In today’s economic climate, one should consider the benefits of buy local when they are planning their next shopping trip. Why is this so? Simply because the price of an item directly relates to the cost of production. The lower the cost of production, the cheaper the item will be. This is why items bought locally make much more sense in the long run.
The benefits of local purchasing extend beyond simply saving money. The purchasing of locally produced goods directly impacts the surrounding market conditions. For example, items produced in a particular area are likely to sell for less than items produced elsewhere in the country, even if the latter is branded. This is because in many cases a local business has access to suppliers who can provide lower-cost raw materials and components, thus allowing them to offer competitive prices on their products. The resulting effect is that locally produced goods typically sell for less than those sold by national chains.
A related benefit of local purchasing is the reduction in transportation costs. One might assume that the purchase of locally produced goods means the consumer is simply being picky in the area where they live. But this isn’t always the case. Consumers have a wide range of reasons for choosing and purchasing local products. The most important of these reasons are:
The existence of a close relationship between consumers and producers is the basis for consumer loyalty and the success of the local economy. If there are sufficient supply and competitive prices then consumers will be more inclined to patronize local businesses. The existence of two ways of making economic contact between producers and consumers ensures that the market conditions favor local businesses. First, consumers who are exposed to high quality and affordable products will tend to patronize a company that they perceive to be in their local area. Second, local businesses use these opportunities to develop mutually beneficial distribution systems with producers across the United States and abroad.
So, why is it that some companies choose to bypass the important work of building special relationships with local producers? Two factors come into play. First, some companies believe that it is more expedient to make purchases from larger corporations with lower labor costs. Second, some companies feel that developing special relationships with smaller producers will create a “local” feeling which gives the company an “anchor status.” However, building such relationships does not necessarily translate into a higher profit margin or improved customer service.
The most compelling explanation for why some companies choose to bypass the important work of developing relationships with local producers is the so-called “impotence objection.” According to this objection, companies can easily satisfy all their needs by purchasing globally because there will always be a buyer regardless of whether a product is made locally or not. The “impotence objection” is a reductive view that ignores the fact that the development of relationships with local producers can have serious consequences for their bottom line. This rationale essentially prevents companies from taking advantage of the unique opportunity presented by the current global marketplace.