Amazon cracked down on coronavirus price gouging

An Amazon merchant, Matt Colvin, with an overflow stock of cleaning and sanitizing supplies in his garage in Hixson, Tenn.Credit...Doug Strickland for The New York Times
He Has 17,700 Bottles of Hand Sanitizer and Nowhere to Sell Them
Amazon cracked down on coronavirus price gouging. Now, while the rest of the world searches, some sellers are holding stockpiles of sanitizer and masks.

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Jack Nicas
By Jack Nicas
March 14, 2020, 5:00 a.m. ET
On March 1, the day after the first coronavirus death in the United States was announced, brothers Matt and Noah Colvin set out in a silver S.U.V. to pick up some hand sanitizer. Driving around Chattanooga, Tenn., they hit a Dollar Tree, then a Walmart, a Staples and a Home Depot. At each store, they cleaned out the shelves.

Over the next three days, Noah Colvin took a 1,300-mile road trip across Tennessee and into Kentucky, filling a U-Haul truck with thousands of bottles of hand sanitizer and thousands of packs of antibacterial wipes, mostly from “little hole-in-the-wall dollar stores in the backwoods,” his brother said. “The major metro areas were cleaned out.”

Matt Colvin stayed home near Chattanooga, preparing for pallets of even more wipes and sanitizer he had ordered, and starting to list them on Amazon. Mr. Colvin said he had posted 300 bottles of hand sanitizer and immediately sold them all for between $8 and $70 each, multiples higher than what he had bought them for. To him, “it was crazy money.” To many others, it was profiteering from a pandemic.

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The next day, Amazon pulled his items and thousands of other listings for sanitizer, wipes and face masks. The company suspended some of the sellers behind the listings and warned many others that if they kept running up prices, they’d lose their accounts. EBay soon followed with even stricter measures, prohibiting any U.S. sales of masks or sanitizer.

Now, while millions of people across the country search in vain for hand sanitizer to protect themselves from the spread of the coronavirus, Mr. Colvin is sitting on 17,700 bottles of the stuff with little idea where to sell them.

“It’s been a huge amount of whiplash,” he said. “From being in a situation where what I’ve got coming and going could potentially put my family in a really good place financially to ‘What the heck am I going to do with all of this?’”

Mr. Colvin is one of probably thousands of sellers who have amassed stockpiles of hand sanitizer and crucial respirator masks that many hospitals are now rationing, according to interviews with eight Amazon sellers and posts in private Facebook and Telegram groups from dozens more. Amazon said it had recently removed hundreds of thousands of listings and suspended thousands of sellers’ accounts for price gouging related to the coronavirus.

Amazon, eBay, Walmart and other online-commerce platforms are trying to stop their sellers from making excessive profits from a public health crisis. While the companies aimed to discourage people from hoarding such products and jacking up their prices, many sellers had already cleared out their local stores and started selling the goods online.

Now both the physical and digital shelves are nearly empty.

Mikeala Kozlowski, a nurse in Dudley, Mass., has been searching for hand sanitizer since before she gave birth to her first child, Nora, on March 5. When she searched stores, which were sold out, she skipped getting gas to avoid handling the pump. And when she checked Amazon, she couldn’t find it for less than $50.

“You’re being selfish, hoarding resources for your own personal gain,” she said of the sellers.

Sites like Amazon and eBay have given rise to a growing industry of independent sellers who snatch up discounted or hard-to-find items in stores to post online and sell around the world.

These sellers call it retail arbitrage, a 21st-century career that has adults buying up everything from limited-run cereals to Fingerling Monkeys, a once hot toy. The bargain hunters look for anything they can sell at a sharp markup. In recent weeks, they found perhaps their biggest opportunity: a pandemic.

As they watched the list of Amazon’s most popular searches crowd with terms like “Purell,” “N95 mask” and “Clorox wipes,” sellers said, they did what they had learned to do: Suck up supply and sell it for what the market would bear.

Initially, the strategy worked. For several weeks, prices soared for some of the top results to searches for sanitizer, masks and wipes on Amazon, according to a New York Times analysis of historical prices from Jungle Scout, which tracks data for Amazon sellers. The data shows that both Amazon and third-party sellers like Mr. Colvin increased their prices, which then mostly dropped when Amazon took action against price gouging this month.

At the high prices, people still bought the products en masse, and Amazon took a cut of roughly 15 percent and eBay roughly 10 percent, depending on the price and the seller.

Then the companies, pressured by growing criticism from regulators and customers, cracked down. After the measures last week, Amazon went further on Wednesday, restricting sales of any coronavirus-related products from certain sellers.

“Price gouging is a clear violation of our policies, unethical, and in some areas, illegal,” Amazon said in a statement. “In addition to terminating these third party accounts, we welcome the opportunity to work directly with states attorneys general to prosecute bad actors.”

Mr. Colvin, 36, a former Air Force technical sergeant, said he started selling on Amazon in 2015, developing it into a six-figure career by selling Nike shoes and pet toys, and by following trends.

In early February, as headlines announced the coronavirus’s spread in China, Mr. Colvin spotted a chance to capitalize. A nearby liquidation firm was selling 2,000 “pandemic packs,” leftovers from a defunct company. Each came with 50 face masks, four small bottles of hand sanitizer and a thermometer. The price was $5 a pack. Mr. Colvin haggled it to $3.50 and bought them all.

Hand sanitizer that Mr. Colvin is keeping in a storage locker.
Hand sanitizer that Mr. Colvin is keeping in a storage locker.Credit...Doug Strickland for The New York Times
He quickly sold all 2,000 of the 50-packs of masks on eBay, pricing them from $40 to $50 each, and sometimes higher. He declined to disclose his profit on the record but said it was substantial.

The success stoked his appetite. When he saw the panicked public starting to pounce on sanitizer and wipes, he and his brother set out to stock up.

Elsewhere in the country, other Amazon sellers were doing the same.

Chris Anderson, an Amazon seller in central Pennsylvania, said he and a friend had driven around Ohio, buying about 10,000 masks from stores. He used coupons to buy packs of 10 for around $15 each and resold them for $40 to $50. After Amazon’s cut and other costs, he estimates, he made a $25,000 profit.

Mr. Anderson is now holding 500 packs of antibacterial wipes after Amazon blocked him from selling them for $19 each, up from $16 weeks earlier. He bought the packs for $3 each.

Eric, a truck driver from Ohio who spoke on the condition that his surname not be published because he feared Amazon would retaliate, said he had also collected about 10,000 masks at stores. He bought each 10-pack for about $20 and sold most for roughly $80 each, though some he priced at $125.

“Even at $125 a box, they were selling almost instantly,” he said. “It was mind-blowing as far as what you could charge.” He estimates he made $35,000 to $40,000 in profit.

Now he has 1,000 more masks on order, but he’s not sure what to do with them. He said Amazon had been vague about what constituted price gouging, scaring away sellers who don’t want to risk losing their ability to sell on its site.

To regulators and many others, the sellers are sitting on a stockpile of medical supplies during a pandemic. The attorney general’s offices in California, Washington and New York are all investigating price gouging related to the coronavirus. California’s price-gouging law bars sellers from increasing prices by more than 10 percent after officials declare an emergency. New York’s law prohibits sellers from charging an “unconscionably excessive price” during emergencies.

An official at the Washington attorney general’s office said the agency believed it could apply the state’s consumer-protection law to sue platforms or sellers, even if they aren’t in Washington, as long as they were trying to sell to Washington residents.

Noah Colvin, Mr. Colvin’s brother, moving boxes of hand sanitizer from his brother’s storage locker on Thursday.
Noah Colvin, Mr. Colvin’s brother, moving boxes of hand sanitizer from his brother’s storage locker on Thursday.Credit...Doug Strickland for The New York Times
Mr. Colvin does not believe he was price gouging. While he charged $20 on Amazon for two bottles of Purell that retail for $1 each, he said people forget that his price includes his labor, Amazon’s fees and about $10 in shipping. (Alcohol-based sanitizer is pricey to ship because officials consider it a hazardous material.)

Current price-gouging laws “are not built for today’s day and age,” Mr. Colvin said. “They’re built for Billy Bob’s gas station doubling the amount he charges for gas during a hurricane.”

He added, “Just because it cost me $2 in the store doesn’t mean it’s not going to cost me $16 to get it to your door.”

But what about the morality of hoarding products that can prevent the spread of the virus, just to turn a profit?

Mr. Colvin said he was simply fixing “inefficiencies in the marketplace.” Some areas of the country need these products more than others, and he’s helping send the supply toward the demand.

“There’s a crushing overwhelming demand in certain cities right now,” he said. “The Dollar General in the middle of nowhere outside of Lexington, Ky., doesn’t have that.”

He thought about it more. “I honestly feel like it’s a public service,” he added. “I’m being paid for my public service.”

As for his stockpile, Mr. Colvin said he would now probably try to sell it locally. “If I can make a slight profit, that’s fine,” he said. “But I’m not looking to be in a situation where I make the front page of the news for being that guy who hoarded 20,000 bottles of sanitizer that I’m selling for 20 times what they cost me.”

After The Times published this article on Saturday morning, Mr. Colvin said he was exploring ways to donate all the supplies.

COIVD-19 crisis
Tenn. attorney general investigates reports of price gouging during COIVD-19 crisis
Coronavirus (Source: None)
By Staff | March 15, 2020 at 8:26 AM CDT - Updated March 15 at 8:47 AM
MEMPHIS, Tenn. (WMC) - The Tennessee Attorney General has ordered two men to stop buying and selling medical products after reports of price gouging surfaced amid the novel coronavirus pandemic.

Attorney General Herbert Slatery’s investigation has led him to believe, Noah and Matt Colvin of Nixson, Tennessee bought the products from stores in Tennessee and Kentucky.

In a statement released by the AG’s office, Slatery says price gouging at a time such as this will not be tolerated.

“We will not tolerate price gouging in this time of exceptional need, and we will take aggressive action to stop it,” said Attorney General Herbert H. Slatery III. “During this pandemic, we ask that you report suspicious activity to the Division of Consumer Affairs and refrain from threatening or hostile communication with individuals or businesses you may suspect are price gouging. Our team will review complaints closely and we are prepared to act to protect Tennesseans.”

Matt Colvin
The Hand Sanitizer in the NYT story is being donated to a local church and first responders tomorrow

Well, that was concise.

‘We’re hustlers’: Amid coronavirus fears, this couple has made more than $100,000 reselling Lysol wipes
Thu., March 12, 2020

VANCOUVER—As Manny Ranga and his wife, Violeta Perez, loaded up their Ford F-150 pickup outside a Costco near downtown Vancouver this week, some passersby couldn’t help but stop and stare.

What stood out wasn’t just the sheer volume of the couple’s purchase. It was the fact that it was all the same product: Stacks upon stacks of Lysol disinfecting wipes.

Manny Ranga loads his truck with Lysol wipes that he bought in bulk Wednesday at a Costco store near downtown Vancouver. Ranga and his wife buy the supplies in bulk and resell them on Amazon.
click to see caption
Manny Ranga and his say they’ve made a bundle in the past three weeks buying cleaning supplies and Lysol wipes in bulk, then reselling them on Amazon.
“Is that all for you?” one stranger asked.

“Cleaning company,” Perez answered.

She was technically correct — they had just cleaned out the store.

The couple say they’ve made a bundle in the past three weeks hitting up every Costco store in the region each day, buying up as many Lysol wipes and liquid cleaners as they can — spending thousands of dollars at a time — and then reselling them, mostly on Amazon, to private individuals and companies.

Amid the growing coronavirus outbreak, the hoarding and reselling of certain household supplies to make a quick buck has become a global phenomenon, contributing to frenzied panic buying by shoppers who’ve been fed a steady diet of images of empty store shelves on social media.

Ranga, 38, said one six-pack of wipes that goes for $20 at Costco can fetch four times that online. (A check of Amazon on Thursday showed that a six-pack was going for $89 under their seller name “Violeta & Sons Trading Ltd.”)

After shelling out about $70,000 in bulk buys, Ranga said they’ve made more than $100,000 in sales.

“It’s a big opportunity with all these products,” he said.

Amazon was said to be cracking down on “bad actors” who were raising prices on basic needs products by blocking or removing offers. “There is no place for price gouging on Amazon,” the company said, according to media reports.

The government in Japan, meanwhile, reportedly introduced new rules making the reselling of face masks for profit a crime punishable by a one-year jail term or a hefty fine.

Manny Ranga and his wife say they've made a bundle in the past three weeks buying cleaning supplies and Lysol wipes in bulk, then reselling them on Amazon.

Ken Whitehurst, executive director of the Consumers Council of Canada, said Thursday that while it’s not clear what impact large-scale buying and selling of products is having on the overall supply chain in Canada, he takes a dim view of people who would exploit emotions.

“It makes you queasy in the stomach when people exploit an emergency solely for the purpose of making few extra dollars,” he said.

Retailers can always exercise informal supply management by limiting how much of a product can be bought at one time, he said. While there are laws aimed at addressing “unconscionable pricing,” government authorities will typically only intervene if they know that vital safety interests of the public are being compromised.

The fact that the Japanese government stepped in with new rules on reselling masks sends a signal that this is a situation where “citizens are in it together,” he said.

“My observation is the Japanese government is making a statement that … people who are doing this need to stop and consider the contribution they could be making to public hysteria.”

After filling up the bed of his pickup with stacks of wipes, Ranga drove back to the couple’s Vancouver home to unload the merchandise. Perez, 37, stayed behind, keeping watch over a second trolley-load, while munching on a Costco hot dog.

“Someone’s making a lot of money,” said a curious passerby.

Perez explained their business venture was sparked a few weeks ago when they went to the store to buy supplies, including hand sanitizer. A woman stopped them outside the store and offered to pay them double what they had paid, she said.

The couple, who describe themselves as home developers, immediately saw an opportunity.

“Everything we do, we’re in the moment,” she said. “We’re hustlers.”

It’s simple supply and demand, Perez said. And right now, there’s “high demand.”

Every day, while a nanny cares for their three young children, the couple fans out across the region, hitting up Costcos in Vancouver, Richmond and Burnaby working with quick efficiency.

Timing, she said, is everything. Show up later in the day and sometimes a lot of stock is gone.

Perez said while some Costco staff have responded to their daily visits with a “good for you” attitude, some store managers greet them more icily and have told them customer complaints are mounting.

The store near downtown Vancouver threatened to impose limits on how much could be purchased at one time, Perez said.

“It’s not fair,” she said. “We’re not the only ones who do it.”

The Star reached out to Costco for comment but did not receive a response.

The enterprise has turned into an all-consuming affair. Perez said her husband opened a Fed-Ex account and bought tape guns and other shipping supplies.

If buyers are local, he’ll make deliveries in person. Otherwise, he’ll send them through the post office.

Perez said she actually wanted her husband to wait a couple more weeks before selling, but he was too “excited” to get started.

Later, at the couple’s home, as Ranga transferred another truckload of wipes into his garage, he explained why he’s mainly focusing on wipes and cleaning liquids and not other in-demand products, such as toilet paper.

Toilet paper packages are “too big” and “harder to ship.” Because the six-pack wipes already come in protective wrap, he can just slap on a shipping form and send it off.

His home garage isn’t the only place where he stores his merchandise; there’s also a car wash in south Vancouver where he drops off supply, he said.

Self proclaimed hustlers.
These people are truly despicable.