Heart of Business: Shop local

For those who like to shop local, farmers markets are at the "way local" end of the spectrum and shopping online at Amazon is at the other end, said Dave Cavanaugh, local businessman and Heart of Business member.

He said Amazon.com has become one of the largest online retailers in the world because it is "cheap and efficient" for shoppers, and while that is great for Amazon, the result is a negative impact on the local economy.

"It's not all about the lowest price or the best convenience," Cavanaugh said. "It's about strengthening and supporting our local community and our local economy."

About 30 members of the Heart of Business, a local networking group, gathered for a monthly business luncheon last week at Coeur d’Alene’s Greenbriar Inn to learn about the impact of shopping local.

Cavanaugh said for every $10 million in sales, Amazon employs 19 people, while local business employs 47 people for every $10 million.

Amazon has no physical presence in most communities, Cavanaugh said, and therefore pays no property tax. The sales tax leaves the local area as well.

"If more and more of our retail dollars, instead of going to businesses here, end up leaving entirely to go to Seattle, what does that mean in terms of who has to shoulder the burden for all the things the taxes pay for?" he said.

Sales tax pays for education, health and human services and public safety, Cavanaugh said. Property taxes provide county government, 911 service and other justice services, such as courts, sheriff and public defenders.

"Over half of the funding here in Kootenai County, the services here, are paid for out of property taxes," Cavanaugh said. "So when you think about money that stays in our economy, or spent by paying taxes by buying locally, these are the things that it supports. You go to Amazon, you don't pay sales tax and this stuff is not supported."

He said a group called Civic Economics held several "impact studies" focusing on local revenue recirculation in communities. The result was, when shopping in local retail, three to five times more money stays in the community. Eating at local restaurants, rather than Applebee's or other national chains, $65 for every $100 spent comes back into the economy.

When shopping online, less than $1 comes back into the community for every $100 spent, Cavanaugh said. Shopping at big box retailers or chain stores, such as Walmart and Target, brings $13.60 for every $100 back into the community.

"If you really want the most bang for your buck, you will go to a locally owned, independent retailer," he said. "That way, $47 to $70 out of $100 comes back into the economy and stays in the economy."

He said with 46 chain stores and restaurants in Kootenai County, if just 1 percent of the revenue shifted to local business, more than $3 million would recirculate locally.

"I am not saying it's an all-or-nothing," Cavanaugh said. "I am absolutely not saying 'stop going to Walmart, stop going to McDonald’s.' And I'm also not saying to stop shopping online."

He said some people live paycheck-to-paycheck and the lowest prices are the "only thing that matters." Also, he said, Walmart is the seventh-largest employer in Kootenai County, so loss of business for Walmart causes another problem when jobs are lost or impacted.

"We all have to co-exist," he said.

Nels Jensen, founder of the Heart of Business, said the group is made up of about 300 business men and women throughout the community.

The mission of the Heart of Business is to "protect and grow local business," and enable businesses to succeed by providing them with resources, including weekly and monthly meetings. The group launched the “shop local” campaign last week.

"It's the core of what we do," Jensen said. "You can provide all sorts of benefits for people, the library, the trainings, they'll perhaps inspire you to change, but when it comes right down to it, shop local has more teeth. It's really what's going to keep our businesses afloat."