Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.
Do you make a point of shopping locally? What about shopping local? While they might sound same, there’s an important distinction — at least in my mind. When I say “shop locally,” I’m referring to the practice of buying from stores in your community. But when I say “shop local,” I’m talking about buying from locally-owned small businesses.
While many people take great pride in shopping locally (vs. buying online from Amazon or some other e-tailer), they miss the point by hitting up Wal-Mart or another big box retailer. Sure, these places employ local citizens and collect local sales taxes, but a significant portion of there revenue goes elsewhere.
This reality was underscored in a study from Maine that I recently ran across. The study, which focuses on a particular section of Midcoast Maine, compares the economic impact of shopping at locally-owned businesses vs. major chains. Yes, it dates back to 2003, but the findings are still quite interesting.
In short, the study’s authors found that for every dollar spent at a locally-owned establishment, nearly 45% of that revenue stayed in the local community with another 9% being spent elsewhere in the state. These expenditures included employee wages/benefits, inventory, supplies, and services from other local local businesses, profits accrued to the local owners, state and local taxes, and charitable contributions.
In contrast, for every dollar spent at a chain store, only 14% of the revenue stayed in the local community, mostly in the form of payroll. The balance of that money flows to out-of-state suppliers, or back to the parent corporation.
Based on these numbers, three times as much money stays in your community when shopping at a locally-owned business vs. shopping at a chain store.
Sadly, in many places, you just don’t have that many options when it comes to patronizing locally-owned businesses. Around here, it’s easy to find a locally-owned restaurant or coffee shop, but for groceries, electronics, etc. most local retailers have been pushed out by their big box brethren.
I still make a point of buying from our local hardware store whenever possible, and I frequent a few of the local businesses in our downtown shopping area, but it’s tough to “buy local” when there are just so few options left.
And when it comes to shopping at a big box vs. shopping online? I let prices and convenience dictate my choices. Yes, there’s a marginal local benefit to shopping at Best Buy vs. Amazon, but it’s not enough to offset the better prices and vastly broader selection.
What about you? Do you make a point of shopping local when you can?
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math (693)
- Dish Network Customer Service SUCKS (536)
- $8,000 Homebuyer Tax Credit (429)
- Pay Off Mortgage Early or Invest? (424)
- How to Claim the First-Time Homebuyer Tax Credit (352)
- Termite Control: Sentricon vs. Termidor (329)
- How Much Should You Pay a Babysitter? (286)
- Ethanol Blended Gas = Lower Mileage? (272)
- Reduced Credit Limits? Share Your Experience (256)
- $15,000 Homebuyer Tax Credit (242)
- Buying Furniture off the Back of a Truck (235)
- Will Mac OS X Lion Kill Quicken 2007? (191)