[...] On Get Rich Slowly — a great personal finance blog — somebody posted this great observation about the value of shopping locally. Econ majors will no doubt find cause to cringe, but I think it’s a brilliant parable. And I love the question “Who’s your farmer?” That’s a question we should all be able to answer. (See: “Organic”: It’s what what you think and Week two of our CSA subscription.” [...]

I’ve spent a lot of time thinking about these things myself. A lot of my motivations for trying to shop local (and, in particular, to eat local) relate to trying to decrease the environmental impact of my purchases – I want to decrease the total shipping costs, for example.

So, often, my decisions about when to make buying local a priority and when not to come down to (my best guess about) how the item was moved around to get to the different locations – in the case where it involves local production (eg, most local food!), I’ll pay significantly more for the local product. In contrast, when it’s a matter of both products coming from some central location, but in one case being shipped to a nearby store and then driven home in my car vs shipped more directly to me (although probably less efficiently), I’m more likely to decide based on whether I like the local store or not (ie, if they’re unhelpful, I’m not going much out of my way to support them, whereas if I think they’re good people who are good for the community, I’ll still pay the premium).

A big problem, of course, is that most of the time my guesses about how things were shipped around are just that – guesses. I wish I knew more strategies to make informed guesses on this point.

Again, thanks for the post – this is definitely a topic I like to hear about!

Hm. That’s a strange way to look at it. It’s never morally correct to allow yourself to be ripped off by anyone. But sometimes it paying more for something may be in keeping with a personal value system. Purchasing local products and buying from local merchants is important for me. I should do an entire entry on it so that I can explain why in more depth. It’s also important for me to support children in entrepreneurial endeavors. Thus, I buy magazine subscriptions from them and candy bars and who knows what else? These aren’t great deals, but I feel that I’m not just buying the magazine or the candy — I’m also buying some self-esteem for that child, and encouraging a future self-sufficient entrepreneur class. Price is not the only consideration when making a purchase.

I’ve lived in small towns where the local store-owners were some of the wealthiest people in town.

I have, too. But many of these wealthy local store-owners get that way through sound personal finance habits, not through ripping people off. If people feel they’re getting ripped off, they’re not going to continue to frequent a store.

I’ve lived in small towns where the local store-owners were some of the wealthiest people in town.

However, there is one thing that I love about shopping Amazon… no sales tax! That little fact alone, coupled with great deals, could keep me shopping there no matter how wealthy I get.

In fact that’s exactly what I saw when I was living near Brattleboro, Vermont for 10 years: A Wal-Mart moved in right across the river in Hinsdale, New Hampshire, and everyone predicted the death of Brattleboro’s downtown shopping district. But in fact Brattleboro’s downtown has been flourishing ever since, including a few stores that provide many of the same kinds of items that can be found at the Wal-Mart just five minutes’ drive away.

Lets take your analysis further. In the case of the bike trainer, you said that if the local shop is selling it for just 8% more you’d definitely buy it from them. But if they are charging 50% more then you definitely would not. If they are charging 20% more you are not sure.

In the case of comics you say that you buy online usually at a saving of 30%, or the other way round, were you to buy it locally it would have cost 42% more.

It seems to me the point you no longer feel justified in supporting the local shop is somewhere inbetween paying 8% more and 42% more. I think we need more data…

Actually I suspect the ticket price has some weight in the matter. So perhaps for low cost items you are willing to spent something like 30% more locally, but for high cost items you are only willing to spend 10% more locally.

Customer experience seems to be playing a factor too.

Instant gratification probably is key too. For something you’re finding hard to justify buying, it’s easy to have a moment of weakness and click Buy-it-now. Where as getting yourself down the shop to buy it gives you time to reconsider and possibly buy that cheaper model.

For instance, I live just outside a small town (population sub 5000) about 30 miles from a decent sized town with access to the major retail chains. For financial reasons (the value of cost), we do the majority of our grocery shopping at the large retail chain once a month. However, our town has two small grocery stores within 5 miles of our house. We value the convenience of the stores being near to us and do a fair amount of our purchasing locally to fulfill our fresh produce needs and our last minute cravings. Both stores are higher priced than the large retail chain and both are about the same distance from our home. Yet only one of the stores gets my business. In one store the employees and management are cold and unwelcoming. At the other store the manager knows us by name and chats with us when he sees us at the store or around town. The employees are helpful and friendly. We value that and as a result give them our business.

This is just one example of many I can think of. Our local library is much more service oriented than the large library in the large town. The local pharmacy is speedier and more helpful than the large one in town. Service at the local hardware store can be hit or miss and I have much more luck and better experiences at the large chain hardware stores.

Value comes not only from price, but it also comes from service, friendliness, knowledge and convenience. Despite all the rhetoric and anti-big box sentiments, I believe it is possible for a small local business to be successful. Not just in spite of, but because of, the large retailers. If a small local business provides value to its customers in ways that large retailers can only dream of, then it will not only survive, but thrive. If it can’t or won’t provide that value, then all the tax breaks, subsidies and unwarranted business will do is postpone the inevitable.

I worked at a home theater store for a few years and it seems as though just because it was a “local business” people felt like they could bargain or try to get a discount. If they said, “Well, I can get it for a better price at Best Buy!” My dream response would be to say: “So why don’t you get it Best Buy?”

Another common sense thing:
Don’t go to a specialty store and pick the salesperson’s brain only to make your final purchase somewhere else because it’s cheaper. Not cool.

On the other hand, if you’re dealing with surly unhelpful people at a store, I’d say take your business elsewhere. I’ve tried buying sound equipment locally but the store salespeople are so rude and poorly informed that I always buy it online instead(Sweetwater is fantastic for pro sound equipment).

As for the bike — hey, thousands of people here in Montreal bike outside all winter, through snow, slush, and bitter cold (though I’m not one of them…it’s not the cold that worries me but my safety, as all the bike paths are closed and I don’t like riding in full traffic). You can buy an training attachment for your bike if you want to ride it indoors, but those can put stress on the frame after awhile; it’s probably better to have an exercise bike.

If I run a coffee shop, I might choose to bank locally, buy my beans locally, buy my cups and plates locally, have my machine serviced by a local tech, and buy my syrups locally. In exchange, I hope that my bank’s employees will come to my coffee shop for their coffee breaks, my flatware company will buy their company coffee from me, and so on.

In spending $10 at a bean distributor on the other side of the country, there’s no chance that I’ll ever see a penny of that again. But when I spend it with the guy on the corner, it stays in town and, if I’m lucky, he may well spend all of it on biscotti and muffins at my coffee shop.

It can be difficult to buy cheaply with local stores. But it depends on what you are going after. I will admit that I spent more shopping local than I would have if I looked online, but I made the choice to do so. I also found some great sales throughout my shopping days.

I too collect comic books. We have a wonderful local store. If they don’t have what you are looking for on display, they will take you out to their warehouse {which is next door} to rummage through. I love it!

We did this at several stores around town when we had our twins. After one store gave us a “twin discount” of 20%, most of the other stores were willing to do the same.

Lisa