I would agree with that. Another thing to think about but is how much of the "spare cash" stays locally? Say the product in question costs $100.00 ex GST from the manufacturer including freight etc. The local business puts on a 30% mark up and sells for $130.00 + GST . That puts $30.00 into the local economy. The online retailer works on a 10% margin and sells for $110.00. If the tight arse buyer then spends the saved $20.00 locally to someone else with a 30% mark up it works out at just $4.62 being put into into the local economy. ($15.38 + 30% ($4.62) = $20.00) This is purely based of a retail business scenario.
Consumption is the end goal of all production. If the “tight-arse buyer” buys both the online product for $110 and the local product for $20 he has satisfied 2 demands instead of just the one if he just used all his cash locally ie his wealth is further enhanced and his resources have been utilised more effectively. Choosing to buy locally at inflated prices because the consumer thinks they’re doing the “right thing” is false economy.
