After Amazon's crackdown on price gouging, some sellers who cleared out local stores are sitting on stockpiles, causing shortages of products like sanitizer
Amazon cracked down on coronavirus price gouging. Now, while the rest of the world searches, some sellers are holding stockpiles of sanitizer and masks.
New York TimesJack Nicas
Context & Ripple Effects
Amazon moved against coronavirus price gouging just as resellers who had cleared out local stores of sanitizer and masks were counting on marketplace margins — and the crackdown froze that inventory in place. The move followed [[a:951311|eBay's decision days earlier to ban new hand-sanitizer, wipe, and N95 mask listings outright]], making Amazon the second major marketplace to intervene in the same week.
The timing matters because demand was already outrunning supply: a day after this report, Amazon warned of Prime delivery delays and stockouts on household staples, and weeks later [[a:952368|reporting on more than 30 sources detailed how the virus spreading through over 50 warehouses strained its ability to keep essentials moving at all]].
First-order effects
Sellers sitting on cleared-out store stock can no longer flip it at gouged prices, so sanitizer and masks are trapped in private warehouses instead of reaching shoppers — the shortage deepens even though the goods physically exist.
Amazon takes on direct policing costs, removing listings and suspending accounts, while absorbing buyer anger over both the empty shelves and the sellers' original clearing-out of local stores.
Enforcement alone did not hold the line — by September, [[a:957794|a Public Citizen report found Amazon had itself significantly raised prices on essential products despite promising otherwise]], giving critics evidence that first-party conduct undercut the third-party crackdown.
Third-order effects
Marketplaces are becoming de facto emergency price regulators, and the pattern points from pricing rules toward outright category bans — the eBay model — whenever enforcement lags the arbitrage.
If crisis-era controls harden into standing policy, reseller behavior shifts from open-market flipping to hoarding off-platform, pushing regulators to target inventory accumulation itself rather than listed prices.
The trend: During the pandemic, major marketplaces are being pushed from passive hosts into active rationers of essential goods, with each enforcement failure inviting heavier-handed bans and political pressure.
Something that shouldn't be lost in this story: Both Amazon and third-party sellers increased prices for sanitizer and masks as the coronavirus spread, according to our analysis of @junglescout data. The prices mostly dropped when Amazon took action. Graphic by @ellawinthrop: htt…
Can't find hand sanitizer? Matt Colvin has 17,700 bottles of it. He emptied stores across Tennessee, hoping to profit. Then Amazon pulled his listings for price gouging. Now he's one of likely thousands of Amazon sellers sitting on stockpiles. My story: https://www.nytimes.com/..…
Update: I spoke with Matt Colvin just now and he said he is exploring ways to donate all the supplies. We've updated our story. https://www.nytimes.com/...
Amazon itself is currently selling four rolls of toilet paper for $72.43. I've reached out to Amazon for an explanation. The listing is here but I've also attached a screenshot presuming it will soon be taken down after my inquiry: https://www.amazon.com/... h/t @michaelhood http…
EXACTLY. @amazon is not an innocent bystander here. Now that they've locked out 3rd party sellers, they can jack it up to whatever they want! Those of us who sell w/some ethics can't do a THING to bring it down. https://twitter.com/...
I can't believe this man felt comfortable letting the NYT publish his face and his whole government name!!!! standing next to all that sanitizer that he tried to profiteer! fam! https://twitter.com/...
Amazon said it's cool for Nike to get cheap labor and modern slaves to sew their overpriced merch but some dude trying to flip hand sanitizer at a premium to feed his family was the last straw. 😂 https://twitter.com/...
#UPDATE: The Tennessee Attorney General's Office has ordered two brothers who purchased 17K+ bottles of hand sanitizer to stop buying and selling medical goods. @WKRN https://www.nytimes.com/...
Being too small was his mistake...if his operation were big enough for him to hire lobbyists he would basically be a pharmaceutical company. https://twitter.com/...
Colvin tries to suggest he's doing a good thing and helping to “correct inefficiencies in the marketplace.” Then he contacted the writer of the piece (but only after it was published) to make sure people know he's “exploring” donating the hand sanitizer. This man is disgusting. h…
I've seen the many tweets referencing the wild last line on this story, and let me say, I'm pleased people still read to the end. But if you haven't yet, give it a click: https://www.nytimes.com/...