October 6, 2014

Blackonomics: 'The Cost of NOT Doing Business'

by Jim Clingman
cross-posted from Blackonomics

Over the past few decades Black people have been led to believe that we have “power” because we earn and spend so much money in the marketplace, now having eclipsed the $1 trillion mark. As the most studied consumer segment in the world, Black Americans are touted by dozens of studies as the most brand loyal and the biggest spenders, especially on specific goods and services such as fast foods, movies, cellphones, hair and skin care, and sweetened drinks, just to name a few. Is that power? Well, it is for those on the receiving end of those dollars, but not so for Black consumers. It’s more akin to a weakness.

You have heard the term, “The cost of doing business,” which means that folks in business have certain costs that come with the territory. Some characterize it by saying, “It takes money to make money.” Agreed, of course; but how much money does it take for businesses that Black consumers support to make more money? What is their cost of doing business within the Black consumer segment? The answer: little or nothing. They get our money with little effort or reciprocity.

So why do studies always point out that we have power in the marketplace? Black spending power, Black purchasing power, and the power of the Black consumer are all phrases that are utilized by researchers who point to our billions in consumption spending. The question is “power.” Are we powerful simply because we spend a lot of money?

Read the rest of this Blackonomics article.

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