People may often see the terms “shop local” or “buy small” used in several different advertisements, including on bumper stickers and in-store signs. These terms are also widely observed on Small Business Saturday, a shopping day held the Saturday after Thanksgiving. Beyond the feel-good nature of supporting neighborhood businesses, shopping local creates real and sustainable economic growth for communities. This is because of money concepts such as circulation and velocity. Essentially, when you shop local your money stays local. Shopping locally affects everything from employee wages and new job creation to the overall growth of the local economy.

Recycled Local Dollars

The Urban Conservatory’s study, Thinking Outside the Box: A Report on Independent Merchants and the Local Economy, found that if people shifted 10 percent of their spending from chains to local businesses, it would create hundreds of millions of dollars a year in local economic activity. This is due in part to local and independent businesses that tend to source and hire vendors that are also independent. Many national and international chains outsource most of their jobs to other communities.

Another study by the American Booksellers Association, Civic Economics, and Local First Utah, supports this idea as well. It found that local shops returned 52 percent of their revenue back into the local economy whereas chain businesses only invest 14 percent of revenue into local communities. As a result, local purchases do not only support that shop, but their suppliers as well.

Local Job Creation

Local businesses not only support other local companies, but they are more effective at creating local jobs when compared to national chains. When national chains move into a neighborhood, local jobs are often lost. Furthermore, small businesses owned by minorities or people of color are more likely to hire from within their communities, creating more jobs for groups more affected by unemployment. Shopping at small local businesses will directly support equitable job creation in local cities and towns.

Better Customer Service

Have you ever shopped at a local store or ordered something online from a small business? Chances are you received warm service, hand-wrapped products, and a unique touch you may not find in national chains. On the social media platform TikTok, for example, small business owners have gone viral for their “Wrap Orders With Me” videos. These videos showcase the care and attention that goes into each purchase they process. In addition, these vendors add handwritten notes and thank you letters with each packaged order.

How to Find Local Businesses

• Check out your local chamber of commerce directory.
• Use social media sites to find businesses in your area.
• Search your city or state at online commerce sites to find small business owners that create products near you.
• Take a stroll through your downtown, main street or other commercial corridors and spot storefronts that are new and unique.

Can’t Find What You Need Locally?

Online commerce makes it possible to buy clothing, home items, gifts, pet toys—almost anything you can think of—from a small business rather than going to an international chain. For instance, the next time you are book shopping, consider using small book vendors rather than large online chains. In this way, your dollars still support families, communities, and individual book owners rather than publicly traded corporations.