I’ve had extensive conversations with Sankalp Gosain about why I think Cash Mobs and, by extension, shopping local, is important right now for our economies. Basically, it comes down to support for local economies and local businesses as engines of wealth-creation in our communities.
I’ll start with three basic, and I think non-controversial, propositions:
- The wealth of a community is the sum of the wealth of the individuals within that community. A community with wealthy individuals will itself be wealthy; a community with poor individuals will be poor;
- Wealth can be measured in a variety of ways (including family strength, health, etc.), but the most measureable and comparable way is in terms of dollars; and
- When we spend money within our communities, more of that money stays in our communities than when we spend it outside of our communities, or with people or businesses that are based outside of our communities. Indeed, every $100 spent in the local economy has an additional impact of $58.
When we buy local, from local businesspeople, wealth is both created and retained in the community. At a time when people across the country are concerned with international business, Wall Street and “too big to fail” banks, it’s natural that we’d want to support ourselves and our local businesses first before giving our money to businesses that aren’t based in our communities.
Here are two situations that can occur in a normal consumer transaction:
In the first situation, a buyer goes to Big Store to buy a trinket. Big Store bought the trinket for $1 and is selling it for $10. The buyer pays $10 and takes the trinket away. Big Store uses the $9 it made at the transaction first to pay for running the store and employing people, then to buy a replacement trinket for the sold trinket, and finally takes any other profit that it made and sends it to its corporate headquarters. The profit is then used to open other stores in other markets, pay C-Suite salaries, and as dividends to shareholders spread far and wide. The profit is thus distributed thinly around the world.
In the second situation, the buyer goes to a Local Store to buy a trinket. Local Store bought the trinket for $1 and is selling it for $10. The buyer pays $10 and takes the trinket away. Local Store uses the $9 it made at the transaction to pay for running the store and employing people, then to buy a replacement trinket for the sold trinket, and then the owner retains the profit. The profit is thus concentrated and controlled by someone in the community.
At this point, Big Store and Local Store have both “made” money in a very Napoleon Hill sense when they sell each item; until then, the item is simply the potential for value to be created. When the item sells, money is created for the seller. The Local Store’s owner then, can take this money and save it, invest it, buy things with it, give it away to charity – anything, really, that they want to do with it.
Regardless of what the owner does, however, he or she will end up with more than what they had before the transaction, either in material goods or mental satisfaction. They have created wealth for themselves, and the more wealth they create the wealthier they – and the community – will be. The community will ideally be able to support more and bigger businesses, more infrastructure, more employees and a larger, more vibrant economy. When this happens, the community is more self-sustaining, self-controlling and self-sufficient. It is in each community’s self-interest to make sure that their local businesses are thriving; Cleveland should be taking care of Cleveland, Portland should be taking care of Portland and Indianapolis should be taking care of Indianapolis. Also, the act of growing these businesses is where wealth is generated; it is better to start a business and reap the benefits of growing it than to invest late and just collect a few dividends.
When we shop local, it is as much about making an investment in our communities and economies as it is about getting things we normally would have bought elsewhere. Marty said that, for him, Cash Mobs was all about “LOVE.” For me, it’s about “COMMUNITY.” When we support the businesses in our community, they support us right back.
By Christine and Alex Haider-Winnett
On December 20th, about fifteen people gathered in Downtown Oakland for the first ever Oakland Cash Mob. Most of the people at the event were our friends or friends of friends, but we also got a few new folks who had seen our facebook and twitter outreach.
For our first Cash Mob, we chose Marion & Rose’s Workshop, which features arts and crafts from local artists. We chose Marion and Rose’s for two reasons: first of all, we thought it would be a great place for people to buy unique and inexpensive holiday presents from local artists. Second, Marion and Rose’s is part of Oakland’s “Popuphood” project, where local businesses are given spaces in empty storefronts rent-free for six-months in order to promote community revitalization and the local economy.
Everyone had a great time at Marion and Rose’s buying Christmas ornaments, greeting cards, and local art. The people at Marion and Rose’s were really wonderful and appreciative. They said that while we were there they raised $500 in a half hour! Perhaps most exciting, in the half hour we were there about 5 people that weren’t ‘officially’ part of Cash Mob wandered into the store. The folks at Marion and Rose’s suspected that many of those people came in because the store was so full that it just looked like the place to be!
Afterward, about six of us went to Pacific Coast Brewing Company, a great local brewpub down the street. It was fun getting a chance to have everyone get to know each other more informally, and start to brainstorm ideas for future cash mobs.
Our friend Lauren Way from San Diego Cash Mobs put us in contact with a journalist from the Wall Street Journal. Alex and mobber Michelle Murrain were featured in their recent article. We were also lucky to have Suzi Spangenberg take pictures for us to send to media, put on our facebook page and use to promote future events.
We’re currently planning another Cash Mob in early January that will support a historic business in downtown Oakland that is currently facing foreclosure. We are hoping to make Oakland Cash Mobs a monthly event, and are looking forward to holding events at different kinds of businesses and in different neighborhoods. Anyone interested can follow us on Facebook or on Twitter.
Here’s a quick story about what might happen if you buy local:
I was at a Bazaar Bizarre craft show two weeks ago and saw a wallet made of sail cloth from Forest City Portage. I wanted to buy a couple as presents, so I bought the one he had for sale and he said he’d send me another that week. Five days went by and I didn’t get it. I emailed him on Saturday to find out if he mailed it, and he emailed back immediately that he would be sending it Monday. Tuesday (yesterday), I got an envelope with the wallet, as well as an extra one that he just threw in as a sorry/thank you present. What big-box store would just double an order, even on a small item, because it was a few days late? I like buying as close to the source as you can, and this just made me a more passionate advocate. Knowing the people who make the things you use is not only spiritually rewarding – sometimes you have a great customer experience and vow to be a lifelong customer. Oh, and the wallets are awesome – they are light, thin and feel really durable, with an ID window and a utilitarian design that I love. I’m extremely impressed with it.
Do YOU have any good stories about buying local? Send them to us and we’ll post them here!
Dear Sandy -
We understand your frustration with the big, international chain stores not wanting to help the community. We think we have a pretty simple solution: please consider coming to the Cash Mob this Thursday at 6:30 in Ohio City, where the store owner will be more than happy to help your students and you’ll also be able to teach them about the benefits of buying local and supporting their community businesses. If you can make it before or after, too, we would love to include you in our celebrations.
PS YOU ARE AWESOME.
by Angela Barzizza-Young (Kent, Ohio)
Why mob? Why not? The planning is negligible, the cost is only $20, it is fun, and you support local business!!! I loved the post about showing some “LOVE.” It’s as simple as that! :)
by Sankalp Gosain
Cash mobs for cash jobs.
We’re reasonable people. We know there’s little we can do to make anybody regularly patronize a ‘shmobs destination -that’s up to whether the business itself can win over the mobbing faithful. And for all our wishes to the contrary, the one-day spike in business isn’t going to actually reverse the trajectory of a failing local business.
But what we can do is make it very, very appealing to walk in some shop’s door exactly once. Maybe the mob likes it and goes again, maybe the mob whips out their smartphones and leaves a hundred scathing reviews on Yelp before they’ve even left the building –that’s totally up to the whim of the mobbers and we wouldn’t have it any other way. However, in the same way that a store will hand out coupons or give away samples so customers will give them a shot, Cash Mobs can motivate the locally-minded into a store they might not have otherwise checked out (see “appeal of partying”). And like any other loss-leader, this just might mean a whole bunch of newly-minted repeat customers –something that actually can move a local biz into the black.
But wait, there’s more.
Now when other might-be entrepreneurs in town catch wind of their mobbing neighbors’ open-minded, ‘try anything once’ approach to fledgling enterprises you can sure bet they’ll be more inclined to taking the plunge and set up shop.
And that’s when the magic happens. Cue the chairman of the Federal Reserve…
Ben Bernanke: “Small businesses are central to creating jobs in our economy; they employ roughly one half of all Americans and account for about 60 percent of gross job creation, newer small businesses, those less than two years old, are especially important: Over the past 20 years, these start-up enterprises accounted for roughly one quarter of gross job creation even though they employed less than 10 percent of the workforce.”
Tim Kane, senior fellow at the Kauffman Foundation: “Start-ups are responsible for all net job growth in the U.S. economy. During years of recession, net job losses grow at existing firms—those a year and older—while job creation at start-ups stays stable. Start-ups create an average of 3 million new jobs annually, all other ages of firms, including companies in their first full years of existence up to firms established two centuries ago, are net job destroyers, losing 1 million jobs net combined per year.”
When you support the local guys they stick around. And as the Cash Mob swells and word of this “give ‘em a shot” attitude spreads, new businesses and jobs pop up.
So Mob in your town. Help businesses survive and thrive in your town. And watch as the elusive job fairy is lured – you guessed it – to your town.
If you buy it, they will come.
by Marilyn Koop (Norman, Oklahoma)
It all started with listening to NPR. I was listening to the program Marketplace Money (which I don’t normally listen to) when the story of the Cleveland Cash Mob aired. How brilliant to bring awareness and focus to locally-owned businesses. I was struck by the utter simplicity and impact of what a cash mob could do – symbolically and tangibly -for a community. All I could think in that moment was “I am doing this Norman. I’m just gonna do it.” So, I did it. When I got home I created a Norman Cash Mob Twitter account; a Norman Cash Mob Facebook group; and, a blog Norman Cash Mob. I was doing it. And I didn’t have to reinvent the wheel to do it either – Cleveland Cash Mob already had it down. Andrew Samtoy was extremely helpful and supportive when I made contact with him, asking for advice and clarification. Chalk up another mark in the Benefits category of social media tools. By utilizing as many forms of social media tools as possible, and by using old-school text messaging, Norman Cash Mob was created and grew in a very short period of time.
I am fortunate enough to live in a community that is FULL of locally-owned shops, one element that makes Norman, Oklahoma a very special town. But my town is growing larger everyday. When I first moved to Norman to attend the University of Oklahoma, Norman had a population of 75,000 and now, 25 years later Norman is a small city of 111,000 -without the student population of OU. With this growth and the ever-proliferate amount of “big box” national chain stores, it’s very important that our community not only continue to support locally-owned small businesses but passionately support them. Participating in a cash mob is a demonstrable act of this passion.
Above all the practical reasons to organize a cash mob for my community, it’s the expression of love toward our locally-owned shops that people – including myself -connect with the “why do it” of Norman Cash Mob. To know that just by gathering together to show this love to a chosen local shop, awareness is raised; money infuses a business; people enjoy the act and the fun; and, it becomes something greater than just the act itself. That’s local-empowerment that ripples and rolls like the wind through the grass on the plains.
The inaugural Norman Cash Mob was held on December 2, 2011 at 6 p.m. The local shop mobbed was a great, unique place The Wild Hare, owned by Reese Truesdell. We had a great mix of people show up, including lots of families. From 6 p.m – 8 p.m., 25 cash mobbers dropped $955 in The Wild Hare. Quite remarkable when you consider the size of Norman. Of course, we all viewed it as a great success and people were ready for the next Norman Cash Mob (which will be held December 16, 2011). It is the goal of Norman Cash Mob to do a cash mob at least once a month. I believe that the combination of fun, adventure, socializing, and demonstrating love for their locally-owned shops, Norman Cash Mob will continue to grow.
So why do people get together and do a cash mob? Maybe we feel more connected to our local shop owners because they’re our friends; our kids play together; we went to school together; we serve on non-profits together; we’re neighbors. Truly, this connection we feel contributes to our desire for our locally-owned businesses to succeed. The more we support our local shops, the stronger our community is as a whole. It’s a pretty simple dynamic but one that still requires tending and care. The more people are talking about Norman Cash Mob, the more people are becoming informed and passionate about supporting their hometown shops which was the goal all along.