Shopping for black-owned brands

The Long History of Black Business in America
Buying black has been at the center of the fight for civil rights since Reconstruction. In the days after emancipation, black businesses flourished. Though the government never ponied up the promised 40 acres and a mule, many black Americans were able to build thriving general stores, barbershops and funeral homes.

Bustling areas of economic activity were called “Black Wall Streets” and could be found all over the country, most famously in Tulsa, Oklahoma; Richmond, Virginia; and Birmingham, Alabama.

Incensed by their success and competition, white Americans laid waste to entire communities, salting the earth with lynchings, tax sales, predatory land speculation and disenfranchisement.

Over the years, every prominent figure in the movement for racial equality implored their brothers and sisters to spend money within the community and boycott white businesses to, in the words of Martin Luther King Jr., “redistribute the pain” Jim Crow inflicted. The day before he was assassinated in Tennessee, King had a “buy black” message in his “I’ve Been to the Mountaintop” speech.

“We’ve got to strengthen black institutions,” King said. “You have six or seven black insurance companies here in the city of Memphis. Take out your insurance there.”

Paradoxically, integration hurt black businesses, marking a steady decline in the type of collective economics that had been the norm. Black Americans were hobbled as entrepreneurs, but not as consumers, as multinational companies began targeting them or creating separate products of sometimes unequal quality.

“Every time you spend your money, I would argue you’re voting,” said Kristian Henderson, the founder of BLK + GRN, a marketplace in Washington, D.C., selling all-natural products made by black artisans. “You’re voting on what companies are successful and what companies aren’t. I think more people are recognizing that their dollars are that powerful.”

“Racism is inherent to the fabric that is America, and there’s really nothing we can do to change that,” she said. “But what we can do is be really, really conscientious about how we spend our money.”

Where We Buy Black
There was a time when people looking for black-owned companies to patronize had a hard time finding them. Big-box stores and chains made convenience, not provenance, king. Why do the legwork of tracking down several different items when you can get everything you need in one place?

“All the things I needed as a black person I typically wasn’t buying from black people,” said Jazzi McGilbert, the founder of Reparations Club, a marketplace that opened in Los Angeles in June. “We just needed the things that we needed when we needed them, and we got that where we could.”

Now a new wave of entrepreneurs have created businesses — e-commerce platforms, bricks-and-mortar shops, subscription boxes and pop-up markets — that primarily or exclusively sell black-owned products.

Customers are looking for more than just “shea butters and dashikis,” said Nikki Porcher, the founder of the nonprofit Buy From a Black Woman. “If you can go to one place and find all of these buyers and sellers under one house,” she said, “that gets rid of the excuses of ‘I can’t find’ or ‘I don’t know.’” (McGilbert and Porcher have worked with my black motherhood company.)

The e-commerce platform We Buy Black may be closest to meeting the big-box model. Along with its marketplace in Atlanta, it also plans to create a supermarket called Soul Food Market there. We Buy Black stands out for selling products you would think would be hardest to find — that is, “black versions” of things like batteries, laundry detergent and dog food.

“A segment of our community was doubtful that we would be able to produce everything we want and need,” Shareef Abdul-Malik, the chief executive of the platform, said via email. Over time, he said, We Buy Black was able to release everyday products to replace ones from larger nonblack-owned companies — products like toothbrushes, detergent, toilet tissue and shaving razors.

Barriers to Reaching a $1.3 Trillion Market
Black spending power, currently at $1.3 trillion, is on track to reach $1.5 trillion by 2021, according to a report by Nielsen. The group outspends in proportion to its population in several categories, from ethnic hair care and beauty (85%) to bottled water (16%).

Yet most of their money goes to white-owned multinational companies. Diversity programs that help promote emerging businesses owned by minorities lump all minority groups together (including businesses owned by veterans, LGBTQ and disabled people), Anderson said. This can obscure who is actually getting the contracts.

“From what I’ve heard from some of the vendors at my space, they have a hard time being taken seriously by buyers,” McGilbert said. “Some of the excuses white retailers will give is ‘the quality is not up to par,’ ‘the packaging’s not up to par.’ There’s all these expenses that go into developing brands that can sit comfortably on Sephora’s shelves. But I find they’ll walk people through the process and help them get there, and a lot of people aren’t doing that with black-owned brands.”

Access to capital is a recurring barrier to growth for businesses of all stripes, but traditional financing options are especially difficult for black owners. When black entrepreneurs do get loans, they tend to receive lower amounts and at higher interest rates than other groups.

Black women, the fastest growing segment of business owners, are the least likely to receive investments from venture capitalists. They account for less than 1% of the $424.7 billion raised in tech VC funding since 2009, according to the 2018 Project Diane study conducted by DigitalUndivided, an organization that empowers women entrepreneurs of color.

Michelle Dalzon is confronting this reality as she plans the next phase of the Black-Owned Market, or theBOM, her three-year-old pop-up. Dalzon put on her first event in New York in December 2016 without sponsors. It was a huge success — guests came from as far away as Ohio to shop — but it depleted her savings.

“That whole market, altogether, was, like, $16,000 that I have not recouped yet,” she said.

‘Why Don’t We Have That?’
As much as the Buy Black movement calls attention to systemic issues, it also holds up a mirror to the community. Many black businesses say that even after addressing the discoverability issue, they still have the hurdle of overcoming black consumer bias toward black businesses.

“We vote black, church black, but we do not buy black,” Anderson said. “These owners feel like no one is in their corner.”

That sentiment has led to two oft-repeated, though most likely apocryphal, statistics. One is that only 2 cents of every black dollar is spent with black-owned businesses.

The other, though debunked by a media student at Howard University, has grown legs and hands to wag a disappointed finger: A dollar’s life span is 28 days in Asian communities, 19 days in Jewish communities and a mere 6 hours in black communities.

Though these numbers are hard to substantiate, their existence is an attempt to call attention to the “we support our own” ethos people say they see in other groups — and how other communities profit from majority black consumer bases without reinvesting in the community. (Even though black Americans spend 9 times more on their hair than other races, Korean Americans own 70% of the beauty supply stores in America, according to reporting by public radio station WOSU in Columbus, Ohio.)

After ticking off examples of the successes of other cultures, a black entrepreneur may well ask, “Why don’t we have that?”

From his table at a Black-Owned Small Business Saturday pop-up event, Robert Robinson, a brand ambassador for an all-natural sanitary napkins brand called Cherish, was blunt.

“A lot of black consumers do not trust black business owners,” Robinson said. “It goes back to conditioning: ‘I’d rather trust a white face than a black face behind the counter.’”

Building Up Black Dollars and Communities
Much like civil rights leaders of the past, the new wave of black entrepreneurship is just as motivated by social and economic uplift as it is by profits. By returning to the collective economic principles of yesteryear, entrepreneurs and consumers are hoping to replicate the success of business leaders turned community guardians like Jackie Robinson and Madam C.J. Walker, the hair-care tycoon (and reportedly the first black millionaire).

At Reparations Club, McGilbert buys products upfront and pays vendors’ wholesale rates, instead of using a commission-based model, so they’re not waiting for a paycheck. And in having a business, she’s living a dream long held but never realized by her mother.

“My mom literally had to die to leave me some form of wealth,” McGilbert said of her mother’s small insurance policy. “So I’m taking that and trying to invest in myself and in my community.”

It’s well documented that the wealth gap between black and white Americans is vast. According to a 2019 report by the Institute of Policy Studies, “the median black family today owns $3,600 — just 2% of the wealth of the median white family.” By some estimates, black wealth hasn’t changed since the 1960s. Even more devastating, the report found that “black family wealth is on track to reach zero wealth by 2082.”

This latest push is an attempt to course correct and reverse that trend. Black business owners have a median net worth 12 times higher than a black person who doesn’t own a business, according to the Association for Enterprise Opportunity.

Black wealth through entrepreneurship could help shore up the middle class: Black businesses are the second highest employers of black people after the government, which has not been as steady an employer of late as it has been in the past.

“Buy Black” is the start of the conversation, Dalzon said, and an answer to the question of how to build generational wealth.

“I am the result of a black-owned business,” she said. “I was able to get a proper education, to really experience the world in a different way,” she said. “I feel like if you can support a black-owned brand, that’s what you’re supporting.”