By Michael Howell
After hearing from a few Hamilton downtown business owners who had taken the time and gone to the expense to look into one small part of the county’s purchasing practices, the Ravalli County Commissioners appear ready to consider a change in policy that could benefit local businesses and the community and in many instances flat out save the county time and money.
Shawn Wathen, owner of Chapter One Bookstore, told the commissioners that he had recently attended a seminar presentation by the Institute of Local Self Reliance and Civic Economics focusing on the effect of Amazon.com on state economies around the nation. He said they had numbers state by state concerning the impact of Amazon.com and what struck him was the numbers for Montana.
The numbers for Montana in 2015, according to Wathen, show that the company took in $155.6 million in retail sales in the state. That translates, he said, into 108 retail storefronts; that is, .4 million square feet of retail space; a loss of $2 million in taxes; and a net loss of 1,000 jobs.
Wathen said it was really about the impacts on the whole community in the end and it made him wonder about Ravalli County. One thing about Amazon’s latest intrusion on the market place is that it has been, in many essential respects, “invisible.” That’s why it cost Wathen and neighboring business owner Al Mitchell $120 to find out what the county might be spending at Amazon.com. They discovered upon inquiry that Amazon.com was not a registered vendor with the county so no account could be immediately pulled up. Instead, it took research into each department’s credit card payments to ferret out what was paid to Amazon.com. The answer for 2016 was $15,485.83.
“Those dollars go out of the county,” said Wathen. “Amazon.com does not contribute to roads, or schools in Ravalli County.” He noted that studies have shown that for every $100 spent in a local business, $50 to $68 stays in the community and recirculates in the form of job creation, donations to charities, and creates a little disposable income that can go to other local businesses as people have a little more to spend eating out and going to the theater.
Wathen, who owns a bookstore, said that he found in the information provided that the county had bought only three books from Amazon.com. He said his business is not being as directly affected as many other businesses in the valley.
“Amazon.com is a behemoth,” said Wathen. He said it began by dominating the book market but now it is into “toys, office supplies, groceries, and an internet platform that is manipulated to the company’s benefit, destroying competition.”
“You have to pay for the community you want to live in,” he said. “We have a chance to take county dollars and invest them in our own community.”
Commissioner Jeff Burrows said that he would be interested in the details of the spending and how things compare in price.
Commissioner Doug Schallenberger said that he was in favor of supporting Montana businesses and local county businesses, but what had to be considered was cost, convenience and availability.
Dan Mitchell, Al Mitchell’s son and manager of the Paper Clip, produced a list of the expenditures by the county and said he had highlighted about 40 items purchased from Amazon that he could either beat the price for or match and he could deliver them faster than Amazon.
“They used to do price checks with us and we would match the price and often deliver it,” said Mitchell. “Then they quit. I don’t know why.”
Burrows said, “To me it’s a no brainer. If you can, you buy local.” But a finite budget sets some limits, he added. He said it was certainly not a policy but must go back to each department head. He said there must be a way to go for something local if the cost is not much more.
Mitchell pointed out that the county bought a ream of blue copy paper from Amazon for $13 that he sells for $6.50. There were other examples in which the county paid more to Amazon than they would have been charged at the Paper Clip.
Burrows said that he did not believe it was any kind of policy shift by the commissioners, but more the convenience of shopping and comparing on-line and then making a click. But, he said, an across the board local preference policy would not work.
Commissioner Ray Hawk said that it appears that buying from Amazon isn’t a money saver.
Wathen said it was about price on many items, but that the real issue was the investment in the community that is made when you buy local.
Burrows said that there should be some way to allow for more expensive purchases for local goods within some acceptable range.
Al Mitchell, who served on the Hamilton City Council at one time, said that the city had a policy of buying local if the price difference was no greater than 15%.
“But we are not asking to be a primary source, being a second or third would do,” said Mitchell.
Mitchell said that, although he works for the Chamber of Commerce, he was only speaking for himself personally. He said he and his wife started the Paper Clip in 1988 “with our eyes wide open. We knew that ‘Mom & Pop stores’ were disappearing across the country at an alarming rate. Shopping malls and ‘big box’ stores were driving little local shops out of the market place. But our desire was to raise our kids here and give back to the community that we both grew up in. It’s been a good ride, but it has been a struggle.”
Mitchell then recounted the history of his dealings with Ravalli County and its purchasing policy. He said it was in the early 1990’s that the county adopted a central purchasing program. He put in a bid but lost. He did some serious studying and next time put in the lowest bid, but still didn’t get it. Later he bought into a cooperative purchasing program and put together a flyer showing his prices. But the county gave the bid to a Missoula company that had the same flyer as him.
“I asked why and was told because they deliver for free,” said Mitchell. “Guess what? So do we!”
Mitchell said it’s been hard to stay in business in the Bitterroot and he has had to re-finance his house twice to keep the business open. He pays $1,800 in taxes on his home and $4,500 on his business.
“We support levies and bond elections,” said Mitchell. “Our business makes donations to many groups. We serve on committees and boards and councils. I’ve worked two or three jobs to make ends meet. But we are not any different than any other brick and mortar business in the valley. We are not getting rich here. We are not here to rip you off.”
He noted that a first year teacher in Hamilton starts at a salary of $33,000 per year. He said the Paper Clip employs four full time employees with an average of 18 years of experience (this includes the owners) and they earn $25,000 a year.
Mitchell said when he purchased health insurance for the employees it was $600 a month. He purchased a new delivery truck.
“In 2017, a watered down version of the original health insurance now costs $1,800 a month and I can afford a battery for that same truck,” he said.
“Sales have not increased since then, so where are the new customers going? To ‘big boxes, to the internet, to Amazon. Meanwhile, the costs of doing business keep increasing. The breaking point is fast approaching. Take a walk down Main Street and look at the lack of choices, the shuttered businesses and the underutilized buildings.
“I’m not asking you to feel sorry for us. In fact many of my critics and Wal-mart will probably rejoice when I’m finally out of business. We appreciate all the support, even if major employers didn’t, many of their employees did, and we do appreciate it.
“I close by asking you to buy local. I know it’s just more white noise to many folks. But realize this – we are not looking for a hand out, or a donation, we are simply asking that you do business with us as taxpaying, invested, caring neighbors. We love living here and we love giving back to the community. ‘Big boxes’ and Amazon don’t need you. Main Street businesses up and down the valley depend on you for their existence so don’t let us fade away. And thanks for letting me get 29 years of frustration off my chest.”
Commissioner Chris Hoffman said, “What’s been said here makes perfect sense to me.” He said as Sheriff he tried to buy local as much as he could. He urged Wathen and Mitchell to take their message to other elected officials and suggested a meeting with department heads to hear their message might be helpful. “I’m hoping there will be a way to sit down and write a policy as requested. To me it makes sense.”
Schallenberger called the presentation “an eye-opener.” He said it was something being skipped over and that the county could do better.
Hawk said that the policy would have to be changed since it has nothing in it about buying local or on the internet or anything like that.
“I’m in favor of it,” said Burrows.
No date was set for any future consideration, but some discussion was held about a potential address to department heads.