“Doing business locally can be more convenient, cost effective, and attractive to customers.”
We are living in an age of the buyer’s market. These days, customers are far more discriminating than they have ever been, and it is no wonder because they have more choices to make than ever before, in the market today. As a result of this trending phenomenon, working in the marketplace means adapting to an increasingly demanding public because what used to be mere details, like environmental responsibility and local sourcing, are being scrutinized and favored more and more by consumers. They are looking for the products and services they buy to be closer to home, as it were. Doing business locally can be more convenient, cost effective, and attractive to customers.
Community Relationships to Establish Loyalty
When quality businesses in the same community get together to achieve mutual benefit, or for any reason, the locality is improved while businesses gain loyal customers. A restaurant can sell beverages from a coffee shop nearby; a florist might stock its store with flowers from a garden in town; maybe there is factory producing paper products that you can employ to supply your business.
You will have to look at your bottom line to decide whether it is worthwhile to source locally, but even if it costs you a little bit more, relationships with other businesses in your community can create a loyal customer base. They are more likely to become loyal to you simply because—why would someone choose a national chain (of course, these do offer some things that a mom-and-pop cannot) when they can be a patron of an affordable, independent business born right out of their hometown?
Lower Your Cost
Though it is not always the case, you may be able to cut down on expenses when you get products and materials from producers within your community. There are always trade-offs; so, when you are scouting for local companies who can supply something you need for your own business, be careful to understand what you are getting. Shipping and delivery cost may be lower from a producer nearby, but a large, nationwide manufacturer may offer better quality—or vice versa. Another way you can potentially cut costs is through discounts that a local partner may offer when you agree to enlist them exclusively for a specific product.
Use It as a Selling Point
Including a distinction in your advertising that your product is “locally sourced” or “100% manufactured by Chicagoans, or New Yorkers, etc.” can go a long way to attract customers, even outside of your community. Consumers want to be able to put stock in a company; they want to find places that they can trust, that they can rely on and keep coming back to. It is a hassle to do tons of research, read reviews, and try out multiple businesses, every time you buy something. Give people assurance that they are dealing with a company that they can rely on to be trustworthy and invested in their community, and they will keep coming back.
Impact on the Local Economy
The consensus of numerous studies is that “going local” significantly strengthens local economy and even creates new jobs that would otherwise not be able to exist. In British Columbia, almost 3 times as many jobs were created by independent businesses than chains for the year of 2010—this figure is pretty consistent (and more so today) in every part of the U.S.
In Salt Lake City, UT, independents were shown to invest 52 percent of revenue back into their economy, in contrast with only 14 percent by national chains. Every 58 cents of every dollar brought in by local businesses goes back into Portland’s economy; chains only contribute 33 percent. What we can see is that in addition to the positive impact of “keeping it in the family”, so to speak, people are looking to these businesses before they go to a major chain. Once again, doing the right thing in business proves to actually benefit your business at the same time.
For some simple tips to preserve the larger environment, check out this post:
4 Simple Steps to Reducing Your Carbon Footprint
1. Stacy Mitchell, “Key Studies: Why Local Matters,” Independent Business, Institute For Local Self-Reliance,” http://ilsr.org/key-studies-why-local-matters/#1.
Stephanie is the Marketing Director at Talkroute and has been featured in Forbes, Inc, and Entrepreneur as a leading authority on business and telecommunications.
Stephanie is also the chief editor and contributing author for the Talkroute blog helping more than 100k entrepreneurs to start, run, and grow their businesses.