Last week, I wrote an article for theGrio entitled theGrio’s guide to buying black online. As I was reading the Facebook comments about the article, I noticed a great sense of frustration on behalf of consumers about black businesses. Many commenters said that they will never shop at a black-owned store until these firms make their prices lower, improve customer service, and start selling things that they like to buy. Although these criticisms are certainly valid for many black-owned businesses, African-Americans are stuck in a chicken or egg scenario. We refuse to spend our money with slightly-to-moderately inferior black businesses, because they are not on-par with the competition, but the only way for them to improve is through practice and financial support from their base to keep them in business in the long term.
I fall into this trap just as much as anyone else in our community. My first company, Great Black Speakers, has been in business for over five years now. One thing that helped me keep costs low in the beginning was Elance, a site that brings buyers and sellers of talent together from all across the world. It was perfect because it allowed me to use my process engineering talents to set up a low cost-high value system without ever having to leave my house. Is it black-owned? No. Yet, over time, I started to use the site less and less as I became more in tune with my own story and the need to support the black community more. Like many startups founded by first-time entrepreneurs, the Great Black Speaker service was just average in the beginning and had to use the cheapest resources available. But a major reason that I survived to become one of the premier organizations in my industry was through the support of my African-American base. I certainly can’t forget that now, when it’s my turn to choose vendors.
Now that I have a second company, Ujamaa Deals, I work actively to encourage African-Americans not to make the same mistake I made at the beginning of my small business life. While promoting the products of black-owned businesses to African-American consumers online, I have heard many different reasons explaining why blacks do not support their own community’s efforts. All have some ring of truth, but they do not tell the whole story. Below are the four most popular complaints and my responses to each one.
1. “Customer service is terrible with black-owned businesses.”
Black businesses have the reputation for having poor customer service. What is often left out is that many white-owned businesses are plagued with poor customer service as well. As I can attest, one of the most challenging things to do with any new business is to set up a culture and process of excellent customer service.
Not all black businesses have bad customer service. The poor reputation of black businesses leads to confirmation bias, which is our tendency to favor information that confirms our beliefs. We selectively recall the bad experiences that we have with black businesses while ignoring all of the good ones. Often, we completely ignore the good and bad experiences from businesses outside of the black community and just assume that they were all superior.
2. “The prices of black-owned businesses are higher than at other firms.”
Prices at many black-owned businesses are higher than large retail chains like Wal-Mart, as well as some other small businesses. What people do not consider is that black businesses neither have the size nor the solidarity that it takes to command low prices from suppliers. Large companies have the ability to buy in large quantities, which lowers the cost per item. There has never been a company started by black people of that size, therefore the prices that suppliers charge us is higher. We have a habit of comparing the attributes of Fortune 500 companies with those of small businesses, even though they are not always competing on an even playing field.