The Hype Surrounding Purell on Amazon

In recent days, a single bottle of Purell hand sanitizer on Amazon has been selling for an exorbitant price, almost reaching $50. This has prompted discussions on whether Amazon is engaging in price gouging—or if it is merely a case of independent sellers taking advantage of the situation.

The debate is fueled by the belief among consumers that Amazon has adequate resources to keep prices stable, while it is actually third-party sellers who are setting these high prices. This article aims to clarify the causes behind the surge in prices and examine the economic principles at play.

Economic Principles in Times of Crisis

The concept of price gouging is grounded in economic principles. During emergencies, such as a pandemic, demand for essential items like hand sanitizer can skyrocket, leading to shortages. When panic sets in, some sellers take advantage by raising prices, knowing that consumers will still buy the product, albeit at a higher cost.

Economic Analysis: The economic philosophy behind price gouging is rooted in the belief that raising prices during a crisis will deter speculation and ensure that the product reaches those who need it most, albeit at a higher cost. This is often seen as a fair trade-off in the context of a public health emergency.

Are Amazon Prices Really Gouging?

Many consumers are quick to blame Amazon for the price hikes, but the reality is more complex. Most products on Amazon are listed by third-party sellers who set their own prices. Amazon primarily provides a platform for these sellers and typically does not control pricing.

Marketplace Dynamics: Amazon's role as a marketplace is distinct from that of a traditional retailer. It hosts thousands of independent sellers, each with their own inventory and pricing strategies. In the case of Purell, it is these third-party sellers who are deciding their own prices based on supply and demand.

Amazon's Response to Price Hikes

Amazon has recognized the issue and has taken steps to address it. In recent days, the company has begun removing listings that are selling for exorbitant prices. This demonstrates that Amazon is committed to maintaining order in its marketplace and ensuring that consumers are not overly burdened by inflationary market forces.

Step-by-Step Measures: Removing listings that are selling at excessively high prices. Banning or restricting certain sellers if necessary. Enhancing its monitoring systems to detect and prevent unjustified price increases.

Third-Party Sellers and Shortages

It is important to understand that the surge in prices is partly due to limited supply. Some third-party sellers have minimal stock remaining and are taking advantage of the high demand by increasing their prices. This further exacerbates the challenge of making essential items like hand sanitizer accessible to everyone.

Impact of Panic Buying: Panic buying leads to hoarding by the first few buyers, leaving others without access. Raising prices acts as a deterrent, reducing the number of speculative buyers and ensuring that those who truly need the product can obtain it, albeit at a higher cost.

Does Rationing Solve the Problem?

One solution often suggested is rationing, where items are allocated based on need rather than purchasing power. However, rationing comes with its own set of challenges, such as administrative complexity and potential for corruption.

Challenges with Rationing: Implementing a successful rationing system is difficult without creating its own set of issues. The focus should remain on a marketplace system that rewards honesty and reduces speculation.

Conclusion

The current situation with Purell on Amazon highlights the complexities of market dynamics during emergencies. While it is true that some third-party sellers are engaging in price gouging, it is also important to understand that Amazon is taking steps to address the issue and that this phenomenon is more reflective of the broader marketplace than the company itself.

Consumers should be aware that the market plays a critical role in allocating resources during times of crisis, and that some form of price increase may be necessary to ensure that essential items are available to those who need them most, even if it means higher costs for some.