Before the current recession it was fairly easy to go into business and stay profitable in business (and actually stay in business) due to the amount of money flowing within our economy. Since 2006/2007 that situation has changed dramatically. In my business, (ceramic tile and stone business) our market has dropped 39% overall. In markets like Georgia it is bad, but unfortunately, it is even worse in some other markets. I just saw a report this past week that said in Georgia the ceramic tile and stone business lost 33.6% of our contractor businesses and another 31% of our dealer/distributor businesses.
Think for a moment about the food industry, how many restaurants have come and gone in the past few years? Many of those had excellent food taste and great service, yet they are gone. That is a business that has a very low cost of entry and raw materials are very inexpensive yet making a profit is almost impossible in these times between labor costs, energy costs, and the loss of disposable income for the potential customers. In most home goods the technology improvements have absolutely killed all the profit margins for businesses. Folks find something they like, want, or need and then shop the Internet to get to the absolute bottom price, usually doesn't include shipping costs, and the local business that started the process either has to make no money on selling their inventory or they lose the sale - either way they lose.
So what is the answer? Folks a lot smarter than I am will have to come back with thoughts on that but I can tell you that I'm thankful that (A) I'm not in the retail business today, (B) I have a good job and available income to spend on my families wants/needs, and (C) most days I seem more likely to spend just slightly more to purchase something locally and maybe pay very slightly more, but seem to feel in my mind that I receive MUCH more value for my money then shipping it off via the Internet. I find myself using the local hardware store more today than ever before because when I consider the very small price difference I find the value of the education I receive from the folks working at the hardware store to teach me about the product I'm considering is worth far more than the price I'm paying. Same with my insurance and my bank - local agent/branch seems to be worth it to me. Am I alone in this?
Please do some comparison shopping this week and let me know your thoughts on this issue.