How Amazon raised prices to profit from the pandemic

by Alex Harman

Part 8 - Amazon Is Engaged in Price Gouging on Products It Sells Directly

While the initial media and law enforcement focus of price gouging was on third-party sellers, this report establishes that Amazon is directly selling items at significantly above the regular market price despite publicly stating that the company is fighting price gouging.

This report will focus on essential products, that would be covered under an existing or proposed price gouging statute, that saw the most notable price increases during the COVID-19 pandemic.

Note: All products in this section were listed as “sold by Amazon,” and not sold by third-party vendors.

Disposable Face Masks Package: 1000% Price Increase

It is difficult to make apples-to-apples comparisons of the prices of disposable face masks because those sold during the pandemic tend to be from new sources. Nonetheless, roughly equivalent products are priced far higher than they were before the onset of the pandemic. In addition, the sourcing for the products appears to have shifted to unknown imported brands of questionable quality and reliability.

The example below was first made available on Amazon in April and has been priced as high as $39.99. Prices for this type of package of 50 masks generally were around $4 before the pandemic.

The graph below shows the Amazon price over time and indicates that it was sold by Amazon, not a third-party seller. Many of the reviews for this product indicate that the straps fall off and that the packaging is open or does not contain the specified amount of masks.

Other retailers have largely sold out of this type of product, but where we were able to find comparable products, the price was similar. This is a disturbing example of a price rising due to demand and holding despite a prohibition on exactly this type of price gouging.

Hand Sanitizer: 48% Price Increase

Major brand name hand sanitizer is largely unavailable on Amazon.com. The U.S. Food and Drug Administration has issued a strong warning against more than 100 hand sanitizer products because of methanol contamination. Consumers attempting to purchase hand sanitizer now face the difficulty of finding a product that is not only safe and available but also affordable.

On August 16, 2020, Amazon sold a 12-pack of 8oz. “Germ-X Hand Sanitizer” for $35.38. The same day, a similar 8oz. Germ-X hand sanitizer bottle was sold for $1.99 on another retail site. Notwithstanding typical quantity package discounts, this reflects a significant increase over the expected price.

Disinfectant Spray: 87% Price Increase

Antibacterial disinfectant sprays continue to be hard to find on online retailers including Amazon.com. This “Bissell Woolite Advanced Stain and Odor Remover + Sanitize” is categorized under carpet cleaning but claims to kill 99.9% of bacteria. It has been available on Amazon for over five years priced at $6.99 but has been marked up routinely since March 19, 2020, when it was priced at $13.04.

Antibacterial Soap: 470% Price Increase

Antibacterial hand soap has become more available since the shortages at the beginning of the pandemic, but Amazon.com still has limited options available. One example is “Dial Liquid Hand Soap, Spring Water, 7.5 Fl. Oz” which has been priced on Amazon.com in recent months as high as $7 and as low as $1.49.

Nitrile Disposable Gloves: 336% Price Increase

The pack of 100 “Safeguard Nitrile Disposable Gloves” is sold on Amazon.com for $29.95 but has previously been sold by Amazon for as little as $8.91.

Toilet Paper: 528% Price Increase

Toilet paper is arguably the most notorious product impacted by the COVID-19 pandemic. From empty store shelves, to customers fighting over the last package, the story of hoarding toilet paper was a frequent subject for journalists. One contributing factor to the shortages was shift from work to home as business grade toilet paper is a different product with a different supply chain than that sold for home use.

Amazon has recently sold “Scott 1000 Sheets Per Roll, 8 Toilet Paper Rolls” for as much as $36.39. This represents a 528% price increase over the $6.89 that other retailers are have charged for the same product, and a 260% increase over the lowest price at which Amazon has sold this item.

Amazon recently has sold “Quilted Northern Ultra Soft and Strong Toilet Paper, Mega Rolls, 12 Count of 328 2-Ply Sheets Per Roll” for $32.25, a 283% increase over the recent low of $11.38.

Amazon recently has sold “Quilted Northern [Ultra Plush] Bathroom Tissue, 18 Count” for $37.93, a 217% increase over the recent lowest price of $17.48.

Amazon recently has sold “Quilted Northern Ultra Plush Toilet Paper, 24 Mega Rolls” for $41.96, a 76% increase over the lowest price of $23.78 that Amazon has charged.

Paper Towels: 303% Price Increase

Like with toilet paper, at the onset of the COVID-19 pandemic retail stores quickly sold out of paper towels. Amazon recently sold “Brawny Tear-A-Square Paper Towels, 8 Rolls” for $46.94, a 303% increase over the recent low price of $15.49.

Amazon recently sold “Sparkle 2-Ply Perforated Roll Paper Towels,” 15 roll case for $42.45, a 201% increase over the January 2020 price of $20.99.

Flour: 425% Price Increase

One of the unique features of the COVID-19 pandemic is how it changed behavior over a sustained period of time. Because so many people spent so much time at home with their families, habits and patterns changed. A surprising example was the increase in home baking, and the shortages of key ingredients like flour, yeast, corn starch, and sugar. Unlike some of the hoarding and panic buying that led to shortages of other more obvious products, the shortages in baking ingredients have been due to an actual increase in consumption and have been sustained.

Amazon recently sold “Pillsbury BEST All Purpose Unbleached Flour, 5 Pound (Pack of 8)” for $80.35. This is just over $10 per bag of flour that typically sells for as little as $2.36 at other online retailers. This is a 425% increase.

Amazon recently sold “King Arthur Flour All-Purpose Flour, 10 Pound” for $19.87, a 317% increase over of the $6.27 other retailers have charged for this item.

Sugar: 520% Price Increase

Like with flour, shortages and increased demand have been common with sugar. Amazon recently sold “Domino Pure Cane Confectioners Powdered Sugar, 1 lb” for $5.56 per box, representing a 520% increase over the $1.07 other retailers have priced the same item.

Corn Starch: 1010% Price Increase

Another baking ingredient that Amazon has been selling at a significant increase is corn starch. Recently, Amazon sold “Clabber Girl Corn Starch, 6.5 Ounce” for $8.99, a stunning 1010% increase over the $0.89 that other retailers charge for this item.

Source, links, references:

https://www.citizen.org/article/prime-gouging/

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