6 Things You Need to Know to Shop Black Smarter

Updated: Feb 23

I’m starting the year with a hot take: You may shop, but you don’t understand retail. I’ve taken all of the comments, misconceptions, and questions I’ve heard over the years and I’m laying it all out so you can understand behind the scenes of the retail business and make informed decisions when shopping Black. I believe if we shop consciously at big box stores, there would be more room for small diverse-owned brands. With a lot of work, we could change what the stores we shop in look like.

1. Small businesses can exist inside of big retailers.

Someone tried to argue with me and say that once you’re in a store, you’re no longer a small business– Girl, Please! LOL –I know of multiple brands that have less than five employees yet they have items on shelves in large retailers.

To get technical, the U.S. Small Business Administration generally considers businesses with under 500 employees to be small businesses. In the “Clothing and Clothing Accessories Retailers” segment, any business whose receipts total $47 million or less is federally considered a small business.

Case in point, when Carol’s Daughter was sold to L’Oreal in 2013, the brand was raking in $40 million in annual revenue. That same year, L’Oreal reported over $25 billion in sales. BILLION with a B. Even with that much revenue, Carol’s Daughter was a small business compared to L’Oreal. Think about this next time you see your favorite brand on the shelf! The competition is STEEP.

2. Black-owned & Black-founded are not the same thing

in the retail world. My DMs are always in shambles when I post a Black-founded brand. My DMs are always in shambles because people refuse to read my captions, bio, or FAQ. Here are the differences.

BLACK-OWNED means that Black individuals own the company (at least 51%).

BLACK FOUNDED means that Black individuals founded the company but it is no longer under Black ownership. It’s possible that the founder may still be CEO, hold shares, and employ the original team under a larger company but that is not always the case.

A Black found brand is a sold brand. That’s why you may see labels that say “Black founded” on packaging from brands that you know aren’t Black-owned anymore.

BLACK REPRESENTATION: we love to see it, but these items are not Black-owned or founded. A good example of this is the Black Santa decor at Target. Target’s team created it and we love the representation, but please don’t be fooled into thinking you’re shopping Black and supporting Black entrepreneurs and makers when you buy these items. However, there very well could be a Black designer employed by Target who created this item, but they’re not getting any revenue from sales. Please check out this post about Black History Month collections!

3. Brands receive chargebacks for products that don’t sell.

A chargeback is when a retailer demands a company to make good on the profit loss from their items.

Here is how the transaction may operate when a retailer carries a company’s product: the retailer purchases products from the brand at a set price and expects to make a certain profit. If they don’t make that profit because a person returned the product or it was clearanced, the retailer makes less money. So, they go back to the brand and ask for some of their money back.

Ex. RetailWhileBlack LLC is paid to give NAMEBRAND store 10,000 shirts in exchange for $25,000. Only 8,000 shirts sell at the agreed price. 2000 are clearenced and sold at half price. NAME BRAND store asks RetailWhileBlack LLC to refund money for the profit loss the store received.

The best thing that you can do for a brand once its product is on clearance is to buy the product when you see it! Better to buy it at 50% than 70%. I know, I know. But remember this is about how to best support not bargain shopping. See if that brand has samples (if possible) before you buy and need to return. If you have to return something, cool, but be mindful. Chargebacks can be expensive and swallow a small business.

If their product isn’t moving off the shelves, the retailer probably won’t see the value in purchasing more.

4. Reviews make the world go ‘round.

A lot of positive reviews push brands to the top of search results and that means new eyes and more customers. Think about the way you shop online; if you’re browsing for a new hair moisturizer from a small business you’ve never purchased from and there are no reviews, you might pause because you want someone else to try it out first. So if there is a product from a Black-owned business that you love, seek it out online and let others know you love and trust it.

5. I often hear people say that Black people should have their own stores

where they can shop for Black-owned products and I agree, but we deserve to be in all the places. We deserve to be available for everyone to purchase, next to the Latinx-owned Asian-owned, and white-owned products.

6. My opinion: incubator brands (brands developed and marketed by a third party who has partial ownership) shouldn’t be on Black-owned lists. They should be listed as Black-founded. Usually, incubators take an equity stake in the brand (I usually see a 51/49 ownership split).

This take won’t go over well with a brand I love but it’s true: I’ve thought about this so hard and I will never call them Black-owned again because it’s misleading. Read more about incubators here: https://aofund.org/resource/business-incubators-pros-and-cons/.

6. Multiple streams of income apply to businesses too!

The goal is to be in multiple retailers (because the purchase orders are BIG) and have a good DTC (direct-to-consumer) website. There is no wrong way to buy Black. Buying Black in retail is a strategy and I don’t know about y’all, but I don’t like to lose!

Do you want to learn more about Black retail as a consumer or a business owner? Follow me: IG/Threads/TikTok.

Is there a topic you want to know more about? Need a consultant? Or want me to speak at your event? Please contact me at hello@retailwhileblack.shop

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