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June 14, 2014

Study Says Many Americans Hate Doing Business Online With Black Entrepreneurs

It is estimated that there are well over 100,000 e-commerce retailers in the U.S. now, but a study completed by Stanford University showed a disturbing fact. Americans are biased against doing business with online black entrepreneurs.

What the study showed

Researchers studied the online retail market for over a year. They posted ads of products being held by a black person, a white person, and a white person with a tattoo. Here's what the responses from buyers showed:
  • Black sellers received 13 percent fewer responses from buyers and 17 percent fewer offers
  • When black sellers did get offers, the offers were 2-4 percent lower than what white sellers received
  • Buyers were less trusting with black sellers, indicated by the 7 percent less willingness to sign their name for a product being purchased from a black seller
  • Buyers were far less likely (44 percent) to accept mail delivery to their homes and exhibited a high degree of reluctance (56 percent) to pay for products through online methods when buying from black sellers vs white sellers.

The bigger issue

As the researchers expressed, the "discrimination by consumers may in fact underlie other forms of discrimination.” Discrimination shown by buyers when purchasing online is a good indication that discriminatory practices are occurring in other areas as well. This includes hiring practices. Black applicants are half as likely to receive a job interview as whites for the same job.

Researchers summed up their fears regarding buyer discrimination by stating that "consumer discrimination is the most likely cause of racial differences in the economy."