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THE ECOLOGY OF COMMERCE page 144
" Sustainable businesses :
Replace nationally and internationally produced items with products
created locally and regionally.
Take responsibility for the effects they have on the natural
world.
Do not require exotic sources of capital in order to develop and
grow.
Engage in production processes that are human, worthy, dignified and
intrinsically satisfying.
Create objects of durability and long-term utility whose ultimate use
or disposition will not be harmful to future generations.
Change consumers to customers through education.
Replace nationally and internationally produced items with
products created locally and regionally. The high infrastructural
costs inherent in highly centralized manufacturing and distribution
are wasteful and unnecessary. Randy Hopper, a marketing professional
from British Columbia, calculated the difference to a local economy
of 7,500 people between buying a nationally known, name-brand, all
purpose cleaner in a plastic bottle with trigger-sprayer attachment
and buying a concentrated cleaner poured into a refillable
trigger-spray bottle. The numbers are a little tedious, but the final
point is striking: local is economical.
Before there is a product, there are components, and they are
expensive. Bottles cost 30¢, triggers 40¢, the package
altogether about 93¢. The product itself costs 8¢, and the
additional overhead of advertising, brokers, truckers, wholesalers,
salesmen, taxes, trade-shows, hospitality suites, giveaways,
liability insurance, store "listing fees", research, market testing,
waste, lawyers, and accountants brings the product to a landed cost
of $2.23 in the store, and selling retail for $3.00.
Of the 77¢ the store makes, 35¢ goes to staffing, 13¢
for employment taxes, 12¢ for overhead, 2¢ for insurance,
3¢ to marketing, 7¢ is profit, and 5¢ is paid out in
income taxes. Therefore, of the $3.00 paid by the customer, only
57¢ stays in the community where it is purchased. The remaining
$2.43 (including sales tax) leaves town. If one year's supply of
cleaner for this community is 10,000 bottles, the total purchase
price of $30,000 is allotted this way: $9,300 for packaging, $4,200
in various taxes, $6,900 for labor, $800 in actual raw material,
$3,400 in overhead and marketing and the balance of $5,400 to
insurance companies, truckers, and sundry taxes. Of that, $5,700
stays in the community.
If the store were to buy a drum of concentrated cleaner of equal
effectiveness, sold in bulk to be diluted at home with water, it
would cost the local community $10,876 for one year's supply--a
savings of $19,124. The costs break down this way: $880 for the soap,
$105 for transportation, $74 for packaging assuming people bring
their own bottles back to the store, $1,390 for labor,$416 for
overhead, marketing, and insurance, and $4,187 in various taxes.
Besides saving energy, fuel, transportation and the 833 cartons and
10,000 bottles that would othewise be wasted, the community also
keeps $4,651 of the selling price for itself. In the conventional
manner of sale, $5,700 stays in the community. when sold in bulk
form, the community keeps $4,651 and saves $19,124 for a combined
total of $23, 775.
By localizing production and distribution, communities export less
capital while depleting fewer from resources. In the above examples,
there was no change in the level of consumption of cleaner, but fewer
resources were used while real income went up significantly in the
community. Small, economically depressed towns are usually net
exporters of capital. These towns have very little to sell (or by
definition they wouldn't be so economically depressed), and in turn
what income they do generate is sent right back out of town for
"imported" energy, foods, and goods. According to the Rocky Mountain
Institute, an average town of 5,000 people spends over 20 percent of
its gross income on energy in various forms--over $20 million a year,
Ninety percent of it is capital exported out of town to other
suppliers. A town of average size (20,000 people) that cuts its
energy use by 25 percent accomplishes two things. First, it saves
approximately $5 million a year, money that can be used for other
purposes. Second, creating those savings requires an investment in
energy conservation, both techniques and education. If the town
spends $1 million a year locally in conservation measures, it creates
jobs and retains more income to be spent in the same town; ideally
some portion of it would be spent on other capital-retaining
resource-conserving businesses.
Every region faces the same challenges as a business. Money coming in
must equal or exceed the money going out in order for the town to
prosper. By closely examining the ways in which money leaves a town,
businesspeople can find tremendous opportunities opened up for small,
locally owned companies. The process requires thoughtful approaches,
meetings, and community awareness."
end Hawken quote
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