A Way to Save Local Business?

In recent years, people have been trying to “save” local businesses. It’s just that when you actually look at the practicality of keeping things local, it often becomes difficult if not impossible to get what you want, and also keep things local. It’s another one of those chicken and egg problems. Let’s see if we can figure a way out of it. I think a good way to go about this is to examine the pros and cons of local vs. big businesses, and try to solve them one at a time.

Let me begin by talking about what local stores already win at. They win at customer service. If someone runs a tiny shop, they are much more likely to actually care and know about the products. They also excel at proximity and speed. When you buy something, you get it immediately. Because they are close to your house, you don’t have to travel far to get there. You might even be able to walk there. They have the advantages that all brick and mortar stores have, that you can see and try the product before you buy. And because they are local, money you spend there stays in your community and boosts the local economy, which is good for you. It’s almost like getting a discount in the form of the rising tide lifting your boat.

Now for the problems. Local businsses have a severe lack of product selection. This isn’t just a problem for local stores, though. It’s a problem for brick and mortar stores of all sizes. I look around at a lot of the stuff on my desk, and in my room. Very little of is has ever been available in a brick and mortar store. My laptop, my monitors, many of my books, and almost all of the parts in my computer are almost impossible to find anywhere other than Amazon, Newegg, etc.

How can we increase the selection of goods at a local shop? Right now distribution is setup such that the giant warehouses ship things to a few relatively spaced out big box stores like Best Buy. What if instead of a Best Buy ever few towns, there was a tiny electronics store in every town, more like Radio Shack size. Now what if all of those stores got a daily shipment from a regional warehouse that carried absolutely everything. You could order online, but then pick it up in a very local store within 24 hours at no shipping cost. I’m not a distribution expert, so I don’t know if this would work, though.

The other major problem in local shops is higher prices. Look at the insane discounts Amazon is able to give on just about everything. Even if you go to a big store like Borders can you get that kind of discount without a coupon or special deal. Those discounts are Amazon’s every day prices. How can a smaller store possibly compete? They can’t work in the same sort of volumes as bigger stores, and thus can not get the same bulk discounts.

I think the answer to this might lie in taxes. I’m talking about business taxes. Obviously the employees of small businesses will still have to pay income tax on their wages, but there should be no taxes on businesses that have smaller than X employees and make less than $X in revenue. Amazon will still be able to lower their prices and pay their taxes no problem, but a local business with no tax might be able to compete. Maybe we can do something with sales taxes, too. If you live in the same town as the store, you pay less or no sales tax. Something like that.

Another problem with local businesses is hours, even with restaurants. Most people with money work all day, and maybe they evne commute. They can only patronize a business that is open before or after work. When I was in college, many things were open 24/7. Near my house now, many places open late, close early, and are not open at all on Sunday, holidays, etc.

For non-food businesses I think the simple answer is technology and delivery. Imagine if instead of going to Amazon.com I went to my local bookstore’s web site. It would have live updates of what was in stock, prices, everything. As I said before, I would be able to order something that could arrive in store the next day. However, I should also be able to get home delivery for a much lower cost, since only local postage would be required. Heck, the proprietor of the store might even be able to deliver it themselves, or have an employee do the deliveries. This way, even if the store is physically closed, it is effectively open 24/7.

With things the way they are now, shopping online is really the only way to go for someone like me. Even in the cases where a local store has great customer service, which I do appreciate, that doesn’t justify the higher prices and decreased product selection. I do think, though, that if local businesses step up their game, they can definitely compete, if not beat, the big competitors. As of now, they just aren’t.

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