Here is What Happens When You Shop Locally

By Angie Scheu for Simply Living

Discover how the “local multiplier effect” boosts jobs and keeps wealth in Central Ohio — and explore Simply Living’s Local Sustainable Business Directory.

Why Shopping Local Matters More Than You Think

What if a simple change in your shopping habits could help create 5,000 new jobs in Franklin County? According to economic research on the local multiplier effect, a modest shift — only 10% of consumer spending from national chains to local businesses — can dramatically strengthen our local economy, supporting the neighbors, family farms, small shops, service companies, and community institutions that make Central Ohio thrive.

That’s the power of localism — and it’s something Simply Living has championed for over three decades.

The Local Multiplier Effect

The “local multiplier effect” describes how money spent at independent, locally owned businesses circulates through the community — generating jobs, wages, and reinvestment at a far greater rate than money spent at national chains. It creates “wins” for all of us here in the communities that make up Central Ohio.

Here’s how the ripple effect works:

• 1st Ripple: Local businesses employee local people, pay local wages, and buy from local suppliers.
• 2nd Ripple: Those suppliers and employees spend their earnings at other local businesses.
• 3rd Ripple: The added income boosts community spending, creating a ripple effect that grows over time.

Studies consistently show the difference:

• A study by Civic Economics found that every $100 spent at a local independent business generates $45 in local spending, compared to only $14 when spent at a big-box chain.¹
• Research from the American Independent Business Alliance confirms that local retailers recirculate 2–3 times more money within the community than chains.²

The Franklin County Context

While no updated study exists specifically for Franklin County, economic models suggest similar patterns. In a 2014 Columbus Reddit analysis, residents estimated that a 10% shift in spending toward local businesses could create roughly 5,000 new jobs — based on the Civic Economics model showing that 25% of each dollar spent at a nonlocal business leaves the community.

Earlier local data showed that for every two jobs added by a new national retailer, three local jobs were lost as small businesses struggled to compete.

If Franklin County residents redirected just 10% of their shopping from chains to local options, more than $300 million could be retained within Franklin County — money that would otherwise flow to corporate headquarters and distant shareholders. That $300 million could fund small business growth, community programs, and local job creation.

Why Local Businesses Are Economic Powerhouses

Here are some stats about independent, locally owned businesses:

• Are major employers, creating two-thirds of all new private-sector jobs in the U.S.³
• Keep profits circulating locally through wages, services, and donations to community causes and sponsorships of school programs.
• Are more likely to buy products and services from other local businesses — from farmers to website designers to accountants to food suppliers.
• Strengthen civic engagement and community well-being by building relationships face-to-face.

When we spend locally, we’re not just supporting a business, we’re investing in our local economy and the future we want to live in.

The Hidden Cost of Credit Card Fees

Another way to keep more dollars local is to pay with cash or low-fee payment options whenever possible.

Every time you use a credit or debit card, 2–4% of your purchase typically goes to large financial institutions and payment processors — money that leaves the community instantly. For small, independent businesses with tight margins, these fees can add up to thousands of dollars a year.

Paying in cash, by check, or through local payment platforms helps local businesses keep more of their hard-earned revenue right here in Central Ohio — where it can support wages, local services, and community-oriented programs.

If you want to think of it as another layer of the local multiplier effect: your payment choices can either drain wealth away or help it grow roots in the local economy.

Simply Living’s Local Sustainable Business Directory

Simply Living proudly offers our Local Sustainable Business Directory — a community-powered resource with over 1,000 local business listings within a 60-mile radius of Columbus, Ohio.

You’ll find everything from eco-friendly retailers and locally owned restaurants to ethical financial institutions and green home services — all made searchable for you by keyword. This directory is curated by Simply Living staff and volunteers who believe that local choices create global impact. Donations are appreciated to help maintain and grow this invaluable community asset.

We Multiply Change

The local multiplier effect reminds us that every dollar spent is a vote for the kind of economy we want. When we choose to keep our hard-earned dollars circulating locally, we strengthen Central Ohio’s resilience, create meaningful jobs, and build the foundation for an equitable future.

Your choices matter. Let’s keep the ripple going!

Pictured above: Glass Rooster Cannery of Sunbury, Ohio; Java Central of Westerville, Ohio; Raven’s Retreat of Hocking Hills, Ohio.

Cited sources for this article:

1. U.S. Small Business Administration, Small Business GDP: Update 2002–2010, Office of Advocacy, 2012.
2. American Independent Business Alliance (AMIBA), The Multiplier Effect of Local Independent Businesses, 2019.
3. Civic Economics, Andersonville Study of Retail Economics, 2004.