COVID-19 / BUSINESS Bloomberg Businessweek March 16, 202040
TARGET: RICHARD LEVINE/ALAMY. DATA: CAMELCAMELCAMELSenator Edward Markey complained in a letter to
Amazon Chief Executive Officer Jeff Bezos that the
company isn’t doing enough, citing the $400 Purell
recently found on the giant e-tailer’s site.
Sky-high prices are also spilling over to peer-to-
peer marketplaces like Craigslist Inc. and OfferUp
Inc. One entrepreneur in Seattle is making his own
hand-sanitizing concoction with aloe gel and rub-
bing alcohol, packing the green slime in empty
sports-drink bottles, and selling it on Craigslist for
$45 a jug. He declined to be interviewed.
At the Lampe Berger Paris smoke shop in
Midtown Manhattan, employee Moses Ifti said he
got some side eyes when he doubled the price of a
hand sanitizer to $10. But three people snapped up
all 30 bottles he had on display. “The customer is
looking at me crazy, but it’s sold out everywhere,”
he says. “People know they can’t get it anywhere
else. What are they going to do?”
There’s no question that panicked shoppers want
things right now. Nine of the top 10 search terms
on Amazon since Feb. 26 were coronavirus-related,
according to Helium 10, which tracks the site.
Amazon searches for hand sanitizer over the past
30 days spiked to 1.5 million on March 1, up from
90,000 on Dec. 1, according to Helium. Prices for
some bestselling sanitizers doubled.
The demand is rippling out to survival-related
products. Sales of freeze-dried food and emergency
food supplies on Amazon rose 432% and 391%,
respectively, last week compared with the previ-
ous week, says Michael Lagoni, CEO of Stackline,
an e-commerce data analytics company.
The Amazon algorithms that determine which
products people see punish merchants that let
their products run out. So some merchants use
pricing systems “designed to raise prices so prod-
ucts don’t run out of stock before they’re replen-
ished,” says Juozas Kaziukenas, founder of New York
e-commerce researcher Marketplace Pulse. “That
causes prices to spike during demand surges.”
Amazon, EBay, and OfferUp say they’re mon-
itoring their sites. “There is no place for price
gouging on Amazon, and that’s why our teams
are monitoring our store 24/7 and have already
removed tens of thousands of offers for attempted
price gouging,” a spokesman says. “We are disap-
pointed that bad actors are attempting to take
advantage of this global health crisis.”
OfferUp has taken down hundreds of listings
that violate its policies, a spokesman says. The com-
pany wouldn’t say precisely how it calculates a vio-
lation, but the spokesman says $100 for a container
of hand sanitizer would likely fit the bill. —Spencer
Soper and Gerald Porter Jr., with David R. Baker○ Governments worldwide are sounding alarms
about price gouging and threatening crackdowns
as the Covid-19 pandemic spreads fear and a surge
in demand for hand sanitizer and face masks. But
it’s unlikely that some vendors will stop demanding
$400 for a two-pack of 2-ounce bottles of Purell any-
time soon. (Yes, it happened; the stuff goes for $10.)
The anti-gouging laws on the books are tricky
to enforce when demand suddenly outstrips sup-
ply. Sometimes even just defining a violation is dif-
ficult, says Geoffrey Rapp, a law professor at the
University of Toledo in Ohio. “While there’s an
instinctive reaction that prices shouldn’t swing
wildly after a major natural event, man-made
disaster, or something like the current corona-
virus scare,” he says, “there’s a blurry line between
responses to the natural movement of supply and
demand and those that should truly be prohibited.”○ Can we suspend
the law of supply
and demand?
Most American states have laws targeting the pricing
of food, fuel, and other essentials during an emer-
gency. But they’re largely symbolic, Rapp says,
because prices often jump before an emergency
is declared. And some economic thinkers argue
anti-gouging rules prevent the laws of supply and
demand from efficiently resolving a shortage.
Efforts are under way nonetheless. In Washington
state, Attorney General Bob Ferguson has encour-
aged residents to report possible price gouging. A
New York lawmaker introduced a bill that would
impose fines of up to $25,000 on stores selling face
masks at “unconscionably excessive” prices.
For Amazon.com Inc., EBay Inc., and other
online retailers, the immediate issue is how to
react to price surges on their sites. Their algorithms
are designed to fight profiteering; they also assign
employees to manually monitor items. But that’s
often a whack-a-mole exercise, with products getting
pulled off only to quickly reappear. Massachusetts○ Augason Farms
emergency food supply
Amazon:
$109.64
Third-party seller:
$347.90○ Clorox wipes, six
canisters of 75 wipes
Amazon:
$22.41
Last available
third-party seller:$79.99
○ Clorox bleach, 121 oz.
Amazon:
$16.58
Third-party seller:
$29.99○ Purell, 8 fl. oz.
pumps, 12-pack
Amazon:
$45.34
Last available third-
party seller:
$299.99What?
Prices of sold-out
Amazon products,
as of March 10
gougingbe stopped?