How Buying Local Lifts The Economy

We have all heard the phrases ‘buy local’, or ‘shop small’ which encourage you to support your local small businesses by buying their products. While it may make you feel good to support Mrs Smith down the road and help her to pay her bills, supporting local business can actually mean great things for your town. Your community might actually depend on the Mrs Smiths and the Mr Jones’ to survive and function. Here is why…

Money Stays

At the most basic level, shopping local means that the town’s money stays in the town. This helps the town’s economy thrive instead of plummet. If there isn’t enough money coming into the local economy, then the smaller independent business will struggle to make the money they need to stay open.

One of two things can happen then. Either the shops close and it becomes a ‘ghost town’, void of shops, cafes and restaurants. Or it becomes a ‘clone town’ where the chain stores all move in. When the chain stores move in, you can’t shop local so you can’t find the unique treasures that used to be available.

Gaps In The Market

Having a gap in the local market is how innovation comes into its own. If people are constantly going online to buy gifts, or are hunting the shelves of generic chain stores, then that means there is space for someone to open a local gift store.

When that gift store opens, it provides opportunities for local craftspeople or artisans. The gift shop then becomes a vehicle for selling local goods created by other community members. Instead of feeding the coffers of the big chain shops, you have suddenly created earning opportunities for multiple locals.

You Know What You Are Getting

When it comes to buying stuff online, you will have your own tale of terror, or know someone that has one. Pictures and descriptions can be deceiving – you don’t always get what you think you are paying for. That can mean a completely different item, or the materials that are used to make your product. Not all countries operate at the same quality standards, so you could be receiving subpar materials.

But when you are in a local shop, you can see what you are getting right there in front of you. You also have the added benefit of reducing the environmental cost of delivery and transport.

Local Resilience

Having a local community of producers and service providers can ensure consistency. You are not reliant on favourable exchange rates, low oil costs, or other transportation fees. At a local establishment, the price will always be what is listed on the price ticket. Especially if they are able to source their ingredients and components locally too.

If another recession were to hit, then your community would be relatively untouched if they are able to provide for each other without an international influence.

Speed of Exchange

This might get a bit technical, but bear with us for a minute. If money circulates at a faster rate in the community, then it passes through more hands quickly. That means more people get to benefit from the things the money has bought them. Make sense?

For example, if the money goes into your local food market, they can spend their profits with other businesses. So they will be able to purchase more goods to sell in their store, pay the local printer for advertising material, pay the local tradies for maintenance and upkeep of the store, and also pay their employees.

All of those people can reinvest their earnings back into the food market. Everyone gets to eat and lots of locals get to enjoy spending the money they have earned. The money continues to go around in a circle and all of the community have a share in the benefits of it.


Buying local can save communities. It doesn’t mean to say that the community needs to have a lot of money to spend in order to be successful. But if the money that is currently in the community stays circulating within, none leaks out. If none leaks out then it can continue to circulate and keep funds in local pockets!