I work at a small business, in a small town, and so I completely believe in supporting small businesses. But, I don't make a ton of money, so I can't do it 100% of the time. In my town there are small businesses I believe in, and value, and there are others that I know aren't worth the 50% markup. Since we only have a farmers market for a few months, and the produce is insanely good, I treat myself for a few months and support the local farmer, even though his organic produce is at least twice that of our local Safeway. It's way more than twice as good tasting! I wouldn't be able to buy his produce year round, but for 3 months, it is a delicious treat, and I love buying food that is grown near me. The rest of the year I stock up at Costco when I go to a big city, and eat more frugally.
We have a local outdoor store that is definitely much more expensive than REI, or Sierra trading post, etc...so I don't shop there often, but I recently made a big, full price purchase there because the owner of the store spent no less than 5 hours researching, discussing with me, and figuring out the perfect product for me. I was hesitant to spend the money there at first, knowing I could get a good deal online, but it was totally worth it, and he steered me in a direction that I wouldn't have thought of! Totally worth the 30% more I ended up spending
Anyway, that's two examples that I have found valuable in my own purchasing. Obviously most of the time I am always looking for a good price, and I think most people shop that way. But every once in a while I think it is worth it to seek out the small businesses that specialize in what they do, and have knowledge or product that is worth the extra $$ spent.