Hundreds of the essential products that have come to define pandemic living have sustained significant price increases on Amazon this year, with some jumping to many multiples of their original price, research suggests.
Analysis published by the US Public Interest Research Group, a non-partisan consumer advocacy organisation, looked at 750 “essential” items sold on Amazon’s marketplace, comparing their pre-pandemic prices to what customers paid for them at the end of 2020.
The items monitored ranged from essential products such as face masks and toilet paper to those that have become suddenly popular in lockdowns such as computer monitors.
Hospital Report
Increase
PIRG found that of the 750 items, the prices of 409 had increased by more than 20 per cent, while 136 had more than doubled. Patio heaters, suddenly a must-have during winter lockdowns, had the most significant percentage increase, with one model up from $150 (€123.38 )to $699 – a 366 per cent jump.
“What we found,” said report author Grace Brombach, “was that while Amazon is taking measures to crack down on price-gouging on their site, it is very much still an issue.”
Laws around so-called price gouging vary by state in the US. In California, for instance, it is defined as price increases of more than 10 per cent on essential items during periods of emergency. The state deems “all sellers, including manufacturers, wholesalers, distributors and retailers” to be responsible for the practice.
On Amazon sellers are allowed to set their own prices, though the site gives added prominence to those with the lowest rates and fastest delivery estimates.
When US lockdowns were introduced in March, however, the company was criticised for failing to control soaring prices. Critics and consumers noted at the time that products such as hand sanitisers and masks were being marked up by more than 2,000 per cent.
Surge
In May, noting what it called a “nationwide surge in complaints about price gouging”, Amazon called for federal legislation to strengthen the anti-price gouging laws put in place by the majority of states.
The protective gear maker 3M, supported by Amazon, has sued several third-party sellers for charging “grossly inflated” prices for some of its products.
But while the most extreme increases may have been acted upon, PIRG’s study suggested that a large number of products had prices maintained at a significantly higher level longer-term.
Its report looked at 15 separate categories on the US marketplace, comparing the price on December 1st, 2019 to December 1st,020. It used data from Keepa, a service that tracks the millions of listings on Amazon.com and its international sites.
It found that 66 per cent of cloth face masks had their prices increased by more than 20 per cent, while almost 80 per cent of disinfectant wipes rose by 20 per cent or more.
Computer monitors saw some of the biggest rises in dollar terms – with 19 per cent of prices doubling in that period.
Most of the products that had been inflated were being sold by third-party sellers – independent companies who list their products on Amazon and use the company’s warehousing and delivery infrastructure. But, Ms Brombach said, one in seven products it surveyed were sold by Amazon itself.
“Amazon has blamed third-party sellers, for the most part, when it comes to price gouging,” she said. “And so I think it’s important to show that there were cases where Amazon was the supplier of these products that were seeing these massive price spikes.”
Conclusions
Amazon disputed the conclusions of the report. It argued the data neglected to compare its prices with those of competitors, such as Walmart, and did not take into account market pressures such as increased storage costs or supply chain constraints - all factors that might increase a product’s selling price. The company said that since PIRG refused to share the raw data on its study, it was unable to address the pricing of any specific product.
“We have a longstanding policy against price gouging, have processes in place to proactively block suspicious offers, and monitor our store 24/7 for violations,” Amazon said.
“In 2020 alone we blocked or removed over 39 million offers and suspended more than 13,000 selling accounts for attempted price gouging.
“We also referred the most egregious offenders to federal and state law enforcement, have worked with more than 40 state attorneys-general across the country to prosecute bad actors, and advocated for a federal price gouging standard.”
Retail industry analyst Neil Saunders said the PIRG report demonstrated there had been “some sharp price increases” across the board, but cautioned against assuming the rises were motivated by profiteering.
“A lot of retailers have increased prices this year on staple products,” he said. “Not so much because they’re actually price gouging, but just because they’re not really doing discounts and deals on things like toilet paper, for obvious reasons - they don’t need to, and they want to manage demand.” – Copyright The Financial Times Limited 2021
