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Why shopping local matters
December 9, 2016

Thankfully the election is over and holiday shopping is now in full swing. While your one vote is important, your continued shopping decisions can have a tremendous impact year-round.

There’s something magical about the holiday season as well as the magic of what is called the multiplier effect. That means the decision you make on where you spend your dollar goes much further than most of us realize.

I’ve written about this before, but it’s a good time of year to review the power of spending with a local merchant.

According to the American Independent Business Alliance, the multiplier is measured by three elements:

  • Direct impact: Spending done by a business in the local economy to operate the business, including inventory, utilities, equipment and pay to employees.
  • Indirect impact: Dollars that recirculate as the local business spends money at other area businesses.
  • Induced impact: Additional consumer spending that happens as employees, business owners and others spend their income in the local economy.

So what does this all mean to the local economy? At least 10 studies have showed that there is a greater local multiplier when money is spent at independent local businesses rather than large chains. That means more local money and more local jobs when money is spent locally.

On average, 48 percent of each purchase a local independent businesses was recirculated locally, compared to less than 14 percent of purchases at chain stores. The total impact of the dollars does not stay in the local economy but actually generates additional local economic activity after additional spending cycles.

This is not an indictment of the big chain stores – their presence and variety helps round out and strengthen the appeal of a local shopping economy. It’s just a reminder that consumers have many choices and considerations about what happens to their money after they purchase a product or a service.

Local is the focus of the Black River Area Chamber of Commerce. Our mission is to help promote and grow local businesses. That is accomplished in many ways, but the simplest and easiest is where you choose to spend your dollar and the dividends that can result from that. That’s something we can all promote.

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