5 ms·

It's already happened. Ever since the coronavirus hit China, N95 masks have been sold or selling out in the US. I'm sure some were bought by preppers, but man

by Seenso 7y ago

It's already happened. Ever since the coronavirus hit China, N95 masks have been sold or selling out in the US. I'm sure some were bought by preppers, but many were bought to export to China to help relieve acute shortages in Wuhan. Also, US medical facilities and government already don't have a sufficient stockpile, so there will be shortages and they're talking about changing usage practices to conserve the supply. 3M, at least, has said they're going to prioritize medical customers, but they're not going to catch up until April, at least. https://www.washingtonpost.com/health/shortages-confusion-and-poor-communication-complicate-coronavirus-preparations/2020/02/25/d9e56396-575d-11ea-9b35-def5a027d470_story.html https://www.washingtonpost.com/health/shortages-confusion-an...

TeMPOraL 7y ago
Let's not forget price gouging. There are those despicable "entrepreneurs" that bought up masks to resell them on-line at high markup. There's supply and demand, but then there's straight profiteering from a public health crisis.
- dmurray 7y ago
  To play devil's advocate: the profiteers are providing the mask manufacturers with cashflow and a strong market signal to manufacture more masks. Given that the coronavirus is spreading so slowly, this kind of market activity might actually increase the availability of masks when they're actually most necessary. Of course, there are other ways to achieve this effect: governments could order the mask manufacturers to step up production, or the manufacturers could take a gamble on the future and step up production before seeing an increase in sales (and a bank could finance that if cashflow was an issue). But you know, you wouldn't criticize the mask manufacturers for increasing production and thereby profits, so it's a bit harsh to blame the intermediaries.
  - Seenso 7y ago
    > They are providing the mask manufacturers with cashflow and a strong market signal to manufacture more masks. No they're not. The profiteers are resellers that bought masks/respirators from the manufacturers at regular price, then sell them with a crazy markup. I've been watching the prices of these items throughout this whole crisis, and the prices of 3M respirators sold through reputable retailers has not budged. 3M is not increasing them either: https://news.3m.com/blog/3m-stories/3m-responds-2019-novel-coronavirus https://news.3m.com/blog/3m-stories/3m-responds-2019-novel-c...: > 3M has not changed the prices we charge for 3M respirators as a result of the outbreak
    - TeMPOraL 7y ago
      Indeed. They're just savvy enough to get a week ahead of the crowd and buy up all the stock, incidentally triggering the panic buying (it's not the regular people that bought enough of personal protection equipment that the stores started running short; it's the resellers, and the missing stock is what gets people scared).
    - dmurray 7y ago
      Profiteers buying masks, at the regular price 3M is happy to sell at, doesn't increase 3M's bottom line?
      - Seenso 7y ago
        > Profiteers buying masks, at the regular price 3M is happy to sell at, doesn't increase 3M's bottom line? Not any more than legitimate customers buying the same masks. They provided no signal that 3M wasn't already receiving loud and clear. Profiteers don't add anything to the situation except their parasitic markup. They misallocate scarce resources away from where they're needed, and those resources end up wasted either in their personal horde or in the hands of those who have more money than sense.
        nucleardog 7y ago
        Again, playing devil's advocate a bit... At first, the prices in the local market here were normal and people were buying hundreds of respirators and masks. As prices have been driven up (almost exclusively this profiteering and parasitic markup, big retailers have not increased prices), people've been buying closer to what they feel they need rather than trying to stockpile -- when the mask is $2, it's easy to grab 50 or 100. When they're $25 people are only buying 1 or 2. Gross as it is, this is serving some good -- it's helping to distribute the available inventory over a wider population, instead of concentrating it with the few people that are stockpiling them or exporting them.
        Seenso 7y ago
        > At first, the prices in the local market here were normal and people were buying hundreds of respirators and masks. One point here, which I think I established previously, is that price movement provided no useful information to the manufactures. The most useful information came directly from institutional medical customers (who were the first to know), not retail profiteers working off of secondary reports in secondary markets. > As prices have been driven up (almost exclusively this profiteering and parasitic markup, big retailers have not increased prices), people've been buying closer to what they feel they need rather than trying to stockpile -- when the mask is $2, it's easy to grab 50 or 100. When they're $25 people are only buying 1 or 2. > Gross as it is, this is serving some good -- it's helping to distribute the available inventory over a wider population, instead of concentrating it with the few people that are stockpiling them or exporting them. However, the profiteers are stockpilers, and they probably stockpile more extremely than even the most aggressive personal-use stockpiler. For example, looking at it from a pure profiteering standpoint: it's good business if I can buy 1000 masks for $1 each and sell 100 for $20 each during the crisis, I just doubled my money. However, I just wasted 900 masks in the process, from POV of society. Profiteers are panic-driven speculators, and their economic interest is to make wasteful decisions (otherwise they're potentially leaving money on the table). When the crisis is over, they can just unload their (wasted) inventory at the normal price (for instance, by taking advantage of a retailer's return policy). Also, like TeMPOraL noted, the profiteer's speculative buying could fuel the panic that caused those 100 sales of $20 masks. The signal of empty shelves may be false, or falsely magnified. It's kinda like cornering a market, in that regard. You also assume people are willing to deal with the profiteers. I don't think that's necessarily the case, especially at a 500-2500% markup. For instance: I'd refuse to buy from a profiteer out of principle, and either live without or use alternatives. This kind of profiteering is a pretty clear market failure, not an example of the market providing benefit. It's a failure just like government warehouse steering essential supplies away from first responders and the public and towards government elites.

by Seenso 7y ago

TeMPOraL 7y ago

Let's not forget price gouging. There are those despicable "entrepreneurs" that bought up masks to resell them on-line at high markup. There's supply and demand, but then there's straight profiteering from a public health crisis.

dmurray 7y ago
To play devil's advocate: the profiteers are providing the mask manufacturers with cashflow and a strong market signal to manufacture more masks. Given that the coronavirus is spreading so slowly, this kind of market activity might actually increase the availability of masks when they're actually most necessary. Of course, there are other ways to achieve this effect: governments could order the mask manufacturers to step up production, or the manufacturers could take a gamble on the future and step up production before seeing an increase in sales (and a bank could finance that if cashflow was an issue). But you know, you wouldn't criticize the mask manufacturers for increasing production and thereby profits, so it's a bit harsh to blame the intermediaries.
- Seenso 7y ago
  > They are providing the mask manufacturers with cashflow and a strong market signal to manufacture more masks. No they're not. The profiteers are resellers that bought masks/respirators from the manufacturers at regular price, then sell them with a crazy markup. I've been watching the prices of these items throughout this whole crisis, and the prices of 3M respirators sold through reputable retailers has not budged. 3M is not increasing them either: https://news.3m.com/blog/3m-stories/3m-responds-2019-novel-coronavirus https://news.3m.com/blog/3m-stories/3m-responds-2019-novel-c...: > 3M has not changed the prices we charge for 3M respirators as a result of the outbreak
  - TeMPOraL 7y ago
    Indeed. They're just savvy enough to get a week ahead of the crowd and buy up all the stock, incidentally triggering the panic buying (it's not the regular people that bought enough of personal protection equipment that the stores started running short; it's the resellers, and the missing stock is what gets people scared).
  - dmurray 7y ago
    Profiteers buying masks, at the regular price 3M is happy to sell at, doesn't increase 3M's bottom line?
    - Seenso 7y ago
      > Profiteers buying masks, at the regular price 3M is happy to sell at, doesn't increase 3M's bottom line? Not any more than legitimate customers buying the same masks. They provided no signal that 3M wasn't already receiving loud and clear. Profiteers don't add anything to the situation except their parasitic markup. They misallocate scarce resources away from where they're needed, and those resources end up wasted either in their personal horde or in the hands of those who have more money than sense.
      - nucleardog 7y ago
        Again, playing devil's advocate a bit... At first, the prices in the local market here were normal and people were buying hundreds of respirators and masks. As prices have been driven up (almost exclusively this profiteering and parasitic markup, big retailers have not increased prices), people've been buying closer to what they feel they need rather than trying to stockpile -- when the mask is $2, it's easy to grab 50 or 100. When they're $25 people are only buying 1 or 2. Gross as it is, this is serving some good -- it's helping to distribute the available inventory over a wider population, instead of concentrating it with the few people that are stockpiling them or exporting them.
        Seenso 7y ago
        > At first, the prices in the local market here were normal and people were buying hundreds of respirators and masks. One point here, which I think I established previously, is that price movement provided no useful information to the manufactures. The most useful information came directly from institutional medical customers (who were the first to know), not retail profiteers working off of secondary reports in secondary markets. > As prices have been driven up (almost exclusively this profiteering and parasitic markup, big retailers have not increased prices), people've been buying closer to what they feel they need rather than trying to stockpile -- when the mask is $2, it's easy to grab 50 or 100. When they're $25 people are only buying 1 or 2. > Gross as it is, this is serving some good -- it's helping to distribute the available inventory over a wider population, instead of concentrating it with the few people that are stockpiling them or exporting them. However, the profiteers are stockpilers, and they probably stockpile more extremely than even the most aggressive personal-use stockpiler. For example, looking at it from a pure profiteering standpoint: it's good business if I can buy 1000 masks for $1 each and sell 100 for $20 each during the crisis, I just doubled my money. However, I just wasted 900 masks in the process, from POV of society. Profiteers are panic-driven speculators, and their economic interest is to make wasteful decisions (otherwise they're potentially leaving money on the table). When the crisis is over, they can just unload their (wasted) inventory at the normal price (for instance, by taking advantage of a retailer's return policy). Also, like TeMPOraL noted, the profiteer's speculative buying could fuel the panic that caused those 100 sales of $20 masks. The signal of empty shelves may be false, or falsely magnified. It's kinda like cornering a market, in that regard. You also assume people are willing to deal with the profiteers. I don't think that's necessarily the case, especially at a 500-2500% markup. For instance: I'd refuse to buy from a profiteer out of principle, and either live without or use alternatives. This kind of profiteering is a pretty clear market failure, not an example of the market providing benefit. It's a failure just like government warehouse steering essential supplies away from first responders and the public and towards government elites.