The NYT article linked below tells a curious tale of an entrepreneur who let greed get the better of him. On the day after the first COVID-19 death, this person decided to go to multiple small shops within neighboring states; eventually purchasing 17,700 bottles of hand sanitizer during a 1,300 mile buying spree that targeted "mom and pop" and dollar stores.
In short, this guy and his brother had some good instincts to anticipate demand; however, those good instincts were not used for a good purpose. If you mark up items 2,000 percent during a pandemic (or any absurd multiple), you're not "providing a public service" to the paying public, you are profiteering off of fear and misery...pure and simple; and that's wrong.
In the end, here's what we have: a greedy guy sitting on a stockpile of goods that are highly demanded via the public; but, can't be sold via typical online channels, such as e-Bay or Amazon, because the seller has been suspended. That's not right either that the goods are being wasted. Those crucial goods should be evenly and widely distributed at fair pricing...and there's a way to accomplish that; or so I believe.
Question: Does Amazon and e-Bay's lack of proactive strategy for price gougers create, as Catholics like to say, an "occasion to sin?" Worse yet, do the online marketplaces participate in the sin, up to a point by lacking a proactive approach? Think about those questions for a moment, and I'll come back to them shortly.
My suggestion: companies such as e-Bay and Amazon should consider instituting emergency unit pricing maximums for certain consumer items such as antibacterial wipes, hand sanitizer, M95 masks, N95 respirators and perhaps other items that could likewise be gouged. In short, the online sales outlets earn a fixed % of each sale; so, to an extent, they are complicit in price gouging if they allow somebody to use their forum for such a purpose (the article stated that those organizations made approximately 15% of the over-inflated sales price). The percentage becomes like the vig on a gambling windfall when allowed to exist. Seems like an "occasion to sin" is set up where the online market companies can profit along with the price gougers until they cut them off; at which point they claim the moral high ground. Surely, these online sales venues know that some of their customers are getting the screws put to them; yet, the online sales markets ride the rising tide until such time as they are ready to jump off. When they jump off the rising tide, that's when they step in, claiming to protect the little guys. And let's face it, these online shopping sites know our habits of buying. Accordingly, it should not be hard for them to proactively identify the habits of unscrupulous sellers in times of tumult and beat them to the punch rather than joining in the game. They are masters of buying behavior. I don't think that they can claim to have no insight as to the behavior of sellers.
For items such as the aforementioned, place a unit max. (per weighted box of sanitizing wipes, per fluid ounce of hand sanitizer, per mask by type of mask, etc.) and extend that list as needed during the time of crisis. Once again, I'm only talking about implementing this in times of emergency crisis or national emergency and for a predetermined list of items likely to be gouged. Other than that, let the market dictate terms for the non-essentials. During routine times, I could care less how much somebody wants to overpay for a Cabbage Patch doll; and neither should the market. The list could likewise have some flexibility to respond to specific factors within a catchment zone. For example, if restaurants are shut down in a certain geographical locale and/or if there is a shortage of food goods, perhaps grow the list to include items such as MREs.
Amazon, etc. should let guys like the Colvin brothers back in if:
- They refund to those who they previously gouged, based on the established maximum unit price established by the sales outlet. This would place both the unscrupulous seller and the online distribution network in better stead by ensuring that the distasteful transaction was reversed for all parties concerned: the consumer, the seller, and the online selling entity.
- They adhere to the emergency UCR fee schedule. If they can't adhere, they can't list those specific items.
- Amazon, e-Bay, etc. should review the fee schedule periodically during the calamity; because, when true shortages do exist, the wholesale prices can be impacted if demand far outpaces production capabilities. You don't want to force your sellers to lose money; but, they should be allowed to make a reasonable return on their investment without gouging others who buy on said online medium.
- Taking an approach such as this would possibly allow the 17,700 bottles that this vendor has to go to good use rather than sitting, unsold, in somebody's garage. *See possible exception below.
- Online services, such as Amazon and e-Bay should likewise limit purchase quantities to ensure that the goods can be evenly distributed and not further hoarded by another segment of hoarders.
- Online services should augment the unit pricing reviews with shipping cost limits to ensure that vendors don't price gouge by adhering to unit cost restrictions; but, while padding the shipping and handling fees to draconian limits.
- If online sales entities undertook a strategy such as this, they could potentially identify attempts to gouge even before the item was ever posted. I'm a firm believer that the industry has the technical capabilities to established proactive metrics.
It's self serving for the online entities to police themselves aggressively. If they choose not to implement emergency measures for emergency goods, the government will step in and force them to do so anyhow; and, such online entities will also be subject to gouging based on the overinflated percentages that they took in prior to shutting down their opportunistic and immoral vendor partners.
*Also, realize, in a scenario such as the Colvin brothers' stockpile, they might not be able to sell even if Amazon, etc. were to established an emergency UCR schedule for items subject to high demand during an emergency. Why would this be? The Colvin brothers made mass purchases of retail goods with the intention of selling at a new retail rate; rather, they did not, to my knowledge, buy goods at wholesale.
Lastly, I've never been a vendor of e-Bay and Amazon. I've only ever made purchases from them. Accordingly, I have no insight as to the specifics of their current sales policies for vendors who sell on their sites. I'm relying on information from the NYT author who indicated (a) the online markets make a fixed percentage on the sales and (b) sales were made at over-inflated prices prior to the online markets shutting down the vendors; thus leading the prudent person to believe that no emergency UCR exists and that the current strategy is somewhat arbitrary and completely reactive rather than proactive.
No comments:
Post a Comment