I recently came across an interesting display in a local store in downtown LaGrange. The banner (see photo) said the following:
Save Your Local Economy… Three Stores at a Time
Saving the Brick and Mortars Our Nation is Built On
3. Think about which three independently owned stores you’d miss if they were gone. Stop in, say hello, and pick a little something up. That’s how they stay around.
50. If just half the employed U.S. population spent $50 each month in independently owned stores, their purchases would generate $42,629,700,000 in revenue.
68. For every $100 spent in independently owned stores, $68 returns to the community through taxes, payroll, and other expenditures. In a national chain, only $43 stays here. Spend it online and nothing comes home.
1. The number of people it takes to start the trend… you.
The premise of this campaign is to encourage people to support (i.e. spend money) in local, independent shops and restaurants. The first time I saw this, I didn’t think that much of it, but then as I was eating lunch the other day (in a locally owned restaurant) I actually read the flyer and it just didn’t sit right with me.
Don’t get me wrong, I’m all for shopping locally. I don’t like the huge chain stores or “big box” retailers any more than the next guy. But I’m also the owner of an small, independent online store and I’m friends with several entrepreneurs who have been fortunate enough to grow their businesses into regional and national businesses.
The Problem with “The 3/50 Project”
The problem with the 3/50 project and any other projects like it is simple. It’s not my (or your) responsibility to save local businesses. It’s the business owners’ responsibility. Initiatives like these put the responsibility on the individual to support businesses that often times are poorly run.
Lots of small businesses will go out of business. They are running on outdated business models, with nothing unique to set them apart from their bigger, or more nimble competition.
Local independent business owners need to find a way to differentiate themselves. Whether that’s based on service, product offering, or some other factor, they are going to have to find a way to make themselves valuable to potential customers.
Customers are never going to shop with someone just because they feel obligated to support them. It’s simply not enough to guilt someone into buying from you.
It’s Not the Internet’s Fault
Another issue I have with this program is that it seems to place a little bit of the blame on Internet companies. One of the key points is that if you shop with Internet companies all of the money leaves the local economy. While it does leave one local economy, it also enters another local economy. And it almost always stays in the United States.
As the owner of a small, independent, but online retailer, I take offense that just by being online and not traditional brick-and-mortar I’m somehow causing these small, local companies go out of business.
The truth is a lot of these local independent retailers and service providers have gotten lazy. They’re used to just doing business the way they’ve always done business, and they’re scared of changing. No amount of community involvement is going to save the business that stuck in the Stone Age.
It’s Just Postponing the Inevitable
Let’s say this initiative works. What happens in five years or 10 years after these companies have been saved from extinction by local patrons who give them money instead of cents spending money with big-box retailers and Internet companies? What happens if these companies ignore the reasons why people were not shopping with them to begin with? Are their customers expected to just buy from them for ever with no regard for price, service, selection, or any other market-driven factors?
Business owners need to take a hard look at why they are suffering, and why big-box retailers are thriving. If it’s not possible to compete on price, and there’s no way they can bring any other value, maybe it’s time to close up shop and go get a job.
How Do You Save Your Small Business?
So what do you do if you own a small, local business? Instead of spending your time and energy trying to guilt people into supporting local shops, look for ways to differentiate yourself. What makes you different? Better? What is your USP?
In some cases, you may not be able to differentiate enough. Local general stores simply couldn’t compete with the big box retailers like Walmart. It seems people just don’t care enough about service or convenience when it comes to some products (like commodities). It may be sad, but it’s just a fact of life. How many local music stores do you see around? I occasionally see a Fry’s in a mall, but they’re few and far between. The vast majority of people are buying their music online now.
Should we still be shopping at local CD stores, just to support local business? Sounds ridiculous, doesn’t it? You have to keep up with industry trends. Change and grow with your industry. Sometimes that may mean drastic changes to a business, or even the hard decision to get out of an industry.
So, take a hard look at your business and your industry. Are you ready to compete with the big guys? Can you offer something they can’t; can you do something better or faster?
I hear what you’re saying and agree with your point about ‘guilting people into shopping’… question: would you consider their point of “shop here and $68 out of every $100 stays in town” to be a USP? If not, why?
Thanks again for the post. I followed @wadeontweets link.
Great post.
To take your argument a step further, some business owners feel that their product is unique and better than their competitors’ offerings. Yet, they do very little to show off that difference, assuming that people will see it for themselves.
Sometimes, that difference boils down to “We’re local; they’re not.” As you’ve pointed out, that’s not enough.
Even the chains have local people working for them, who need that income to support their families.
I’ll shop based on my criteria, but not out of guilt. If small business owners want to compete, many professionals are ready and willing to help them do just that.
Trav, it’s not motivator to ME that more money stays in the local economy, but I also own an international e-commerce company. So in a way, all the people that shop at my company are NOT local but are contributing to our local economy.
Some things make sense to buy locally. Some don’t. I don’t feel bad buying my books from Amazon, or electronics from Crutchfield. I really don’t want to have to drive 100 miles to buy a car though.
What about you? Does it (really) matter to you that more money stays local??
I’m still undecided. It seems that there is a trend being noticed by some economic folks… along the lines of ‘during these past couple of rough economic years, smaller local banks and credit unions are weathering it best as are regions with a diverse range of local home grown businesses’.
I understand economics, to a degree… but when it continues to be cheaper for me to drive to Target to buy a tomato that was grown in Honduras, floated across the Gulf, flown on a plane and driven to my town via 18-wheeler than it is for me to go .5 mile down the road on Saturday morning and buy one at the local Farmer’s Market… that just doesn’t seem sustainable to me. That’s a TON of overhead in a commodities market. It doesn’t take but a few decades for it to all earn out.
All that being said, I 100% agree that local businesses need to innovate or get out of the way. I’m coming at it from the publishing side of things and I deal with small bookstores and eBooks all of the time. Every business owner (regardless of industry) needs to educate, retool and get busy. They are all just comfy and afraid. We too maintain multiple websites to sell books and like it (need it) when customers come and buy directly from the publisher.
I’m still curious, what would be a motivator for you, owning an international e-commerce company, to shop local?
Trav – I look for quality, convenience, and a good price. Not necessarily the best price, but a reasonable price. I do shop at my local Farmer’s Market because the prices are better and the produce looks much more fresh than at Walmart or a grocery store. On grocery shopping day I typically visit Walmart for dry goods, the grocery store for meats and some other items and then the Farmer’s Market on my way home.
I always frequented a local coffee shop because their coffee was far superior to Starbucks (until they went out of business, anyway).
I also like going to locally owned restaurants. I’ve never liked chains much, I think the quality is much better at local restaurants even if they cost a bit more.
Great post, Brandon. I definitely agree.
I have to say, I really don’t care that much about supporting local businesses. I live on the Outer Banks of North Carolina and you have all of these overpriced shops out here. If they can survive, cool, but I’m not just giving them my business like they deserve it for some reason because they are local.
I want a good price (or the best price for many items that I might do some quick comparison shopping for), quality products and reliable support/customer service. Companies that provide this to me, get my business on a repeat basis.
We both love Amazon.com. I own stock in Amazon.com because I loved them so much. Why do we love them? Because they have shown us that they consistently provide low (often the lowest) prices, with reliable delivery and excellent customer service. It is to the point where I don’t really even bother comparison shopping on some items. I just buy from Amazon.com. They have earned my business over a period of years and thousands and thousands of dollars spent.
In this day and age, you don’t know where the money is going most of the time, anyway. Wade had a great example. Look at Wal-Mart and the number of people that will depend on a given store for employment. Heck, consider the shareholders of Wal-Mart, who own stock directly (like me) or through a mutual fund or retirement program. You just can’t say that if you spend money at a chain, it goes away, because the world is far more dynamic than that. As an aside, Sam Walton was just a local business.
Local businesses have to compete with pricing, with quality and with service. They have to market, they have to use the internet to their advantage. They have to be creative and they have to be good business people. Being local just isn’t enough.
Patrick
I understand what you are saying. Many small business owners have the mentality of “Field of Dreams”, )if I build it, they will come). That’s their only business model.
I met with a local small business back in February. They needed their logo redesigned. I provided a quote and contract. They signed off on it.
When the logo was finished, the invoice was rendered. The owner was SHOCKED that I would charge them for the logo work.
She said, (not kidding), “I thought you were doing this for free so that you could build my website”.
It’s the same with “shop at home” programs you see in small towns around the country. The shops/service providers seem to think they have a right to local business. Never mind, they offer nothing different in the way of products, provide no added bonus to shop with them or, provide any type of outstanding customer service.
Most have no concept of marketing their goods or services to anyone. When you mention a website or other marketing tool, they act as if you just landed in their store on a purple camel and have three eyes and a hump.
Sometimes you can lead a horse to water…
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@Patrick, you’re exactly the kind of person we don’t need around. You have stock in Amazon AND the god awful WalMart that pays its workers crap and pay their stockholders A LOT? Not every local business just sits there waiting for us to come–I live in a part of San Diego where almost every shop is independent and they do alot to get customers to come in. No, their prices aren’t cheap like Amazon or WalMart (or a large chain grocer), but I’d rather spend the money there than fatten the wallets of some frickin’ stockholder. And I’m not perfect–I shop at Trader Joes’, Whole Paycheck on occasion, … but I don’t want my local deli, coffeehouse, art store, etc. to close. So I shop there. It would be a loss to the culture of my little part of San Diego. You live in a tourist town–move.
And @Brandon–how can you even begin to be objective about shopping local when you aren’t a local business owner? What crap.
Kay, you shop at your little shops because you choose to… because you don’t want them to go out of business. That’s fine, its your choice. But those business owners can’t possibly expect people to shop there just because they are local businesses, regardless of price or selection or any other USP. It just doesn’t work that way. They have to find a way to differentiate themselves from the competition – they have to do something better.
And regarding your snide comment toward me, do you know anything about me? I most certainly do own a small local business and have for over ten years. I have owned several local businesses over the past decade, some retail some service based. I find your attitude and ignorance insulting to say the least.
I am, far and away, not a financial or economic expert. But I think the KEY rule to the 3/50 project is to find three stores that you’d miss if they were gone. So one of the key ground rules and assumptions of this model is that you ALREADY frequent these stores and you ALREADY are a patron there. It’s not asking for any more than that.
I can not fully agree with you on this. It’s not about guilting the customer. It’s amount supporting local businesses that pay taxes and keep homeowner taxes down. I am from a town that has few businesses, our property taxes are very high. It is hard to fundraisers – no businesses to help support them. When your town has its annual celebrations once again no businesses to help support this. I do agree it is up to the business owner to run their business and market it for you to want to shop there. I am totally for shopping where the prices are the best. We have a local grocery store, some items are a few cents higher than the chain grocery store 10 miles away. I took the time to figure out how much I am saving to drive the 10 miles. Absolutely nothing when I included my time and gas. I look at it this way if the local store or restuarant has what I want and the price is right I am going to support it. I want to support it to keep the town going. I love to buy off the internet – not paying taxes on an item when the state you live in pretty high can save a ton of money OR does it. Shipping prices will knock your socks off and you have to hope you don’t have to return the item because shipping it back is a hassle and costs a ton of money.
Aloha Brandon,
My reply here may be a little late looking at the dates of the other posts, but hopefully not lost. My Father and I have a small retail store in Lahaina, Maui. While I understand and agree with some of your points; I have to say that I think you may have missed the elegant simplicity of this initiative. It states quite clearly and most importantly from the start, “…which three independently owned stores YOU WOULD MISS if they where gone.” I really think that sums it up. I don’t see the guilt factor here. I see encouragement to assess your local options and make local choices where they reasonably apply. Of course the local music store is a thing of the past. I enjoyed hanging out there as a teen thumbing through the albums and tapes and flirting with the cute music savvy boys who worked there. What fun. I now buy my music online along with most of the rest of the modern world. Absolutely nothing wrong with that. I would hope no one would open a store of this nature and expect people to get in their cars and drive down there to buy a CD from them just because they are locally owned when they could simply sit on the couch and down load just the songs they liked and listen to them instantly. That’s simply insane! (I use the music store analogy as only one example of the many possible.) It seems to me that your attack on this little idea may be a little narrow, short sighted, and unwarranted. While I’m sure, sadly, that there are people out there that think local is the only criteria of concern. I would like to think most of use are more thoughtful than that and that those that aren’t are simply insignificant. You your self essentially stated that you frequent local restaurants and the farmers market because the food is fresher and its consistently of of higher quality. And there you have it, you are already doing you part to support your local economy and it benefits you as well. I don’t think sacrificing quality or customer service is in any way implied by the basic spirit of the 3/50 Project. I believe most of us would easily choose the locally, organic grown tomato that actually tastes like a tomato for a buck more over the the imported or factory farmed, genetically altered options. If someone hasn’t considered this then this idea asks them to so for the benefit of the consumer as well as the local farmer. We all just need to use some” common sense here. I don’t think there is really a conflict. The internet based businesses like yours nor the corporate conglomerates like Starbucks are not necessarily or realistically the downfall of ALL small business. (Most of us with taste buds know the for mentioned coffee is crap.) Yes, some will fail.. and for a wide variety of reasons. Wether it be simple mismanagement or the simple fact the product or service they provide is out dated or has become available more conveniently and less expensively by way of time and/or money. We all as business owners, small or large, must adapt and be accountable and responsible to our communities and country. I really feel this initiative has merit. I feel it is in the spirit of encouraging good business and responsible, educated consumerism. I don’t see a demonization of all corporate or Internet business here. Taking a little time to seek out the locally owned gems in our own communities or even while on vacation is beneficial to us all. Our store has been successful for over 30 years. We enjoy significant repeat business from both visitor as well as local patronage. We have a very unique store and offer high quality and value at a fair price, fantastic personal service, extensive knowledge of our product and provide many with education. We don’t and have never advertised (save the magnetic signs on my Dad’s truck), we have never had a sale and we don’t give discounts. Our prices, if you can even find products else where to compare them with are very competitive. All this in a sea of stores in our area crammed with t-shirts and dancing dashboard hula girls made in China. And there are other businesses in our little town that offer high quality, and competitive pricing. Just today as I began my reply here a lady came in that had driven an hour from the ritzy Wailea area to buy a $40.00 item because they had been in our store a few days before and she recognized that though she could have found a cheap imported version at the convenient general store, it lacked the quality, value, and general coolness of what we had to offer. That said… If you’re ever on vacation in Maui. Keep your eyes open for the little store on Front Street like no other. We will happily and without shame take your hard earned money in exchange for something special and delightful at $4.00 or $55,000.00. We are, after all, capitalistic dogs. *giggle* And ask me where to dine or where the other great stuff is. I promise to do the same where ever I may travel.
Mahalo & Aloha, Thoughtfully,
Diana
Mahalo,
Diana
Hi Brandon,
I can see your point of view, however, you also have to relize the 3/50 project isn’t just about shopping and buying items. I am a massage therapist I provide a service the 3/50 helps with some advertising, I also visist many health fairs in my area and do some minor advertising. Not all business can just walk into a bank and get a business loan, even with a great business plan I was still rejected so I have used my personal money to get me started and have been in business for 2 years now with word of mouth referrals, and good ole’ hard work. For me the biggest challenge is educating those who think massage is a luxury, if you go to a fancy spa yes it is, for me I work more on the preventive care side of massage.
I wish you the best in your adventures, God bless
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I am acutally doing research on the 3/50 Project because I’ve been asked to write an article for our local paper. I have read the 3/50 main website and many various article written on the Project. This is, thus far, the only negative perspective I’ve read. As a matter of fact, most publications applaud Ms. Baxters approach in the 3/50 when comparing it to similar “grass roots” type projects. Interesting enought they applaud her for the very things this page seems to ignore. She never once suggests that people should NOT shop at “big box” business or internet businesses. She only asks that people become aware of the small businesses in their area and simply choose 3 per month in which to spend a TOTAL of $50. That is barely $15 per business, per month. There are other sites that break this formula down and show how this simple act of awareness, trickles down and can strengthen the local economy…schools, property taxes, federal grants, hospitals, etc. It’s certainly worth checking into. With a parent in a local nursing home and children in schools, I am aware of the affects of funding cuts because of lack of tax revenue. Any small thing we can do to help is atleast worth the consideration.
Kacy, thanks for your comment. I really appreciate your opinion and agree with you that raising awareness definitely helps. When I wrote this post several years ago it was because of how the 3/50 Project was being promoted in my local community, and how it made both small and large online retailers look like “the bad guy.” I’m a proponent of shopping local and do shop local whenever I can find the product or service I am looking for at a reasonable price with good service.
But I’ve seen too many small businesses put all their hopes into these grassroots awareness campaigns, instead of spending their resources into effective marketing, or pivoting their business model into one that will be sustainable in the future.
And I’d like to reiterate my point that the main reason a lot of small, local businesses are struggling isn’t that people just forgot they were there. It’s that they never knew they were there in the first place (lack of effective marketing) or they don’t have a USP (unique selling point) to compete on. It doesn’t always have to be price, but there simply has to be a reason for me to shop there. I (and the vast majority of people) are not going to pay more, get inferior service, or drive out of the way simply because a store is local.
So while I agree that raising awareness is a good thing, I think small businesses would be better served in the long term by learning to build their businesses for the 21st century. There are tons of free resources online, SCORE chapters and the SBA in local areas that offer free advice, and associations like NRF, NFIB and NSBA that offer training, articles, and case studies that can help small business owners