Walgreens: sold out. CVS: sold out. Amazon: overpriced or out of stock.
As you might have heard, eBay recently banned the sales of face masks, hand sanitizers, and disinfectant wipes because of the ridiculous pricing. Ever since COVID-19 took on its first victim in the United States, people have become increasingly sensitive to hygiene. Here are the effects.
What is the easiest, most convenient way to maintain hygiene? Hand sanitizers. Previously underrated, in my opinion, the focus on these products have increased exponentially. The demand multiplies every single day, while the rate of supply remains fairly consistant. After all, how can companies increase their production rates that quickly? As people scramble to get a bottle, those who have more hand sanitizers than they need see an opportunity to make some quick money. They enlisted their extra bottles for extremely high prices. For example, a 3-pack of 1-ounce Purell hand sanitizers, like the one depicted above, would usually be around $8. On eBay and Amazon, however, they were sold for $59.
This seems like a monopolised business: the third-party sellers with the $59 hand sanitizer are the suppliers, and the ones surfing the internet and buying those products are the consumers. The suppliers can raise the price to whatever they want to because the demand is unchanging for now. The difference between traditional monopoly and the case of hand sanitizers is the number of suppliers. In a normal monopoly, there may be a single large enterprise that is controlling the price. However, in this case, there are numerous parties working towards the same goal.
The challenge for them is to make as much money as the can, without having it be too much. The price that they sell at needs to be one that is slightly lower than the others in order to attract customers, but also one that makes a substantial amount of money.
Fortunately eBay has shut down the selling of these temporarily popular items. Do you think that it was a fair choice, or is it taking away free market?
Sources:
https://www.entrepreneur.com/article/347346
Sources:
https://www.entrepreneur.com/article/347346
I think its very interesting how related this concept is to elasticity and supply and demand. Personally, I don't think that people should be able to resell these products as they are not in any way associated with the making of the product. I think its unethical in times such as these.
ReplyDeleteI would disagree about the ethics of this. While I am faily sure we agree on the fact that people buying an entire store's stock of supplies is unethical, I do not think that they need to be stopped in terms of selling them. If they are bought already, the items have no use, as one person cannot go through an entire stores stock, hopefully, but if they are able to be sold, at least some could be redistributed into the market.
DeleteThis is an interesting read for me. It almost seems to be an antithesis: now in a sense consumers are selling products and becoming the price makers. Weird, because they did not produce the products in the first place. I think that this is unfair and selfish in a way because it is leading to unnecessary competition. People are holding back on supplies that could help others and potentially save lives because they want to make some extra money right now. What is to stop grocery stores from upping the costs of water or toilet paper? I think that eBay made the right decision in this case because otherwise they would be allowing people to manifest their greediness in a time where that is definitely not needed.
ReplyDeleteThis is a very relevant and interesting article. I personally think it is wrong for those to hoard products and resell them for extreme prices as there are people who genuinely need those items during this time. However, I still think they should be available as it is always better to have some than none. I think there should have possibly been price caps set towards these sorts of items so that they can still be sold at a reasonable price and individuals who need them can access them. However, I realize there are also risks to using this method. The question remains: how can we allow individuals to get the essential items they need fairly?
ReplyDeleteThere was one New York Times article about a scalper who blamed the increased costs on "packaging and shipping" of the bottles of hand sanitizer and toilet paper he was selling. He is just creating inefficiencies in the market for everyone, as suppliers have already worked out the most efficient way to sell their products in stores. So when someone like that scalper decides to buy everything out in a 100 mile radius and redistribute them through post, it directly harms the consumer.
ReplyDeletehttps://www.nytimes.com/2020/03/14/technology/coronavirus-purell-wipes-amazon-sellers.html
This reminds me of elasticity and the Spending Project we did in class. At this crucial time, hand sanitizers and other cleaning supplies are in high demand and the supply can not keep up because most people are prevented from working due to the fear of the virus spreading. Because of this, these products are often inelastic.
ReplyDelete