E-Business for Curio Shop of African Products

Introduction

In earlier centuries, communication model was depicted as a linear process in which one person directly conveyed message to another person. Business models conformed to that linear model where a seller directly interacted with a buyer. In the current twenty-first century, communication models are the interaction of transaction processes where both sender and receiver have an influence on each other as they interact within the realms of the global cultural context.

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Technical Communication as a subject has also undergone a lot of metamorphosis due to emerging technology (Goodall, Goodall & Schiefelbein, 2010). Since technology and communication models directly influence how businesses are conducted, business models have also taken the same complexity. The intricacy currently being experienced in businesses is brought about by advancement in technology. Other than the internet, infrastructure also makes up a key component of technology. Therefore, in the emerging global economy, e-business has increasingly become a fundamental element of business strategy and a strong channel for business growth (Andam, 2003).

Definition and description of E-business

Electronic business (commonly abbreviated as e-business) entails the use of information and communication technology in conducting business. In general terms, it is conducting business over the internet where all stakeholders of an entity (buyers, sellers, suppliers, among others) meet and transact over the internet. A more comprehensive definition of e-business is the “transformation of an organization’s processes to deliver additional customer value through the application of technologies, philosophies and computing paradigm of the new economy” (Andam, 2003).

The proposal will be for putting up an online Curio Shop for products of African culture. This will be achieved by developing a website. The proposal will work towards refurbishing the way business is conducted in Curio Shops especially in widening the marketplace for the shop owners.

Background

With the growth and expansion of the tourism industry especially in Africa, curio shops have equally been popular in all tourism attraction sites and major cities in Africa. Generally, a curio shop sells unusual objects of art or piece of bric-a-brac in form of African wear, ornaments, jewels, carvings, African regalia, and paintings, among others. The shops are major attractions for tourists around the world who purchase different products as souvenirs.

The suppliers of curios have been able to meet the demand of the target products due to the knowledge that some African communities have been able to maintain their culture and so the arts are drawn from the rich culture. The shop owners earn revenue from direct sales to tourists who visit the shop. This limits the market for the curios to direct sales only (Anderson, 2011).

Purpose and intended audience

Advancement in technology causes a constantly evolving market. Therefore there is a need for any business to remain relevant and competitive to avoid being faced out. To achieve this, businesses have to use current technology in the market. This work attempts to utilize technology to help meet the needs in the market for curios by setting up an online Curio Shop which will be an electronic business for marketing and selling products from different African communities. The work is a proposal for setting up an e-business. E-business will assist in reaching a large customer base and it will reduce the bureaucracy associated with physical contact in the sale of the curios. The intended audiences for this proposal are shop owners and possible investors willing to inject capital (Anderson, 2011).

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Method of inquiry

Traders in curios have problems in reaching out to customers. This is for the reason that they have to wait for a visit to their businesses to enable them to make a sale. The use of the internet to carry out their businesses will improve their customer base. This work will look at the cost and benefits associated with putting in place an operational E-business. Numerous research works have been done on the subject matter in some African communities.

The results of the work indicated that several businesses proposed online business. However, they have been not able to implement the research proposals because they lack the know-how and resources to put in place and run their own websites. The interview was conducted with various shop owners. They preferred a common website where different shops will market and sell their output to the other scenario where each shop will have its own website (Anderson, 2011).

Limitations

A major drawback of the e-business is the resistance to adopt the new technology by some shop owners. This is mainly because of the additional cost of communication. If the website is to be established it will have to be updated from time to time with new and available products in Curio shops, changes in prices, and other general changes that may affect the market. Therefore, there will be a need to have a knowledgeable person to collect the updates and make changes to the website. Besides, there has to be communication with Shop owners. It is easy and less costly to communicate via the internet especially using e-mails.

However, most curio shops in Africa are located in remote areas where there is no easy access to the internet. Therefore, other expensive modes of communication will have to be used for coordination. The additional cost in communication and employing a web developer and IT specialist poses a threat to the shop owners and the owners of the online shop because it results in increased operational cost hence the resistance (Albers & Mazur, 2008).

Scope of the business

For a start, the business will be restricted to the online sale of merchandise from different cultures across Africa only. Other cultures in other parts of the world will not be taken into consideration. However, as the business grows other cultures will be included without losing focus on the primary plan of the entity. The sale will focus on African regalia and cultural wear. Besides, there will be a sale of African paintings, carvings, ornaments, jewels, and other artistic products. Further, the company will not trade in any food product. As for advertisement, the company will concentrate on advertisements relating to companies such as flight, ferrying, tours & travel, and online payment companies.

Benefits

Benefits to shop owners and buyers

Andam (2003) states that e-business enhances three main processes. First, are the production processes that involve procurement, processing of payments, electronic links with suppliers, ordering, replenishment is improved. Secondly, customer-focused processes are enhanced. These entail promotion, marketing, selling over the internet, customer support, processing customer purchase orders among others. Finally, the internal management processes are made better.

These include employee services, internal communication, among others (Andam, 2003). The introduction of online Curio Shops will be beneficial to both shop owners and buyers in several ways. First, the marketplace for their products will be made broader due to the introduction of the e-market and therefore they will be able to reach a large customer base. The traders will be able to access markets in other parts of the world easily and at a cheap cost.

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Further, they will be able to compete with cultural products from other parts of the world. Besides, online sales and massive advertisements will create a platform for growth in tourism to visit their countries, shops, and increase purchases. Besides, the prices for the products, which are expected to be favorable, will be as a result of competition in the international market and not just of African products. This will lead to robust raise in revenue.

On the other hand, buyers will gain from the ease of trade as they can carry out their transactions without visiting the countries. Also, they will benefit from the online processing of transactions. Advertisements will also equip the buyers with adequate information on tourist sites, tour and travel companies, and flights, among others. Generally, the online Curio Shop will result in the growth of tourism in African countries and the growth of gross domestic products (Goodall, Goodall & Schiefelbein, 2010; Andam, 2003 & Albers & Mazur, 2008).

Revenues for the business

Since the business will not trade in curios, (it acts as an intermediary between the sellers and buyers) various shop owners in Africa will be approached to join the online shop at a fee. Revenue for the business will be earned from subscription fees and commission on every product sold over the website. A substantial amount of revenue will be generated from the advertisement of the Curio Shops, flight companies and agents, tour and travel companies, and tourist destinations in Africa. A number of major Curio Shops in various parts of Africa have promised their support of the online shop by subscribing to it once it is put in place. This is a good indication for the start of the business (Albers & Mazur, 2008).

Costs

Even though the benefits look quite lucrative, there are streams of costs that have to be incurred before the benefits are realized. Since technology is made up of the internet and infrastructure, costs associated with the two will have to be incurred. Besides, there will be a need to have knowledgeable personnel in place to handle the website. This section will analyze the cost components (Albers & Mazur, 2008).

Personnel

The online shop will require specialized personnel with considerable years of experience from different fields to develop and run it. There will be a need to attract and retain the personnel to ensure the success of the business and the realization of the goals. The business will entail the development and maintenance of the website, popularization, and advertisement, and integration with various online payment options that will ease transactions.

For a start, the composition of staff members will include web developers and IT specialists (their work will entail coming up with the website and updating it from time to time with changes in the market), marketing, advertisement and sales personnel (their work will involve making known and promoting the website on different platforms such as social sites, daily newspapers, and any other modes) and administrators who will coordinate all functions of the business with an objective of accomplishing the goal of the business.

Discussions were held with a few companies that can offer services in the above areas. One company was willing to offer the services free of cost for a start in return for ownership. As a way of cutting costs, a partnership with the business will be considered (Kidd & Stanford-Smith, 2000).

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Internet and infrastructure

To have an online shop in place, the major requirement will be the internet and infrastructure in form of computers, cables, and telephones. Besides, to ensure that the operating costs of the business are minimal, for a start, the business will be carried out in residential homes. Further, visits to a few shops revealed most shop owners have computers and members of staff also have access to computers and therefore there will be no need to purchase computers for a start. However, funds will be required to put in place communication gadgets. Further, funds will also be required for incorporating the online payment system on the website (Albers & Mazur, 2008).

Expected results

The online Curio Shop business is not popular in Africa. Many investors have not explored this business. It can be considered as one of its own kind in Africa. Besides, several well established Curio Shops have not been able to start their own online Shops due to the cost implications and lack of expertise. Therefore during the start, there is likely to be minimal or negligent competition. The business is likely to have an easy time in terms of competition.

Since the sellers will gain largely from the online shop a large number will be lured to subscribe to the business. Therefore, a lot of interchanges are expected (originating from both sellers and buyers) resulting from frequent visiting of the website. This will also be triggered by massive publicity campaigns that are planned to be carried out after the launch of the website. The expected results give a good indication of high revenue in the first year of operation (Albers & Mazur, 2008).

Viability of the business

The main aim of the e-business is to promote, advertise, and sell African cultural products to the growing market in Africa with a major focus on market outside Africa. This will be achieved by putting up a website that is accessible by everyone, both buyers and sellers, across the world. Revenue will be generated from fees charged on advertisements, subscription fees, and commission on the sale of curios online.

Budget projections for the first year of operation show a positive result and it is expected to grow over time. The business can grow fast and enjoy economies of scale which will put away future possible investors in the industry. Some costs will have to be incurred before revenue is earned such as market survey, development of the website, among others. The table below summarizes the cost-benefit analysis for the project in the first year of operation.

Table 1.1 Cost-benefit analysis.

Benefits $ $
Revenue from advertisement 9500
Subscription fees 7200
Commissions on sale 8300
Total benefits 25000
Costs
Field Survey for Need Identification 1500
Feasibility Study 1125
Business Proposal and Business Plan 375
Website Development 750
Integrating Online Payment Methods 2250
Business Advertisement cost 3750
Promotion and marketing cost 2500
Business Registration 2250
Communication 750
Miscellaneous expenditure 750
Total costs 16000
Net benefits 9000

From the above table, the total projected revenue is $25,000 while the projected cost at the end of the first year of operation is $16,000. The resulting net benefit is $9,000 which is 36% of the total revenue received. The operation costs are high at 64% of the total revenue due to the pre-incorporation costs. However, in the coming years, this is expected to reduce substantially.

Conclusion

Globalization has made the world to be one small market place where buyers and sellers in all parts of the world can conclude a transaction instantly. This is due to the advancement in technology. Since the local market is not adequate for business, they explore the international markets. Technology has defined ways in which businesses trade in the international market arena. Therefore, businesses are forced to adapt to the constantly transforming technology so that they may continue reaping the benefits of international trade.

Even though technology makes business across nations easy, it comes with enormous costs especially in infrastructure which many businesses such as Curio Shops cannot afford or are not willing to invest in due to the risk posed by the dynamism of technology. This gap presents itself as an opportunity for an investor who will act as a middleman between the businesses and the international market. The proposal is based on such kind of business especially in the trade of curios. Curio shops earn revenue majorly from the sale of products to tourists who visit their businesses. This market is limited as they have to wait for a seller to visit their business.

The e-business is intended to widen the market place for Shop owners. This will be done at a fee in form of subscription and commissions. Revenue is also expected to be earned from advertisements. In this model, both the shop owners and the business will gain.

Massive costs will also be incurred in setting up this business. These will be informed of advertisement and marketing costs, web development, cost of integrating online payment systems among others. Initially, the business will focus on products from Africa origin and later on explore other parts of the world. The feasibility study conducted revealed that the business will generate a net benefit amounting to $9,000 in the first year of operation after deducting the full amount of pre-incorporation costs. It is viable to inject capital into the project.

References

Albers, M. J. & Mazur, B. (2008). Information design in Morion. Content & Complexity, 13 – 26.

Andam, Zorayda, R. (2003). Concepts and definitions. E-commerce and E-business, 4 -16. Web.

Anderson, Paul, V. (2011). Application of the reader-centered approach. Technical Communication, 445-524.

Goodall, S., Goodall, H. L., & Schiefelbein, J. (2010). The evolution of communication in a global workplace. Business and Professional Communication in the Global Workplace, 28-35.

Kidd, P. T. & Stanford-Smith, B. (2000). Towards mobile information. E-business, 5-48.

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