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Why Black-Owned Products Cost so Much (Sometimes)

Updated: Apr 16, 2023

What happens when you want to shop from Black-owned businesses, but the price seems high? I often see a disconnect between consumers and Black-owned businesses. Shoppers desire to support these companies, but often the products are more expensive than the corporation-produced products. The consumer should understand why these products are sometimes priced higher.


(L to R) HSN model, LaToya of Kazmaleje, Kim of Lamik Beauty, Jamila of Naturally Drenched, Kaytona of Unsun Cosmetics, Marissa Kearney of Retail While Black/Target While Black.

Consumers


There are many reasons Black-owned businesses price their products the way they do, which we’ll cover later.


Prices aside, we support Black-owned businesses because we want them to have the ability to scale their business and accumulate a lucrative cash flow. The end goal for so many Black-owned businesses is to create generational wealth and to do that, they need multiple streams of income.


Black people create more businesses than any other minority group in the United States but go out of business at a high rate after 3.5 years. Imagine what it would be like if all those businesses could have the support and money to stay open; It would have an enormous impact on the economy. So trust that businesses are doing their best, and we should ask how we can support them right now where they are.


What does supporting Black-owned businesses look like? First, supporting them in all the spaces they create: shop their online storefront and brands at large retailers. Understand that Black-owned businesses are small and often can’t be in every Target, every Walmart, etc. They don’t have the money to create and support a scale that large (at first!).


If a brand is new in a retailer but not in your area, I encourage you to buy those products online from the retailer’s dot com. Retailers use information from website sales to know where consumers are ordering from, and brands use their online sales as leverage to speak to the retailer about scaling and expanding. You can even request your favorite brands at customer service in some cases if you want them in-store! For example, I asked for Black Girl Magic Wine at my ABC Liquor, and I got it!! In addition, I’ve found Black-owned businesses on shelves at HomeGoods, Dollar Tree, Family Dollar, Macy's, and Nordstrom. They are everywhere. You just have to know where to look!


This is a big one: Please note that you aren’t going to like every black-owned business, and that’s alright. You also don’t need to feel that you must change every item you buy to a Black-owned product overnight. Change one thing at a time and have patience. It doesn't have to be an immediate, dramatic shift.


Why buy Black brands in retail? When retailers place orders with small Black-owned businesses, they place orders for tens of thousands of dollars–quick cash and another income stream. Of course, buying from their site is awesome, too, but you can do both! And the brand appreciates both!


Black-owned businesses


Back to pricing—many small businesses are incredibly thoughtful about the materials they are sourcing for their products—they want to use high-quality products. Therefore, they are buying them at a smaller volume than major companies. You may have seen my Instagram stories that compared a mass-produced, not minority-owned edge brush that was significantly cheaper than the Black-owned company that sells a higher-quality and higher-priced edge brush.


If consumers had access to the stories behind these products —the resources, people, money, and hard work it takes to bring products from concept to store shelves, they could better understand the product’s value.


Another example is the hesitation many people have when Black Brands sell. WHY DID THEY CHANGE THE FORMULA? Large corporations change formulas because it is cheaper for them to use coconut oil formula #5 instead of coconut formula # 10, which is $0.50 more (This is a loose example, I have no idea what numbers things have, but yes, there are different formula compilations of many things and it makes a difference!)


Retailers


In 2022, many stores pushed Black History Month displays; in 2023, there were noticeably fewer displays in the same major retailers. Why did this happen?


Big companies put up a facade of placing importance on Black-owned businesses, but they didn’t play the long game. Instead, they masqueraded as inclusive when the world was paying attention, and when they were no longer in the hot seat, they switched back to the pre-pandemic, pre-BLM status quo. One article I found calls this "Diversity Washing."


It feels short-sighted that these large retailers don’t see the potential financial impact of truly backing Black-owned businesses long-term.


So, what does it look like for retailers to do the work to keep black retailers on their shelves? First, they must create realistic markers for small, Black-owned businesses (they can’t compare small businesses to Fenty). Next, they must tell the story of Black-owned businesses on their shelves. I mentioned before that businesses need to do this, but they need the retailers carrying their products to amplify their stories. Target does this, but as I speak with the brands about what they need, I hope they have room to improve.


For example, many brands have shared with me that they wished retailers provided marketing dollars (and some, like Amazon, do). This is incredibly important to many brands because getting to the shelves is the beginning of the hard work to be there successfully. Small businesses don’t usually have the cash to spend on advertising and rely on stores to help amplify their message and share why their products are different.


Just as much as Black-owned businesses need retailers, the retailers need small Black-owned businesses to succeed. Retailers have to match the wants of the consumers they serve, and the new wave of consumers is Gen-Z, demanding more inclusivity on retail shelves.


Learn more:


Black-owned businesses playing the retail game and being successful on shelves is something we’re not going to be left out of if it’s up to me!


Need a consultant? Or want me to speak at your event? Please contact me at hello@retailwhileblack.shop


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