Editorial: Capitalism or price gouging? Two brothers get shut down after buying up hand sanitizer, jacking up prices.


On March 1 when the first death from COVID-19 was announced of a U.S. citizen, two brothers left in their SUV to pick up hand sanitizer. They checked in at stores in and around Chattanooga, TN., such as Walmart, Staples and Home Depot among others. They cleaned the supply off the shelves.

This is an interesting story about capitalism vs. price gouging. In the United States, we have a concept in the free market known as supply and demand.

Typically, when the demand is high and the supply is low, businesses may decide to charge a higher price because they can. Likewise, when the demand is low and the supply is high, prices tend to go down in order to move the items. It is a relatively simple concept.

Now to the brothers, Matt and Noah Colvin.

Over the next few days, the brothers put on 1,300 miles driving across Tennessee and Kentucky in which they filled a U-Haul truck with thousands of bottles of hand sanitizer, as well as thousands of packs of antibacterial wipes.

Their haul came primarily from small “mom and pop” type stores located off the beaten path. The reason was, as Matt said, “because the major metro areas were cleaned out.”

Matt had stayed at home in the Chattanooga area waiting for pallets of wipes and hand sanitizer and started listing them on Amazon.

Colvin said that he put up 300 bottles of hand sanitizer and immediately sold them for between $8 and $70 each, which was many times more than he had paid for them. Capitalism or price gouging? You be the judge.

For Matt Colvin, “it was crazy money.”

The next day, Amazon suspended sales of the Colvin’s supply of hand sanitizer, antibacterial wipes and face masks, as well as those of other sellers as well.

Other suppliers were warned that if they continued running up their prices, they would lose their accounts. A few days later, eBay imposed even stricter measures, outright banning any U.S. sales of masks or hand sanitizer.

So even as millions of Americans are in a desperate search for hand sanitizer, the Colvin’s are sitting on a boatload of it with nowhere to sell it. This really makes you wonder what Americans were doing prior to this pandemic “crisis.”

Were they not washing their hands? Inquiring minds want to know.

“It’s been a huge amount of whiplash,” Matt Colvin says. “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?’”

Here’s the thing. While people like the Colvin’s engage good old-fashioned American capitalism, people who truly need these items such as the elderly and those with autoimmune issues go without.

Let’s go to toilet paper. Who in God’s name needs 10 24-packs of toilet paper? What is the purpose? Can they do it? Sure, it’s a free country.

But when stores are stripped bare of items such as toilet paper, paper towels and Kleenex it begs the question: are these people not listening to what they truly need to fight this virus?

Or just like when we have a snowstorm in the northeast, when panic buying strips store shelves of milk and bread, it doesn’t matter?

Amazon said that they have recently removed hundreds of thousands of listings and suspended thousands of sellers’ accounts for price gouging related to the coronavirus.

Online sellers who use platforms such as Amazon, eBay and others to sell their goods are trying to stop them from making excessive profits from a public health crisis.

By the time that these companies were actually able to put an end to the online price gouging, most of the third-party sellers had already cleared out their local stores and started selling the goods online.

The issue now has become that not only are the actual physical stores devoid of these items, but so-called “digital” shelves are also nearly empty.

One person who has been looking for hand sanitizer is Mikeala Kozlowski, who is a nurse from Dudley, Mass. She has been searching for hand sanitizer since before she gave birth to her first child on March 5.

She looked in stores, which were of course sold out. When she checked online at Amazon, she couldn’t find it for less than $50.

“You’re being selfish, hoarding resources for your own personal gain,” she said of those jacking up their prices online.

Since coming online in the past couple of decades, Amazon and eBay have launched a growing industry, where independent sellers pick up discounted merchandise, or hard-to-find items which they then post online and sell worldwide from the comfort of their homes, without having a brick and mortar location.

These bargain hunters typically look for items that they can pick up on the cheap, and then flip for a profit. Since this pandemic started gaining traction, they found their new opportunity to make big money quickly.

By looking on Amazon to find out hot items that were being searched for on the site, they found items such as “Purell,” N95 mask” and “Clorox wipes.” So, online sellers do what they do?

Stock up on the items and sell for what the market would bear using the law of supply and demand.

The strategy worked, at least for a couple of weeks, according to a New York Times analysis of historical prices from a site called Jungle Scout, which tracks data for Amazon sellers.

After the spike in prices on Amazon, and pressured by pressure and criticism and customers, Amazon cracked down on the online retailers.

Last week, Amazon implemented policies to restrict the sale of these items, and this past week went even further, outright banning the sale of any coronavirus-related products by certain third-party providers on their platform.

“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.”

Colvin, who is 36, and a former Air Force technical sergeant, began selling on Amazon in 2015, and actually developed it into a six-figure career, primarily selling Nike shoes and pet toys, and also by following trends.

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Colvin noted in early February the spread of the coronavirus in China and thought he might be able to take advantage of it. He bought 2,000 “pandemic packs” from a liquidation firm, which consisted of 50 face masks, four small bottles of hand sanitizer and a thermometer. Colvin bought the lot for $3.50 each.

He listed the 50-packs of masks on eBay for $40-$50 each, sometimes more and sold them all. Colvin would not tell the Times what he realized on the sales, but acknowledged it was substantial. He then pounced on the hand sanitizer and wipes when he saw the American public starting to flip out.

Colvin wasn’t the only one as other sellers around the country were doing the same thing, buying up masks, sanitizer and anti-bacterial wipes.

Right now, you are hard pressed to find any of the above items on any store in the country, and that is depriving people who need them from getting them. While we obviously operate in a free market economy, sometimes the better interests in general might trump personal profit.

On Sunday, after Tennessee officials announced that they would investigate him for price gouging, Colvin donated two-thirds of his supply of hand sanitizer and antibacterial wipes from him. They said that they would distribute those supplies to needy people statewide in the Volunteer State, according to the New York Times.

The other third was taken by the Tennessee attorney general’s office, who said that they will give the supply to the attorney general’s office in Kentucky, where Colvin purchased some of the products earlier this month.

Unfortunately, Colvin was doxed somehow and after the Times initial report on the issue on Saturday, Colvin was called out online and some even contacted him with threatening messages and his address was posted online. On Saturday night, a man actually went to his home and started banging on the door.

Colvin was apologetic on Sunday, saying that he did not realize the extent of the spread of the coronavirus outbreak across the nation, or the shortage of sanitary products.

“I’ve been buying and selling things for 10 years now. There’s been hot product after hot product. But the thing is, there’s always another one on the shelf,” he told the Times.

“When we did this trip, I had no idea that these stores wouldn’t be able to get replenished.”

“It was never my intention to keep necessary medical supplies out of the hands of people who needed them,” he continued. “That’s not who I am as a person. And all I’ve been told for the last 48 hours is how much of that person that I am.”

Prior to Colvin making his donation, Tennessee Attorney General Herbert H. Slatery III said in a statement, “We will not tolerate price gouging in this time of exceptional need, and we will take aggressive action to stop it.”

Tennessee law says that the attorney general’s office can “put a stop to price gouging and seed refunds for consumers,” according to the press release.

With that said Colvin and his brother bought the products before Gov. Bill Lee (R) declared a state of emergency on March 12, which tripped the price gouging law. Colvin and his brother did not sell anything after the state of emergency was declared.

This is a tough one for us to call. While we are unabashed supporters of capitalism and the free enterprise system, there are times when we may have to take a little pause.

With that said, after 9/11 we allowed the government to take away some of our freedoms via the Patriot Act, in the name of “safety and security.”

Maybe there is some kind of happy medium between protecting the free enterprise system and ensuring that people aren’t able to profit from national crises.

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