personal expenses.  Your salary is thus computed as part of your operating expenses.   This results in a more realistic presentation of operating expenses (assuming you have included electricity, staff salaries, taxes, licenses, other utilities, rent, machine maintenance, etc.) that can also help you set your product or service price.  Many entrepreneurs blindly set their service or product prices and lean heavily on pricing based on the price offered by his or her next-door competitor.   Now, if you add your monthly salary, your perspective for setting your product or service price will change.  One of the reasons why businesses fold up is that the owners usually are either pricing their products or services too high or too low.  Too low a price, you are in danger of not being able to support your operating expense, too high a price, you might be alienating your target market. Of course there are other factors that will affect your pricing such as prevailing market price, affordability based on your target market. 

Setting a monthly salary has another benefit.  It helps you put your foot down on looking at your business as if it were your piggy bank.  Profits are supposed to be plowed back to the business to help your business grow or shield it from a down economy. 

So how do you set your salary as a business owner?  First, consider how much you need to support yourself or your family if you are married.   Look at your business’s cash flow for a start.  The cash flow of your business is about where the money comes from and where it is spent, the difference is your available cash at the end of each month.  Cash is king in business.  You don’t want to have a very low amount of cash.  By carefully looking at your business’s cash flow, you can set a more realistic salary- one that does not compromise your cash balance.  Low cash balances often force you to ask for a loan from your bank.  Factor in your very basic needs- the ability to pay for your food, housing, and education of your children.  Learn to separate the needs from your wants.  A want could be a high-end phone that sets you back by thirty thousand pesos.  Another way to do it is to look at the present salary range of those who are in the employed sector.  If you feel that you are in the salary grade of an agency head- set it from there but make necessary adjustments if your business does not and cannot support it.  Temper your ego-you only hurt your pride by lowering your expectations and that is normal.  Then comfort yourself with the fact that there are things of value that are not equated to money.  For one, the boss of an agency or organization still has a boss.  For the business owner, you are your own boss.  Even the Philippine president has a boss right?