Amazon has always concerned me, both as an individual and a small business owner. After watching the 60 Minutes segment about Amazon I am even more concerned. Amazon is going to change consumerism even more so then it already has. It is going to continue to destroy traditional retail outlets and other online retailers at an alarming rate. It is going to completely change the landscape.
Small Business Saturday
by Ernest Freeland
Small Business Saturday is this Saturday November 30th. Thanks to American Express it is a day where small businesses and their owners move into the spot light of retail during the holiday season.
Small businesses are important to the economy. Here are some of my favorite facts:
– Local business generated 60-80% of new jobs every year over the last decade.
– For every $100 spent at local small businesses $68 returns to the community.
– Local business employ half of all private sector employees.
Source: SBA, Civic Economics
What I don’t think many people realize is how many of the local communities resources and businesses we use to maintain our businesses. So I made a list of what I use in the running of my small business, it is probably not complete but a good illustration.
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Don’t forget all of the employees needed to run the companies listed above. Sure one business on its own can’t support all of these businesses on their own, but as a group, small businesses support many of the same types of business listed above.
Are you employed by a company that relies on small businesses for your revenue?
If you are does that mean when a discounted sale/service is made in your company that each of the employees take a pay cut/discount on their wages in an equivalent percentage? I highly doubt it.
Factor in all of the sales tax theses businesses generate and the other fees they pay to run their business and the taxes they pay in doing so.
In many cases you can find the same products that are offered locally cheaper. Differences can be so large that you can’t ignore them. But when is something really on sale or general overpriced? Learn more here. In many cases when you factor in the extra value of purchasing local the difference isn’t so great. You save the shipping; you have someone who is an expert in what they do to assist you. Have questions about your purchase or need to warranty it, you have a connection to someone who can help you. With many of these purchases you don’t pay sales tax. Learn here why I think sales tax is important.
We all need to be fiscally smart but as in life all of our decisions have consequences.
If we are always looking for the cheapest solution you are simply engaged in a race to the bottom. This is a bad race for the business and the consumer, nobody really wins.
Lower profits mean less money for payroll, fewer opportunities to grow the business and the workforce and more. Competition is fierce these days and comes from many different directions more so then it used to. For most businesses one of the biggest expenses is payroll and it is one that can be controlled by the business, unlike the fixed expenses.
For our economy to return to greatness it needs businesses who can afford to pay fair wages to their employees so they (the employees) may invest the money in the local economy through the use of local services and purchases.
Posted in My Thoughts
Tagged #shopsmall, #smallbizsat, American Express, small biz, small business, small business saturday
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When is something really on sale? Or is it generally overpriced?
I heard of a survey that stated that 34% of Americans won’t buy anything that isn’t on sale. Initially I found this shocking and surprising but after some thought I wasn’t surprised.
I often wonder: What does on sale really mean these days?
I see more and more deals that I find hard to believe are going to allow the business to be sustainable. I know about loss leaders but some of these deals appear so substantial to be loss leaders.
Examples:
My wife had received a New York and Company coupon “Save $70 when you spend $150”
Or the many Joseph A. Banks promotions like: Buy one suit get three free.
How does that work? Are they making so much on one suit they can cover the cost of three? So does that mean they are overcharging if bought individually?
The other one that gets me, especially today, is when you look at the “sale” price and it looks like it may be a fair everyday price at the sale price and then you look at what the manufacture says it normally sells for which is completely not reasonable when you compare it to what is available. Today I saw a bike that was regularly $3999.99 and “on sale” for $2499.99. If someone paid $3999.99 for the bike they would be getting taken advantage of. It is just such a misrepresentation to the customer. I could go on but I will save that for another day and another post.
I’ve shopped with my wife who loves to take advantage of her Kohl’s dollars and those deals. I guess their regular margin is so high and the volume so large they can afford it.
With everyone always being exposed to these sorts of deals no wonder everyone wants or expects a deal.
For companies that make products oversees are their costs so low due to volume and a reduce cost of labor? Not forgetting the advantage of being your own manufacturer and the cost savings by removing the middle man. I get economies of scale and don’t blame anyone for leveraging what they can. But if you can afford to run promotions on a regular basis that are purchase x quantity and get x quantity free, maybe you are just overcharging to begin with.
I don’t know their business model but can I be the only one wondering?
I like to sell everything at a fair price everyday and offer discounts when I can. It and allows us to build a relationship with our customers and reward the ones that have developed relationships with over time. Most business are in business to make money. This allows them to pay their employees and to pay their bills. If businesses are always running discounts are they over charging when they aren’t? Or is their margin so small they are relying on volume to cover their expenses and not giving them room to grow?
Only each business knows the answer to these questions.
Updated 11/29/2013
Just came across this article and I love their number one reason for not shopping on Black Friday:
1. The “discounts” aren’t real. Over 90 percent of Black Friday deals are the exact same items and prices as last year, according to a recent study. And many other seemingly discounted deals are faked by retailers to give shoppers the illusion of savings.
from the Huffington Post 9 – Reasons to Stay Home on Black Friday 11/26/2013
SALES TAX – Why it is important.
Most states charge sales tax for purchases made locally. This is not surprising. For FY 2012 it represented 13.9% of the States Income. (http://finances.marylandtaxes.com/Where_the_Money_Comes_From/default.shtml)
Most don’t like to pay taxes and I am one of them but I think that sales tax is important. Those who spend more pay more. If you make an on-line out of state purchase in most cases the purchaser doesn’t pay sales tax. In actuality as a Maryland resident you are suppose to report those purchases to the comptroller of the state and submit the sales tax for your purchase. Few if any do. The loss of revenue has to be replaced by the state in some form or services need to be reduced. Saving on the sales tax on your purchase doesn’t mean you are actually coming out ahead. There is a consequence of this decision. A higher tax or fee imposed by the state somewhere or more likely reduced services.
In Anne Arundel County we have already seen a reduction in the number of trash pickups. Many lament the conditions of our schools and the low salaries paid to our teachers. How about our first responders having the equipment and the training to do their jobs to the best of their ability? The states infrastructure is in need of repair, water systems are aging, roads and over passes need repair. How about the improvement of social services to help the less fortunate? I could go on and on but I think you get the point.
The exiting of the sales tax from the state and the loss of the actual sales in the state have great consequences that many don’t consider. So yes you can save 6% and a few bucks on your purchases but what is the true cost of your savings.
A Few Stats:
- For every $100 spent at local small businesses $68 returns to the community.
- Local business employ half of all private sector employees.
Think about how much your purchase can help the local economy. By keeping your money locally you can help strengthen it, possibly help increase the workforce and more. So the next time you make a purchase please give it some thought.
What Should I Bring When I Ride?
My March Arundel Voice Article.
Warmer days are right around the corner and by the time you read this we will be enjoying later sunsets thanks to day light savings time.
Last month we talked about all of the great places to ride locally. If you missed it visit my blog for all of my Arundel Voice Articles. If you have a suggestion for an article please let me know. This month I would like to talk about what accessories are going to make your cycling fun and safer.
Helmet – of course. MD Law requires all riders under the age of 16 to wear a helmet. Wearing a bicycle helmet, besides being commonsense, is the brain’s major protection. Today’s helmets are safer than ever. And they are vented, comfortable and light. Federal properties, such as military bases and parks, require cyclists to wear a helmet. Helmets usually last 3 years or so, depending on use and climate. Always replace your helmet after it has sustained an impact.
Bell or Horn – It’s a Maryland law. The human voice does not meet the state requirement. A bell is a friendly way to signal your approach; and do “ring” well before you pass people.
Hydration – You need to stay hydrated while riding. A water bottle and cage is a small investment. Typically drink one bottle for each hour you ride. Water bottles have come a long way, they are easier to drink out of and many are designed to keep your drinker cooler on the hottest of days. Most of today’s bicycles come with mounting points for at least one if not two bottles. Also available are handlebar mounts. This style of mount is ideal for young children. Going long distances? Try a hydration pack. It can carry up to a hundred ounces of fluid while providing additional pouches for other items.
Photo ID and Emergency Contact Information – If something should happen, who do you want contacted? We recommend a RoadID in a jersey pocket or saddle bag. If something happens, you won’t be alone for long. Or use a luggage tag with pertinent info on it. Cell Phone – perfect if you need to call someone for help. Most of today’s Smartphone’s have apps that can help you track your training, offer navigation and act as a cycling computer. A camera is a great way to create memories from your ride to share for years to come. You never know what you will see.
Gloves –Gloves are easier to replace than the skin on your hands. They’re also comfortable.
Fix a Flat Kit –Spare tube, pump, tire levers. Be prepared for when you get a flat tire. Fixing a flat is relatively and with a little practice you’ll be an expert. If you don’t know how to fix a flat contact me and I will be happy to teach you. Even if you don’t know how to fix a flat it is important to carry the equipment you need to do so. That way a fellow cyclist can lend you a hand in your time of need.
Floor Pump – Proper tire inflation before a ride is key to avoiding flat tires. While not a take along item on a ride checking the inflation of your tires prior to the ride will reduce your likely hood of a flat.
These “essential” cycling accessories will make your riding safer and more enjoyable. I look forward to seeing you out on your bikes this year. Safe riding!