Amazon vs. Local Shop: Which Should Get Your Business?

It's a tough decision to make.

The other day, I walked into a local toy store with my daughter to inquire about hosting an event there. As I was discussing pricing with the manager, my daughter took it upon herself to browse the aisles. And not shockingly, she found an arts and crafts kit she really wanted.

Now it so happens that my daughter recently got a generous visit from the Tooth Fairy, so she has a little money to spend. And I was tempted to hand over my credit card to the store owner and buy her that $25 kit.

But before I did, I took a minute to see if Amazon had the same item in stock. And lo and behold, not only was it available for two-day shipping (which I get for free as a Prime member), but it was also available for $16, not $25.

At that point, I had a dilemma. See, this local toy store is a business that does great things for our community. Many years back, when Hurricane Sandy battered the area, I was involved with an event to raise money for victims whose homes were destroyed. I know for a fact that this business donated generously to that effort because I was the one who solicited its donation. Plus, I want cute stores like that in my town, and to make that happen, customers like me have to give them business.

On the other hand, paying $25 for an item I could get for $16 just didn't sit well. And so ultimately, we went home and I ordered my daughter the kit online.

In the course of your shopping, you, too, may be torn between your desire to save money and your desire to keep local businesses afloat. Here are some questions to ask yourself when deciding where to make your purchases.

1. Is the price difference substantial?

In my situation, the difference between my local store's price and Amazon's price wasn't small. But had we been looking at, say, a $2 or $3 price difference, I probably would have given my business to my local store. The way I see it, they need the sale more than Amazon, and for a minor difference, it's worth offering up that support.

2. Is the quality any different?

The arts and craft kit I could've bought at my local toy store was the exact same one Amazon had in stock. And so in that case, buying it on Amazon didn't mean skimping on quality. But in some cases, you'll get better value from a local store whose items aren't mass-produced. If you're making an investment in something like a musical instrument, pair of boots, or piece of furniture, you may want to go local.

3. Is the business doing well?

Sometimes, it's hard to know if a local business is thriving or struggling. But there are signs. For example, if the store in question is empty every time you walk in, it means that business may be desperate for revenue. In that case, you may want to err on the side of giving it some support, even if just occasionally.

It pays to shop local

Local businesses are instrumental in helping neighborhoods thrive. Local businesses tend to create jobs within the community, and they're also more likely to give back to the community than large corporations.

Now there may come a point where overpaying for the same product you'll find on Amazon just doesn't make financial sense for you. But if money isn't tight and you have some wiggle room in your budget, it could pay to throw local businesses a few extra sales here and there -- even if Amazon's price point is a bit more competitive.