The False Perception (part three) – Buying Online
So far we have covered the false perceptions of value and externalities. The third, buying online, is an extension of both of these concepts into a reality that leave very few local companies unscathed. We all have done it. We all have researched and found a product at a store, be it shoes, books or furniture, and rather than buy the product, we go home and “Google-it” to see if we can find a cheaper price. Now of course the pricing fluctuations can be enormous but, in most cases it is marginal. Usually less than 10%. I can give an example. I am in the market for new hiking shoes. I really like Merrell shoes for performance on the trail but they are expensive… often $110 a pair. So, to ‘check’ pricing online, I did some research to see if I could find a cheaper price. What I found was that Amazon sells them for $101 with free ‘SuperSaver” shipping. Theoretically saving me $9. But as we learned in our last two parts… at what cost?
Lets start with the obvious… Free Shipping! One thing you learn after being in the retail world for any given time, is that there is no such thing as free shipping. The costs are buried in the price of the product and unless you are large giant like Amazon, it is very rare to get huge discounts on shipping from most carriers. In addition, it would be shipping one item to my house, wasting additional packaging (box, bubble wrap, paper, tape), fuel necessary to drive it to my house, and additional man hours to deliver.
The next less obvious point is that the money you spend in your community, stays in your community. According to Local First Arizona, for every dollar spent locally, 45 cents is recirculated in your community. It is payroll for employees and tax dollars for city and state governments, which goes to public services like police, fire, schools, water, sewer, trash services, etc… Now in this case, Merrell is not an Arizona company but, if I purchased the shoes from a local shoe reseller, then the money I spend still has benefits here. If I purchase them from a national chain, like REI, then only 13 cents of my purchase stays here. That’s because the money goes to REI’s headquarters and supports their local tax base. Now here is where it gets even worse. If I were to order those same shoes from Zappo’s, a large online retailer of shoes, then zero of my money stays here in our local community. I might as well just move to where Zappo’s is headquartered, because I am supporting their local tax base and supplementing their services.
So what happens when you purchase products online (when they are available locally) is deprive your community of desperately needed tax dollars, deprive local business of sales that they need to sustain themselves, which in turn, deprives our community of good quality paying jobs, which keeps more people from earning money to make more local purchases, which leaves our government looking around for donations (usually from our education funds) to keep our local economy afloat.
In this digital age, it is almost too easy/convenient to shop online for our products. We tend to forget that those decisions have repercussions often larger than the money we saved. So next time you start to push the “Submit” button on your next online purchase, spend a minute to think about how that decision will impact a local business. One that is tied to your community, provides jobs and benefits to your community, gives back to your community and usually never asks for a bailout as thanks.
In addition you should plan to attend Local First Arizona’s 5th Annual Certified Local Fall Festival this Saturday from 10am to 4pm at Duck and Decanter at 16th street and Camelback (thank you Kimber). You should also check out The 3/50 Project for more information on buying local.