Why Local

What does it mean to shop local?
Did you know that every dollar that you spend is one solid vote towards someone and something? Every time that you buy a coffee, a burger, or a locally made gift, you are voting for that thing to increase and you are voting for that someone (whomever created that thing) to succeed and flourish. So…what are you voting for these days?

Vote for a Creative Omaha
Omaha has a profoundly talented and creative artist/maker community. Made in Omaha’s mission is to provide a platform for these creatives to thrive by connecting them with local customers. By shopping at Made in Omaha, you are voting for these creatives to thrive and increase. The more they increase, the more creative our city becomes. 

Vote for an Omaha that thrives
On the whole, non-locally owned chains and big box stores actually pull money from Omaha’s economy, creating a net loss of wealth, whereas locally-owned businesses generate economic value for the community. That’s a staggering reality that bears repeating: national chains have a negative effect on our local economy while local, independently-owned shops generate value for the local economy. That’s because local businesses recirculate money in the local economy at a much higher rate. On average, for every $100 spent at a local store, roughly $58 is recirculated into the local economy compared to just $31 at a non-locally owned company. And what about Made in Omaha? Made in Omaha recirculates over $91 back into the local economy for every $100 spent at our store. That’s because we not only employ locals, but we buy all our products from local companies, and choose local partners whenever possible (from banking to legal to accounting to printing).

Those economic impacts have vast rippling effects. Local shops result in higher employment in the community, foster community character, generate more donations to nonprofits, and reduce your carbon footprint. So whether you’re considering where to grab your next coffee, or if shopping an international online retailer is really your best bet for a new candle, consider the value of your purchase in terms of its impact upon your community. Vote with your wallet and continue to invest in your community.

What We Wanted to Learn
There are a number of factors by which one can measure the quality, impact, or value of a business. Many measure value based upon shareholder (or owner) profits. People also commonly value a business based upon the product or service offered relative to the price at which it’s offered. Now, people are increasingly looking at the other stakeholders of a business when assessing what “success” means. That includes the employees of a business - are they treated well? Are they paid well? And it includes community members, even those who don’t patronize the business. A new store could change a neighborhood for better or for worse. It could put other stores out of business or it could also increase business for neighboring stores.

As a company, we believe there are many benefits from a global economy. We also believe there to be great value in national and international chain stores that deliver good products and services at fair prices, who treat their employees well, and who benefit the local community. There are countless examples of great companies today that have dozens or hundreds or even thousands of locations. Not all of those companies may have as positive an influence on the local community or economy as a locally owned and independently owned store, but it doesn’t negate the business’s value.

As a company, we’ve chosen a business model that focuses on the cultivation of creativity and community in the place we call home, Omaha. We believe that Made in Omaha contributes positively to our community in a number of ways, most of which differ from the ways that larger, national companies benefit the city. We aim to positively impact our community through encouraging, highlighting, and inspiring creativity, through supporting, guiding, and building local brands, through promoting artists and makers, and through creating good jobs. Many of those things are hard to measure or hard to compare. Thus, we wanted to look into ways that we could quantify our contribution to our community relative to our non-local counterparts.

We did not start our research with a particular metric in mind. That said, we quickly found that the most common metric for evaluating a business’s impact upon its local community is by determining what percentage of money spent at the business is recirculated in the local economy.

Methodology
We began our research by reading dozens of studies evaluating local businesses’ relative impact on their communities. To our astonishment, the data and resources were relatively sparse. One firm has become the clear leader on this type of research: Civic Economics with offices in Tulsa, Oklahoma and Chicago, Illinois. They describe their mission as “Economic analysis and strategic planning for sustainable prosperity.” Civic Economics has led dozens of research projects across the US looking to evaluate the impacts of shopping locally. After their (now-famous) first major study was published in 2002, countless cities reached out to attain their own analysis. Following nearly a dozen similar studies performed by Civic Economics in other US cities, they formed a new Indie Impact Study Series which enabled cities and municipalities to conduct their own analyses. Since 2012, well over a dozen US cities have contributed to the studies, compiling thousands of data points. In aggregate, Civic Economics found that national retail chains recirculated just 13.6% of their revenue compared to 47.7% at independent retailers. For national restaurant chains, they found 30.4% of revenue to be recirculated locally compared to 64.9% at independent restaurants.

You’ll note that in our article, we listed the numbers 31% and 58% for national and independent businesses respectively. We took a deeper analysis at 6 of the studies that seemed most applicable to Omaha and created a blended average of both retail stores and restaurants. We then weighted both results to give national chains the benefit of the doubt and provide a more conservative comparison, thus increasing our confidence in the conclusions that we can draw from these numbers.

Some of the studies are linked below. More can be found searching for Civic Economics Indie Impact Studies online.

Now what does that mean when we say $91 dollars of every $100 spent at Made in Omaha is recirculated in the local economy? Funds can leave Made in Omaha in 4 ways: wages, profits, purchases of product, and expenses ranging from accounting services to legal services to cleaning services to insurance. To determine how much of our revenue is recirculated in Omaha, we analyzed these categories. We then categorized everything as “local” or “national" depending on where each company's headquarters exist. 

This is the same methodology used by Civic Economics to establish what local retailers and restaurants in dozens of US cities recirculate in their local economies. This is then compared to the national numbers for national entities. These values are based upon public financial filings. While not all of these numbers can be identified in granular detail, there are multiple ways to validate the overall conclusions.

 

Aggregate Resources:

Civic Economics

Institute for Local Self-Reliance

American Independent Business Alliance

 

Specific Studies:

Monadnock, New Hampshire 2014

Hudson Valley, New York 2014

Albuquerque, New Mexico 2013

Salt Lake City, Utah 2012

Portland, Maine 2011

New Orleans, Louisiana 2009

West Michigan 2008

San Francisco, California 2007

Andersonville Study