Money and Values: Shopping Locally

There's more to personal finance than raw numbers. If everyone based their personal finance decisions solely on the math, there would be no need for personal finance books. (Or personal finance blogs, for that matter.) We'd all be rich. In reality, our money decisions are influenced by psychology, by emotion, and especially by personal values. For every financial transaction, we each weigh a variety of personal values to arrive at a choice that makes sense in the context of our world view.

For example, it's important for me to support local businesses. I believe that buying local products from local merchants fosters community by enriching my neighbors, by supporting their endeavors. Buying locally often costs more, but it's a financial price I'm willing to pay.

I do not avoid Wal-Mart, etc. completely. Nor do I shun all national brands. But where possible, I support local businesses over megacorprations. Often the choice is easy. When shopping for produce, Oregon is rich with local fruits, berries, and vegetables. Kris and I go down to the local farmers' market a couple of Sundays every month during the summer.

Sometimes the choice is more difficult.

I collect comic books. (Or, more precisely, bound compilations of comic books.) There's a comic book store five minutes from my house. I often wonder if I should support it despite the fact that:

  • The staff is surly and unhelpful;
  • The store doesn't stock much of the stuff I like (I have esoteric tastes); and
  • The store charges full retail price.

If I shop online, I can find the titles I want, and generally at a savings of about 30%. In practice, I do a little of both. I make most of my major purchases online, but I buy some small stuff at the local store.

This issue is on my mind because I'd like to purchase an bike trainer, which would allow me to ride my bicycle indoors on cold, rainy Oregon days. (This is part of my ongoing wellness program.) Quality trainers aren't cheap. The model I want costs $300 at a local bike store. I can order it from Amazon for $250.

It's a tough decision. If the local shop were charging $270, I would buy it from them without question. If Amazon were selling it for $200, I would order it from them without question.

I have a few other options, of course:

  • I could buy a less expensive model.
  • I could be tough and bike outside in the winter weather.
  • I could try to find a trainer on craigslist.
  • I could wait and save, watching for other opportunities.

All things being equal, I suspect most people would choose to buy local. But each of us has a different price at which local is no longer an option. For some, this point is immediate: they'll always buy the cheapest option, regardless of other factors. Others — and I know a few like this — will buy local no matter the cost.

But where is that point for me?

(As with many ethical issues regarding money, this debate is irrelevant for those with low incomes. They don't have an option.)

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Angela
Angela
13 years ago

I don’t know. Sometimes, if I need to make a two-option decision I toss a coin. Then if it feels like a really bad choice I do the other, if it feels neutral then I stick with the option the coin toss chose. Sometimes I feel that subconsciously I really do prefer one option over the other, but I can’t get the subconscious bit up to the surface. This method forces that.

Lisa
Lisa
13 years ago

You could always bring your dilemma to the local store. Many stores will give you a discount if you ask, especially if it means they get the sale (even if a t a smaller profit) and land a customer.

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

Mike Powell
Mike Powell
13 years ago

I’d tell the bike shop about Amazon’s price; with that big of a difference it’s possible you might convince them to meet you halfway. (Flexibility is often another benefit of shopping with smaller local vendors!)

Phelan
Phelan
13 years ago

I have been talking about buying presents locally. {Because I have found some unexpected items} I managed to buy everything, including Christmas dinner} locally with the exception of one gift. 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… Read more »

farron
farron
13 years ago

why don’t you buy an attachment to your bike that allows you to ride the same bike indoors.
My roomate in college who was on the triathlon team had one, and I’m pretty sure it wasn’t that expensive. Plus he got to take advantage of using his ergonomically designed bike

Kevin Mulligan
Kevin Mulligan
13 years ago

Agree with the comments above. Walk in to the store with a print out of the Amazon price. Talk with the owner, explain that you like to support local businesses. That this might mean future purchases in support of future bike riding (tubes, brakes, whatever), which means increased sales for him. I’d think most small businesses would gladly match or at least discount their retail price to be competitive. If he came down to $270 as a first offer, would you take it?

Peter
Peter
13 years ago

Also consider the service a local store can provide. Will they help you pick out the best trainer for you? Will they provide service and repairs if something goes wrong?
If you buy the trainer from them and after a year it needs a $5 part, they might do the work for free. If you buy it from Amazon and bring it to them for repairs they might charge $25 for the work.

Schizohedron
Schizohedron
13 years ago

A surly, unhelpful comic book store employee? You wouldn’t happen to live in Springfield, would you? Honestly sounds like your best bet for comics is going to be Amazon if that’s the service you get . . . especially for such a narrow range of wares. Your heart’s in the right place for shopping locally. I gave a local restaurant my catering business for my Christmas party this year, and I bought most of the other party food and supplies from stores within walking distance. Any little bit counts for a small business this time of year.

Waldo Jaquith
Waldo Jaquith
13 years ago

There’s a financial incentive to buying locally, at least for some people. Local businesses tend to appreciate the importance of supporting local businesses. 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… Read more »

brad
brad
13 years ago

I disagree that showing a local store the Amazon price is a good idea. Bricks-and-mortar stores have a lot of expenses that an online shop like Amazon doesn’t have to deal with, making their costs per unit higher. Forcing them to cut their margin to try to get closer to Amazon’s price is only going to hurt them. 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… Read more »

R.
R.
13 years ago

Don’t ask for the discount at the local store, especially if it’s a specialty store and you don’t know the owner. 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… Read more »

James Davis
James Davis
13 years ago

Interesting post. I have to say for myself that I don’t buy locally just for the sake of buying locally. For me its about value. Value can include many things besides just cost. 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… Read more »

Dave Shipp
Dave Shipp
13 years ago

Where is that point for you? 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… Read more »

brad
brad
13 years ago

James Davis wrote Despite all the rhetoric and anti-big box sentiments, I believe it is possible for a small local business to be successful.

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.

Aimee
Aimee
13 years ago

It’s a tough call for me too. I like to buy local when possible, but I also like to get the best deal for my money. When I am very wealthy I will always shop local because price won’t be as much of an issue.

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.

betamax
betamax
13 years ago

Why is it morally correct to allow yourself to be ripped off by locals?

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

J.D.
J.D.
13 years ago

Why is it morally correct to allow yourself to be ripped off by locals? 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… Read more »

rh
rh
13 years ago

Great topic – thanks for posting on it! 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… Read more »

charlene
charlene
13 years ago

I’ve been thinking about this recently too. I’ve come to the conclusion that I’ll pay a fairly hefty premium IF I like the local store. For example, I recently paid $75 more for a camera than I would’ve on Amazon from a local store where the salespeople were very helpful and friendly and answered a lot of my silly questions. I think of the extra money as paying for the good service. For bookstores, I will ALWAYS buy books from the store if I found them through browsing, or checked them out in the store before buying. If I found… Read more »

David
David
13 years ago

As Catherine Austin Fitts (solari.com) says, “who’s your farmer, who’s your banker, where’s your money?” I’ve always been a bargain shopper, with an eye towards value. In the past, this has often given me conflict about buying locally .. local is rarely the best price available. But recently I had an ephiphany .. it goes like this: if there are 5 people standing in a room, and one person transacts $10 with another person, and that’s repeated 4 times, how much money is in the room? Not $10, but $50. Now, if that same person exchanges that $10 with someone… Read more »

Terry LeMasurier
Terry LeMasurier
13 years ago

I love your thread on shopping locally. I have owned a shop for 23 years that sells only products made in our state and I have seen a very healthy 2006. We offer health insurance for full-time employees, an average of 60% more wages than our local Walmart, and thus have motivated, intelligent and helpful employees. The old model of small retail is alive and well and has a tremendous future.

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