Why Do Black Businesses Charge So Much Though?

You’ve heard that question before and you may have asked it a time or two. Walmart can sell you a bar of Dove soap for around a dollar but a Black entrepreneur making soap might easily be twice that. What gives? There are a variety of factors that influence pricing but let’s just take a look at some of the more common.

Volume

Have you noticed that the price of laundry detergent at the corner store is dramatically higher than Walmart? Walmart buys in serious bulk. The bottle of Tide you buy from them is literally one of millions it purchases from the distributor. When purchasing at that volume, obviously, Walmart is able to negotiate a much better cost per unit. Tide is happy making pennies per bottle, knowing pennies multiplied by millions will make them millions. On the flip side, when you buy Tide at the local corner store it costs significantly more than it does at Walmart. The corner store buys a case of Tide at a time and thus the price is much higher, per bottle.

Black entrepreneurs often don’t have a major buyer, like a Walmart. Whether they are selling their product to a retail outlet at wholesale or directly to consumers on WeBuyBlack or another site, the volume is nowhere near that of a Walmart. Even so, Black entrepreneurs often deliver insane value, even without the advantages other companies enjoy. For example, True Detergent‘s 101 oz bottle retails for $14.99 and cleans 101 loads. A 100 oz bottle of Tide retails at my local grocer (normally) for around $12.99. So maybe Tide is the one overcharging and not True — I’m just saying.

Quality and Craftsmanship

Look carefully and you’ll see that Dove doesn’t market itself as a “soap.” Dove “Beauty Bar” is probably the catchy term you’ll see. Dove is actually a commercial detergent. Generally, Black owned brands build their companies off of quality. You get what you pay for so instead of cheap ingredients that are harmful for your family, Black entrepreneurs routinely give you the absolute best. Safer ingredients and handmade products are simply not what you find at the big retailers. Handmade products, crafted with love, will outperform anything sitting on a shelf at Target, stuffed with artificial preservatives. Handmade and top notch simply can’t be delivered at poverty pricing…but generic products at Walmart can be. You don’t expect lotions at the dollar store to rival high-end lotion brands, right? Quality isn’t cheap, nor should it be.

What to Do?

Our answer to everything is to “Buy Black.” As we buy more from our Black entrepreneurs, we’ll all reap the benefits. There are any number of ingredients needed to make soap. Black entrepreneurs who make it can purchase those ingredients in bulk as their need increases. When those entrepreneurs begin purchasing more in bulk, their cost per unit will decrease. As demand for their product grows they will be in demand with more retailers. As retailers are buying at higher volumes, again, per unit costs decrease. As those companies are producing more, their labor costs per unit will eventually decrease.

Dove and Tide had to start somewhere. They weren’t always what they were. If we believe in Black people having self determination and not empowering others to rule over us, it’s up to us to support our own. Maybe you can’t make every purchase with a Black owned company and we get that. The question isn’t what can’t you do but what can you.

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