Should You Support Local Businesses at All Costs?

by Kevin on December 4, 2008

With the economy dropping faster than Southeastern Conference football coaches, I pondered this question last night. Should I support local businesses and entrepreneurs at all costs?

At first glance the obvious answer seems to be, “Yes, of course. Support your local community.” As I thought further I just wasn’t convinced entirely.

The Pros of Supporting Local Businesses

  • You support you local economy which has somewhat of a trickle down effect. How? Imagine you buy your produce fresh from a farmer at a farmer’s market. The farmer retains more profit without a grocery store middle man. The farmer turns around and buys fertilizer, gasoline, and other supplies (hopefully) locally which helps provide income to those businesses and employees. The farmer’s income can also be used to buy everything you might expect from a normal person — movie tickets, sports tickets, clothing, etc. This all helps the local economy assuming he buys from other local businesses.
  • It feels “right”. Why support megacorporations that could care less about you?
  • Local businesses should provide better customer service. This is not a certainty, but usually one would expect a local business to provide better customer service than a large corporation. With local businesses you are likely to develop a relationship with the owner or the set of employees on site. Due to their smaller size, they are also more likely to bend when they are wrong in order to keep you happy. I would also expect the return process to be easier and more flexible.

The Cons of Supporting Local Businesses

  • You may pay a steep price over a large corporation or online-only store. Sometimes small businesses undercut the margins of large companies in order to grab some market share. However I think that is the exception rather than the rule. Usually if you get your car serviced at a local mechanic you will end up paying more than a national chain — the national chain has pricing power to buy cheaper oil, cheaper filters, and cheaper parts.
  • A local business may not have a large inventory. They may only stock really popular items and not be able to quickly meet your specific need without special ordering it.
  • Some small businesses are less convenient than a national chain. Imagine one of your favorite stores in a downtown area, but they are only open until 6pm Monday through Friday. You work outside of downtown and getting down to the store before it closes is near impossible. A national chain is likely to be open until 8 or 9pm on each night and also have more locations.

So what’s the bottom line here? As always… it depends. I like working with local businesses — especially restaurants. Each person is going to have different needs for purchases. I recently talked about buying a laptop and some PC hardware from NewEgg.com. I stick with NewEgg not because they are local to me, but because they have an extraordinarly large and diverse inventory, most shipping is free, and they have great customer service. If NewEgg were a local business I would definitely support it.

What about you? Do you go out of your way to buy local? Or do you go for lowest price no matter what?

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