Tuesday, October 17, 2017

Profits in Podunk

Making money in rural America

Dollar General logo.svg

I've already recommended the Opera browser as one of the best programs for your computer.

Well, given that there's such a focus on creating apps for smartphones/tablets, Opera makes an app called Opera Mini for phones—I'd argue that Opera Mini for phones is even better than Opera for desktops!

One handy feature of Opera Mini is that it sends notifications about current headlines to your phone, a couple times per day. This allows you to stay up-to-date on what's going on in the world...but you don't have to read the articles if you don't want to, since the notification only features the headline.

Anyway, on Wednesday, October 11, I got a notification about this article: https://www.bloomberg.com/news/features/2017-10-11/dollar-general-hits-a-gold-mine-in-rural-america

I thought it was interesting, so I read the article. I'm glad I did! It was very thought-provoking regarding the economic issues that face small, rural towns in the United States.
  • If you've never been to rural areas in the Midwest or the South (as I personally hadn't until 2013), you may not fully understand just what this article is talking about.

    But imagine that your town only has about 1000 people. Now imagine that you're a business owner who's trying to make a profit. Unless you're selling food, not all of those 1000 people are going to frequent your shop. So how is your store supposed to make money?...
  • Now imagine that you're a customer in one such town, and you have to travel 50 miles to the nearest town that's big enough to support more than a convenience store, a gas station, and a small grocery store.

    Obviously, it would be more convenient for you to buy what you need in town. But it would cost more, due to the economics of supply and demand. So we're stuck with a Catch-22 in which something costs more for people who have little in the way of job prospects because there are only a handful of potential employers in town.
  • Pretty dreary image, right?

    But around half of the U.S. population lives in towns of under 25,000, and there are—conservatively speaking—hundreds of such remote towns in the nation. This means that there are hundreds of thousands of Americans (if not millions of Americans!) who face the dual financial threat of dim job prospects combined with having to either pay through the nose for the things they need, or spend hours driving to a distant place in order to get them. 
This illustrates why ditching a car isn't realistic for everyone, no matter what Mr. Money Mustache thinks...

A couple further thoughts (on which I intend to expand at some later date):
  • When running a business in a very small town like those described in that article, how do you balance profit (so you can afford to live), community service (providing things that people need without ripping them off), and quality of life (carrying perishable goods that are good for customers' health, like fresh fruits and vegetables)?
    • This is an intriguing and difficult question! I never really thought about it...but if Walmart is having trouble turning a profit in such areas, how does Dollar General (or any other store) do it?
  • When it comes to low-price general stores, I've found that Dollar Tree is the best. Everything there truly is $1 or less!
    • I've been to Family Dollar, which is owned by Dollar Tree, according to the Bloomberg article above. Not impressed. Many of their products are ridiculously overpriced, and they aren't actually $1 (as the name implies)...the one time I went into Family Dollar to look around, I saw products that cost $8 or $10—products that I could have found elsewhere for less!
  • Imagine being born and educated in such a small town. That's where your family is, that's where your friends are, and it's the only home you've ever known!

    It's extremely risky to move away from such support structures to look for a job in a bigger town. So, it's either move away from everyone you know and love and hope you can find a career...or stay in Podunk and be condemned to a career that you fell into due to the happenstance of who you know and where you live—a career that you may or may not enjoy, and one that you may or may not have chosen for yourself.

    All because you happened to be born in a town that doesn't have a lot of people! It's little wonder, then, that so many people turn to drugs/alcohol, television, gambling, or other "escapes" from such drudgery. 
  • At the beginning of this post, I mentioned smartphones/mobile apps. I used to get my $35/mo. prepaid phone service from Virgin Mobile, but when I moved to an area that Virgin Mobile did not service, I knew I'd have to switch. And, considering that my old phone (an HTC One V that cost me $80) was getting painfully slow, it was a good excuse to upgrade.

    So, I went with the $100 Moto E on Republic Wireless. Not only is my new phone fantastic, the primarily wireless-based service works wherever there's wi-fi—and it's $15/mo. cheaper than my old plan to boot!

    I'm not currently a part of the Republic Wireless affiliate network (I'm considering applying), but regardless of whether or not I'm getting compensated, my recommendation of Republic Wireless stands!

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