How Amazon taught Grand Junction a valuable lesson
Small businesses and nonprofits have a lot in common: They operate on thin margins, develop strong local ties and support their communities’ economic and social wellbeing.
But what happens to those strong bonds when an online retailing giant comes in with a deal that benefits one side and threatens the other? That was the question at the heart of a recent mini-rebellion led by a feisty western Colorado bookseller, who heard her favorite community radio station, KAFM, promoting a new fundraising partnership with Amazon.
Margie Wilson, owner of Grand Valley Books and another bookstore in town, asked, “How does a community-supported organization expect to keep receiving local business support when they encourage their members to shop for books and other products on Amazon?”
At issue was the benign-sounding AmazonSmile program. AmazonSmile lets charities use Amazon's technology to raise funds from supporters via click-and-forget transactions. After a one-time signup, it automatically uses 0.5 percent of a qualified sale to benefit a nonprofit designated by the purchaser.
These are sales, says Amazon, that were going to the company anyway. The consumer feels good about supporting a chosen charity, and the organization raises more money without added fundraising overhead. For cash-strapped nonprofits with limited technical resources, this looks like a risk-free helping hand.
To Wilson and other main street business owners, it felt more like a slap in the face. A powerful competitor that participates little in the hometown's charitable or civic affairs was harvesting local goodwill, customer browser information and purchases that sent dollars out of the community.
Wilson decided to take a stand. She enlisted customers, friends of the station and other business owners to ask the KAFM Board to reconsider its participation.
The board did — and then voted to terminate its AmazonSmile partnership, saying: “The fundraising method that sparked the controversy arose out of new technology, but the KAFM Board determined the resolution needed to come from an old ‘technology’ — neighbors helping neighbors.”
The reversal with Amazon shouldn’t make a dent in the station's revenue. (The average consumer spends just under $1,000 annually with Amazon. That’s $5 per donor who signs on to the program.)
Indeed, I talked to another local nonprofit exec who says its AmazonSmile relationship is not considered a source of charitable dollars. Rather, it’s used more like a cash-back credit card for comparison shopping and making large purchases of items that are hard to find locally. Her search for a solid gallium supplier, for example, led her to a small Ohio company. She estimates this approach has saved thousands of taxpayer dollars on the science kits it produces for public schools.
Not all products sold on Amazon compete with local retailers, and some of the “Amazon” sellers are actually small businesses searching for customers beyond their communities.
So why should local nonprofits be concerned about healthy relations with businesses that do compete with Amazon? Online sales transactions support Amazon's business model but not the more participatory relationships most nonprofits want to cultivate. In other words, "I gave at Amazon" could become the new line, "I gave at the office."
Rob Bleiberg, executive director of the Mesa Land Trust, empathizes with fellow nonprofits seeking creative ways to expand fundraising, but also appreciates how good ideas don't always produce the desired results.
His group once enlisted two businesses to collect a voluntary 1 percent surcharge from their customers to support land preservation. While the experiment was well received, the land trust lacked the resources to scale up the program beyond the original cafe and bike shop. When ownerships changed, it was discontinued.
Bleiberg said small businesses give his organization "wonderful support," and he counted off the ways: Cash donations, owners serving on the board, memberships, event underwriting, publicity, ties to national suppliers, and providing matching funds to attract donations.
Last year, he said, 65 businesses wrote checks for over $30,000, covering about 7 percent of his organization's operating budget. And some owners gave as individuals, too. In addition, three local establishments sponsored events and drink promotions earlier this year that raised several thousand dollars for a bike trail project. All these events help build community among like-minded people, and they produced sales that stay in town to recirculate in the local economy.
Local business owners "use the bike trails and see expansion as a good amenity for the town, they're good citizens, and their support is good advertising to a compelling demographic," Bleiberg said.
On one of those points, at least, small businesses and Amazon agree.
Charlie Quimby is a contributor to Writers on the Range, a column service of High Country News. He is a writer and retired marketing agency owner who lives in Grand Junction. “Monument Road,” his novel set in the Grand Valley, was a Colorado Book Award finalist.