Celebrate Cider Monday to bring attention to the effects of online sales on your community.

You love the idea of buying local, but the next thing you know … click, you bought that blender online from a business based far from your community. It’s so easy! And your one purchase won’t really make a difference… or will it?

The Multiplier Effect

Independent retailers return, on average, $48 of every $100 spent at their business back to your local economy. This money recirculates through your community, boosting job growth, charitable giving, and civic engagement. While national chain stores return $14 of every $100 spent, for Amazon the money returned to the local economy (called the multiplier effect) is close to zero.

“The Multiplier Effect results from the fact that independent locally-owned businesses recirculate a far greater percentage of revenue locally compared to absentee-owned businesses. In other words, spending locally creates more local wealth and jobs. .”

~ The Local Multiplier Effect

Job Growth

To get more specific about jobs, Amazon sales resulted in a loss of 900,000 retail jobs nationally in 2018. This statistic comes from a 2019 study by Civic Economics and American Booksellers Association called Prime Numbers: Amazon and American Communities.

Tax Revenue

As these sales go to Amazon, instead of locally based businesses, state and local governments lose tax revenue.  Lost sales taxes in 2018 totaled $5.5 – $7 billion in the US. In some communities, the cost to taxpayers is even more significant when economic developers offer tax rebates and subsidies to attract Amazon to base some of its operations in their region. In 2012, Amazon received $8.5 million in subsidies to build a new warehouse in Delaware and $2 million in tax credits to expand its presence in Indiana.

Land Use

The rise of online shopping, undercutting Main Street retailers, also changes land-use patterns. Amazon warehouses aren’t placed downtown but in remote industrial parks. The Civic Economics report concludes that demand for Main Street storefronts will decline, along with city and town government’s tax revenue base.

Read the full Prime Numbers report.

“Amazon provides a valuable convenience, one that tens of millions of households (ours included) are willing to pay $99 a year to maximize,” said Matt Cunningham from Civic Economics. “We do not believe, though, that Americans yet comprehend the nature of the tradeoffs to come. They may be asked to accept an increase of hundreds of dollars in annual household tax burden to pick up the slack from the stores they visit less often. They may be required to fund redevelopment efforts around struggling commercial districts and failed shopping centers, or to live with the boarded-up storefronts.”

How can AMIBA inspire you to shop with your values in mind? Are there opportunities for independent businesses to adapt to the pressure of online shopping? Let us know what you think by emailing us at jenrisley@amiba.net.

Remember, every purchase — and click — counts. Please think before you click this Cider Monday and every day!

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