What does it mean to shop local? | What We Wanted to Learn | Methodology | Next Steps | Useful Links | Why Local Matters | Q&A | Share
What does it mean to shop local?
Since the company’s inception in 2015, Made in KC has built a reputation on unique, quality goods, on civic pride, and on cultivating creativity and community. We left the virtues of shopping locally as assumed, unspoken truths. It was an intentional decision, made thoughtfully, and with the desire to build a brand on inherent quality, not derivative benefits.
Now, having collected data over the past four years, having researched the impacts that local purchases can have on a local community, and having established a reputation of value built first upon inherent value of the products, Made in KC is proud to give you even more reasons to shop with us!
For starters, on the whole, non-locally owned chains and big box stores actually pull money from the local 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, $58 is recirculated into the local economy compared to just $31 at a non-locally owned company. And what about Made in KC? Made in KC recirculates over $93 back into the local economy for every $100 spent at our stores. 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).
While most people understand in general terms how purchasing a coffee from a local cafe differs from purchasing one from a national coffee chain, we think it’s worthwhile to break it down. When you order your latte from our downtown cafe, you're enjoying locally-roasted beans, local milk, and local syrups. It’s served by a local barista, we pay rent to a local landlord, and we buy all locally-baked pastries. You'll note that our entire bar features only locally-brewed beers, locally-made wine, and all our base spirits are locally distilled. As you walk through the space you'll note portraits by Kansas City photographer Cameron Gee. These portraits showcase some of Kansas City's most creative artists and entrepreneurs. As you browse our shelves, you'll find hundreds of local products from the makers and artists who call this city home. While this is primarily designed as a celebration of Kansas City, it also serves an economic engine with more than $0.93 of every dollar being recirculated directly into our local community.
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, Kansas City. We believe that Made in KC 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.
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 Kansas City and created a blended average of both retail stores and restaurants as Made in KC not only offers goods for sale but also sells food and drink through the cafes. 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 $93 dollars of every $100 spent at Made in KC is recirculated in the local economy? Funds can leave Made in KC in 5 ways: wages, profits, charitable donations, purchases of product, and expenses ranging from accounting services to legal services to cleaning supplies to insurance. To determine how much of our revenue is recirculated in Kansas City, we analyzed these categories for the last three years. We then categorized everything as “local” or “national.” For example, rent paid to the Country Club Plaza does not count as “local” as the Country Club Plaza is owned by Macerich and Taubman, neither of which are based in Kansas City. However, when we pay interest to our bank, Lead Bank, that classifies as local. Cleaning supplies ordered online don’t count. Leather goods for resale in the shops do.
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.
We’re excited by our initial findings but want to help lead the charge to learn more about these numbers and these impacts. Made in KC is pursuing participation in the Indie Impact Study Series through Civic Economics. It requires both an application and payment to participate as well as collecting data from businesses throughout the city. Stay tuned as we begin this process. Secondly, Made in KC hopes to partner with the Kauffman Foundation to pursue new methods of research to compliment the existing body of research.
Civic Economics: http://www.civiceconomics.com/featured-projects.html
Institute for Local Self-Reliance: https://ilsr.org/key-studies-why-local-matters/#3
American Independent Business Alliance: https://www.amiba.net/resources/multiplier-effect/
Monadnock, New Hampshire 2014: https://monadnockbuylocal.files.wordpress.com/2014/11/monadnock-final-indie-impact-study1.pdf
Hudson Valley, New York 2014: http://www.rethinklocal.org/wp-content/uploads/2014/03/Final-Report.pdf
Albuquerque, New Mexico 2013: http://nebula.wsimg.com/b27901326cb9e65b017f31717b6a07a4?AccessKeyId=8E410A17553441C49302&disposition=0&alloworigin=1
New Orleans, Louisiana 2009: http://www.independentwestand.org/wp-content/uploads/ThinkingOutsidetheBox_1.pdf
San Francisco, California 2007: https://ilsr.org/wp-content/uploads/2011/12/SFRDS-May07-2.pdf
Andersonville Study: Chicago, Illinois 2004: http://nebula.wsimg.com/0d5203ffcac30fe852f544a21a475256?AccessKeyId=8E410A17553441C49302&disposition=0&alloworigin=1
Why Local Matters:
There are a number of other considerations as to why shopping locally matters. Here are some conclusions drawn based upon a number of different studies.
All info below is directly from the Institute for Local Self-Reliance:
- Start-Ups These studies find that as the economy has become dominated by fewer and larger companies, there’s been a sharp decline in the formation of new businesses.
- Inequality These studies find that the increasing size of corporations is driving inequality, while local and dispersed business ownership strengthens the middle class.
- Economic Returns These studies find that local businesses recirculate a greater share of every dollar in the local economy, as they create locally owned supply chains and invest in their employees.
- Jobs These studies show that locally owned businesses employ more people per unit of sales, and retain more employees during economic downturns, while big-box retailers decrease the number of retail jobs in a region.
- Wages and Benefits These studies show that locally owned businesses are linked to higher income growth and lower levels of poverty, while big-box retailers, particularly Walmart, depress wages and benefits for retail employees. Studies in this section also quantify the costs of these big companies’ low wages to state healthcare programs and other forms of public assistance.
- Social and Civic Well-Being These studies find that a community’s level of social capital, civic engagement, and well-being is positively related to the share of its economy held by local businesses, while the presence of mega-retailers like Walmart undermines social capital and civic participation.
- Public Subsidies These studies document the massive public subsidies that overwhelmingly favor big businesses and have financed their expansion, and how this subsidized development has failed to produce real economic benefits for communities.
- Taxes Building on the studies included in the previous category, “Public Subsidies,” these studies examine the differing impacts of locally owned businesses and big-box retailers on public finances. They find that large retailers systemically tilt the playing field in their favor by skirting their tax obligations, as well as that locally owned enterprises generate more tax revenue for cities, with less cost, than sprawling big-box shopping centers.
- Existing Businesses These studies demonstrate how big-box retailers have significant negative effects on the number and vitality of nearby local businesses, in that they both lead to a loss of existing businesses, and contrary to the claims big-box retailers themselves often make, do not serve as a catalyst for new growth.
- Consumers & Prices These studies find that chains are not always a bargain
What are the qualifications for having a product carried in your stores?
Made in KC receives dozens of product submissions each week! Simply put, our city is full of hustlers, entrepreneurs, artists, and makers. We wish we could work with more brands than we do currently and we’re constantly trying to grow our brand relationships. Product submissions should be made here. Submissions are reviewed weekly by an experienced team who knows our customers well. We look for unique, quality products that complement our existing product offerings. We aim to align ourselves with brands who have well developed product lines, good branding and packaging, and an existing following. Our goal is to work with each brand for years to come and that is often one of the questions asked when evaluating a new product submission - “is this a company we see ourselves doing business with in a year?”
Now if you’re wondering how “local” your product needs to be, there is no hard-and-fast rule. Our goal in assessing whether a company or product is local weighs multiple factors: Manufacturing Process, Raw Goods, Labor, Civic Pride, and Company Ownership. Made in KC’s mission is to Cultivate Creativity within our city. We do that through supporting artists, makers, small business owners, and entrepreneurs. But we also Cultivate Creativity through encouraging civic pride, through showcasing the culture of our city both online and in our shops, and by promoting multiple forms of creativity through the food we eat, through what we wear on our shirts, through what we put in our homes. Keep reading below for more info on our process for vetting whether a product or company is “local” enough.
Are all of your products made in Kansas City?
Some products carried at Made in KC are made (almost) completely locally. A good example would be a cutting board. If milled at a local lumber yard, and taken from a local tree, the entirety of the cutting board may be local except perhaps for the oil used to seal it. Or take a ceramic vase. The clay might be made locally and perhaps some of the glazes are made locally as well, but often some of the component materials can’t be sourced locally. These are some good examples of handmade products with relatively straight-forward manufacturing processes. On the other end of the spectrum we have things like Kansas City themed playing cards, or books on Kansas City history. Often times these items are not actually manufactured at all or in part in Kansas City. Even still, we are happy to carry them in our shops as we believe they fulfill our company’s mission of cultivating creativity in Kansas City. Furthermore, these books are often written by locals and the products like playing cards are designed by locals who own local companies. Other examples of non-local items we sell are auxiliary pieces that are meant to complement our product offering. Examples include serving coke drinks at our cafe (in addition to local sodas) or pencils and other writing utensils that accompany stationary.
Why do some products in your stores have tags that say they were made in different countries? Does that mean it isn’t local?
When Made in KC purchases a finished good from a local company for resale, be it a shirt, a beer glass, or a bag of coffee, Made in KC is recirculating money into the local economy. Whether the coffee is shipped from Ethiopia to be roasted in Kansas City, or the shirt is made in China, to be printed on in Kansas City, we consider both of these purchases to be local, and thus supporting local businesses. We encourage all of our brands to choose local manufacturing options when they are present and financially viable and we regularly make recommendations to increase the levels of production and manufacturing that can be carried out locally. When no local option exists or when no economically viable local option exists, many brands source products from outside Kansas City. Thus, you will note that none of the shirts in our stores at this time are made of local fabric, nor are they sewn locally. We consider these products local however based upon a combination of local ownership, civic pride, local employment, local designers, and local printing. The same goes for glassware: while Kansas City doesn’t have any local glassware companies, we are lucky to have a great glassware printing facility in Lawrence, KS. Thus, much of the glassware you see in our shops is printed locally, designed locally, and comes from local companies that employ people here.
What about companies like Boulevard that are now owned by an international conglomerate? Do you still consider Boulevard to be local?
Personally, yes, we still consider Boulevard to be a local company. There are five major ways in which money leaves a company: Cost of Goods, Wages, Expenses, Charitable Contributions, and Profits. It’s our understanding that the vast majority of wages and expenses related to making Boulevard Beer are still local expenses. While the profits are no longer primarily local, we believe that Boulevard still contributes positively to the Kansas City community and economy. In a binary world, companies either add economic value to Kansas City or take economic value from Kansas City. It’s our belief that Boulevard contributes more to Kansas City than it takes away from Kansas City with each beer it sells.
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