The Gross National Debt

Thursday, December 16, 2010

High Tech Redneck

Shop online much?

Ever wonder what it’s costing you to do so?

Some years back before digital cameras were ubiquitous and we still used film, I dealt with a camera shop in a nearby town. Got enlargements done there, 1 hour prints, bought speciality films like VPS and others.

She also sold camera gear, which I didn’t buy having invested around $10K over the years in various bodies and lenses (which are now worth about $250 (sigh)). She also did some camera repair.

People would come into her store and ask her about the various models she had on display. They’d fool with the camera a moment and walk out. 10 minutes later they were at a superstore giant retailer where they bought the exact same camera for a bit less, sometimes a good bit less, than the camera store lady could sell ‘em for.

This torqued her to no end.

Come time to get a camera repaired, they did come to see her. Also went to her for enlargements and custom printing, this being before the insta-print machines. The CUSStomers complained vigorously about the prices she charged for repair, enlargements and so forth.

She charged the prices she did so she could stay in business. As business she had all the regular overhead - salary for herself, need to make a profit, rent, taxes, replacing consumables and rotating stock, etc.

As a speciality shop she had an additional expense - a limited inventory. Yes. That is an expense. Because with a limited inventory and a limited product line, she could not spread her costs and expenses and revenue stream across a huge variety of items. She was limited in what she sold. Because of this, she had to charge a bit more to make enough money.

In addition, as a small independent business, she paid more for the things she bought than a giant retailer. A supergiant can negotiate cheaper prices ‘cause it buys in bulk. Bulk means less packaging, shipping, handling and everything that does not “add value” to the end product.

A small business pays more cause it costs more to send small amounts to that business.

But. Her shop offered something the giant could not.

Expertise and experience. She knew cameras and the whole industry around cameras and pictures.

Do you think the giant retailers have that kind of staff?

She’s since folded the shop, unable to compete with digital cameras and computers with laser printers that generate prints as good looking as anything she could do in a darkroom and even electronic storage. But that’s another column for another day.

I’ll tell you a story about expertise and experience. A company had a giant machine break down. No one could fix it. They called a repairman. He worked for about 5 minutes and the machine was running. He billed the company $5,000. The bean counters wrote back, demanding an itemized bill because it only took him 5 minutes to repair the problem

Itemized bill.

Repair $50.
Knowing what to repair and how, $4,950.

When you shop online, you put a hurting on local retailers, the kind of people who employ people in your community, pay taxes in your community and contribute to the Little League baseball teams, high school events, churches and the other things that make for a quality of life in your community.

Eventually local shops will close. It’s happening in my town. Since I’ve been here we have had a net loss of industry and business. Yes. It has hurt my community a lot. Taxes are up. Way up. Government supplied services are down, way down. Unemployment is way up.

But, this is apparently what people in my community want. I am certain they will vigorously object, but as Lil Ed sings “I look for the purse.”

In other words, your money says more than your mouth.

Yes, local folks are typically more expensive in the short term than shopping online. But in the long term, what you are doing shopping online is slowly strangling the life from your community by cutting off the lifeblood of money which circulates there.

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