The case of the Tennessee Purell profiteer

Now that the Purell crisis seems to have abated - at least if you're an individual rather than an institution (think health care facilities and homeless shelters, which may still be dealing with inventory and supply chain problems), and at least if you live in a place that in a few days went from "why don't you work from home," to "close all the bars and restaurants", to "school's out forever," to "any day now we'll be requiring everyone to shelter in place" - the story about the fellow in Tennessee who was hoping to profit big time by corning the market for hand sanitizers has pretty much dropped from site.

After all, those of us sitting at home have good old soap and water at our tap tips whenever we feel the need to do a surgical scrub. And if we do venture out for a walk - which, blessedly, is still allowed - we can sterilize our hands on our return. (And don't forget to bathe your housekeys in alcohol.) "Real" handwashing is more effective anyway, we're told. Purell? That's so yesterday. (Just in case there's a quasi return to normalcy, I went through all my pocketbooks, traveling kit and bathroom drawers and found that, over the years, I had accumulated 10 tiny bottles of Purell or CVS equivalent. So I'm definitely good to go out!)

The would-be Purell profiteer, one Matt Colvin, has been making his living (a pretty good six-figure living) playing Amazon arbitrage with consumer products that no one needs but, at a moment in time, a lot of people seem to want. More power to him if he can scoop up a bunch of Nikes or tons of the toy-of-the-moment and sell them at an exorbitant markup to lunkheads willing to pay. Supply and demand, etc. 

A few years ago, I was adding toys to the Amazon wishlist for a holiday-related kids' charity I volunteer with. Some little finger puppet was the rage at the moment, but a few minutes after I added them to our list, the price had shot up from $10 to more than $50, which is our limit. I had to get back on and take them off the list, and post a note on our website warning donors that if they saw a toy much over $50 out there, please not to buy it. 

But if someone's willing to let themselves get panicked into spending way too much money for a kid's toy or a pair of sneakers, have at it, sucker.

Price gouging for hand sanitizers when everyone's scared that if they touch a doorknob or scratch their nose, they're going to kill their grandmother, that's another story.

When Colvin saw the news breaking about the coronavirus, he and his brother Noah sprung into a silver S.U.V. and began driving around Tennessee and Kentucky cleaning out the shelves of hand sanitizers, Clorox wipes, masks, and anything else that seemed like it soon be in high demand. 

I'll give the Colvin Brothers credit for getting a jump on this market, and understanding that fear would drive demand which would drive prices. And I bet they figured that out without the benefit of having taken Econ 101. 

At first, business was good. 

Mr. Colvin said he had posted 300 bottles of hand sanitizer [on Amazon] and immediately sold them all for between $8 and $70 each, multiples higher than what he had bought them for. (Source: NY Times)

He also made a killing selling "pandemic packs" acquired from a company that had gone out of business. Each pack included "50 face masks, four small bottles of hand sanitizer and a thermometer." He snagged 2,000 of them for $3.50 a pack and was able to sell them at a premium - from $40 to more than $50 a pack. A good enough profit, I'd say. Even after shipping and handling and whatever eBay charges, he had an excellent payday. 

No wonder he thought he'd be able to find someone who'd be willing to pay through the nose - which is okay, as long as you don't actually touch your nose; just saying - for his 17,700 bottles of hand sanitizer.  But then, before he could fully unload: 

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.

These comanies were responding to twitter criticism, backlash from customers (like the distributors that supply hospitals, homeless shelters, and CVS), and fear that regulators would be breathing down their neck, Amazon and EBay stopped the profiteering with a big tsk tsk.

“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.”

That left Covin with nearly 18,000 bottles of hand sanitizer. And all those dreams of putting his "'family in a good place financially'" were out the window.

Colvin is by no means the only one out there who had acquired massive stocks of in-demand goods, but he was one of the few who was willing to use his story and his full name, and the only one to allow himself (and his wife and his baby) to be photograpehd by The New York Times. (Cute baby, by the way.)

He's a tad defensive about his efforts, pointing out that whatever price he charges covers shipping, handling, fees to the middleman (Amazon, eBay) and, of course his labor. 

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.” 

He also argued that he's just a market corrective, just performing a public service. Ya, well, so was Bill Bob during that hurricane. Sometimes a weasel is just a weasel. 

Anyway, once the online guys took the folks like Colvin offline, he decided that he might just sell locally and "make a slight profit." He added:

"... 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.”

Well, Mr. Colvin, if you're not looking to get in the news for being a pandemic profiteer, you might have thought through your decision to talk with The  New York Times.  You might still have gotten some Internet play if the Chattanooga Times Free Press had done this story. But The New York Times? Seriously, bro?

In the end, Colvin ended up donating his cache.

“It was never my intention to keep necessary medical supplies out of the hands of people who needed them,” he said. “That’s not who I am as a person."

I don't know about that. What was it Maya Angelou told us? Oh, yeah, "When someone shows you who they are, believe them the first time."

All this doesn't make him a 100% bad guy, of course. Just someone who got greedy and didn't think that this was sort of a shitty thing to do when people are so frightened by the pandemic. Not to mention so keen on his 15 minutes of fame that he was willing to blast his story all over The New York Times. Maybe he thought that would help him move his goods, but it sure looks like dumbfuckery from where I sit (sequestered in my living room, decided when to take myself up for my day's walk).

Maybe next time Matt Colvin will keep it to price gouging with the Nike sneakers. Have at it!