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Old 07-08-05, 03:34 PM
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patc
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Originally Posted by phidauex
The farther money must travel, the more hands snitch their share, that is a pretty good economic truism. You want more money in your community, since that means more money to spend on your services. If the money must make a very long and circuitous route back home (non local business), it will be less than if it had a short trip (local business). Now, I'm not a 'local nazi', but the idea of buying local as a way to support localized economies (which we are more equipped to change as individuals) is economically sound.
I won't disagree with you, but I think the picture is more complex than that. For example, the LBS next door may buy directly from a US supplier, so much of the money involved in that item is not local. On the other hand I may order something from MEC which could ship from their BC warehouse, but is manufactured in Canada by a Canadian company. Which one is more local?

Local stores pay property taxes locally. I pay GST (federal sales tax) on anything I buy from any source, and I pay PST (provincial sales tax) on anything I buy in Ontario, anything I import from another country, or any item my business buys from another province or I manufacture for my own use. Beyond these taxes, though, I think it is all but impossible for a consumer to know where the money he/she pays for an item really goes.


I totally agree with you! Goods are so much cheaper online, because that business model has so much less overhead, and no brick 'n' mortar store can compete on price. ..... Shops that forget this powerful fact die quick and painful deaths.
First, lets not dismiss the price argument. A new Canon 20D will cost me about $2000CAD after shipping if I order from B&H in New York. It will cost me about $3000 locally. That's not a small difference!

Secondly, as you state above, lets not dismiss service. Going back to bike stores to stay on topic, I think the stores that will survive are the ones who take the service approach. You can buy a new bike on-line. You can try out new bikes and have your bike properly fitted to you at the LBS. Since the LBS can't win the price war, they need to stop advertising prices only and focus on advertising (and delivering) the service.


Again, I agree! There is a lot of product out there, and I'm usually incredibly specific about what I want. If I need a cable, or a tube, I could care less about brands. But I usually know exactly what tire I want, exactly what seat I want, etc. I can't rely on a small shop having that much stock.
In a way, consumers now shop more like businesse used to. When I worked as a printer for a photo studio, the boss never went out to a store for supplies. He would call a large supplier in Montreal have have them ship cases of paper, film, and chemistry to us. While most consumers don't buy in large quantities, we have adopted the business purchasing model: we want to call or click and say, "give me X boxes of item Y." We know what we want, and we want the purchasing process to be simple and efficient.

Its good you understand this. Anytime business models change, lots of people gripe about how their livelyhood will be destroyed. But business always changes, and the businesses that survive are the ones that are willing to adapt. I hope your photography business does well. It doesn't matter how many discount prints people can crank out of their discount digital cameras, the quality of the photo won't compare with a professional portrait, and thats a service you can count on.
My business is new, two years in I'm almost breaking even. The long term outlook is good, and my business model has been well received by clients. They sometimes are startled at my shooting costs, but I explain the service they are getting and most are quickly satisfied. I also point out the low print prices, and they they can do their own printing if they want to. That is VERY well received.

Staples/Business Depot in Canada (may be the same in the US) has adapted well to the new way people shop. I can order items on-line and get them delivered, free, to my door the next business day. The price is the same as the retail prices in the store. The web ordering system lets me keep shopping lists. FutureShop, Canadian Tire, and other large retailers have also been adapting the same way, and it seems to be working for them. Its true that smaller retailers won't have the resources to do this, but they smaller retailers are probably better served by the service model (or service-with-goods model) than trying to compete strictly as goods suppliers.
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