Monday, November 26, 2007

Paper or Plastic?

I was going to write a libertarian style rant about how San Francisco and Oakland have banned plastic bags and what that means for business. Then I started doing the research and although I'm suspicious of local governments meddling with businesses, especially San Francisco style, doing away with plastic bags makes a lot of sense.

By the way, the current method of meddling is to tax big businesses while leaving small ones alone. Activists now understand that a large percentage of business in this country is small business, so they figure people don't mind sticking it to the man, when the man is a corporation. San Francisco targeted businesses doing more than a million dollars a year. That's big, right? Not that big.

A million dollar a year retail business is only netting an owner $80,000, doing our sales tax estimate as a profit guide. In any case, the grocers were the target and they hit the mark. I live in Richmond and people were canvassing the streets yesterday with a measure to stick it to the refineries (again). This failed dramatically last year, but they don't give up. Hey, the evil multinational is big and has money and we don't, why not make them pay more? They need to remember that in today's economy, most people are shareholders beyond what they do for a living. Anyone with a 401K or IRA should worry about sticking it to the man. You're the man too.

Back to Bags
Bags are expensive. Yes, the grocery stores pay 2-3 cents per bag, but those are those flimsy, American Beauty blowing in the wind style bags. The die cut plastic bags we use are 15-32 cents each and are meant to last a while and be pretty. Paper is not much cheaper. The real cost for us is printing, which will often double or triple the price of a bag. There's usually a minimum order of a thousand dollars or more, which is why you currently see us with unprinted bags or the old bags until they're gone. Our large paper shopper bags with handles cost about 55 cents each including printing, so we'll be using those until they're gone, even though it has the old address on it. Know that when I ask a customer if they want a bag, I'm hoping they say no. Often they'll say they'll take one in a way that sounds like they're giving in to my pressure. That's definitely not the case.

Plastic bags are made from oil, consuming about 4% of the worlds supply. They can't be recycled so end up in landfills or clogging waterways. As one article pointed out, there are recyclable bags available, but why use the energy to recycle a plastic bag when you can just not use it in the first place? Recyclable plastic bags are 4-5 times as expensive as non-recycled plastic bags. Paper bags are not immune from criticism either. Our beautiful white paper bags are bleached, which adds costs to the recycling process. The cost of the cheapest non-bleached bag for me is 3.9 cents, compared to a 4.3 cent for a white bag. That's why you see so many of the nice white bags, it's an insignificant cost up front. Retailers don't pay directly for the recycling costs.

I'm convinced, without having the decision imposed on me by my local government, that we should drop plastic bags. We'll stop ordering them when they're gone. We just stocked up for the holidays, so that will be six months or so. In the future I'll have to see how detrimental those white bags are compared to natural brown bags. My original ideas on bags and merchandising came from old school examples, stores that I though were classy and cool. Now we obviously need to change with the times. Customers especially will have to be more aware of the costs of things like bags, and what makes a good or bad bag. Better yet, do what a few of my customers do and bring your own bag.


  1. Gary -

    You can always sell branded bags a la Trader Joes. I am sure you can find a source for cool bags, and sell them for $4-10 bucks or so. And folks will use them to bring their RPG books or their minis to your store, further enforcing your brand.

    The amount of petroleum that goes into 13 plastic grocery bags could drive an average American car a mile.

  2. ... I hope you mean ¢15-32 and not dollars...
    "...use are $15-32 each and..."

  3. Yes, cents, not dollars. I fixed it. Thanks.