To many it might seem, that the year 2020 has so far been a state of one crisis after the other. Arguably, the one that has affected the most people is the COVID-19 pandemic. Claiming over 22,000 lives worldwide so far, and with the numbers expected to rise, the virus has had a visible effect on life in even the most wealthy and stable countries. The British public has certainly seen it, as shops and workplaces close, in the need to self-isolate and in the shortage of some everyday products. Whatever we call it, panic-buying or preparation, some products like hand sanitisers, safety masks, toilet paper and others, have almost disappeared off the shop shelves. Because of that fact, many have started to look for the products they need online. It has come as a massive shock to some, that even though they are available, a lot of online shops have sky-rocketed the prices on some of the most needed items. Many people view this to be first of all ridiculous, but also unfair and unethical, as everyone from retailers to raw material suppliers try to capitalise on human tragedy. How and why is that allowed to happen? Can we do anything about it, both now and in the future? Let’s answer these questions.
First of all – How? How has the Coronavirus pandemic made it possible, for the prices of usually cheap products to get so high? The answer lies somewhere in the whole process, which starts from even before the production of the item in question to the actual selling of the product to consumers. First, let’s see how the things we buy in shops come to be on the shelves on the example of a hand sanitiser gel. I know that this explanation is a bit of a simplification, but please bear with me. To make a hand sanitiser gel, we need raw products such as some kind of alcohol (the actual ingredient that kills viruses and bacteria), gelling agent (which causes the product to be gel-like and not run as much) and fragrances (for smell). Depending on the manufacturer the list of ingredients might be bigger, but these are the basics. These ingredients are sold to manufacturers in the step 1 of the process, by people called raw material suppliers. They sell the ingredients for the final product. These are then combined in factories run by manufacturers, into the actual hand sanitiser, step 2. But the journey of the product doesn’t end there. First, it needs to get to the shops. The people that make that possible, are the suppliers, step 3. Once the product is in the shop (whether real-life or online), the owners, or the retailers, sell it to us in the final step, step 4. This is a normal process, and usually it works fairly for all. At each step, these guys, raw material suppliers, manufacturers, suppliers and retailers sell the product at a slightly higher price than they got it for, making profit, which makes business run smoothly, gets the workers paid and causes the demand for products to be met.
The problem arises, in a time such as the COVID-19 pandemic. When a product is in a very high demand, but is also a massive necessity and comes to be in short supply, either of the guys mentioned above might see this as a good opportunity to make even more profit than usual. They decide that since someone somewhere is going to buy the product anyway, even if its far more expensive than usual, they’ll sell the product not for a slightly higher, but at a much higher price. Whichever step this happens at, and whichever of these four guys is getting much higher profits, the chain reaction always ends the same way for consumers. They will see a massive increase in price of the item. and although it might be too expensive for some of them, out of need, some out there might finally be forced to buy it. And so, the supply chain is satisfied, and can keep the prices high, profiting from the unusually high demand.
Also, to mention a very important point, airport closures around the world and limiting flights have hiked up prices due to not supplying to the demand. This has been ignored by the public as it’s capitalisation of a large scale in a covert part of the product chain. Those able to increase prices have done so, carnage on flights, shipping port and so on. This has resulted in limited availability of raw materials, thus, even more price increases and the end result always means the general consumer always pays the extra.
So why is this sort of action from the traders not right? First of all, most people consider such behaviour to be unethical. The rising demand in the supply of the product is caused by a serious danger to the health of all, causing a widespread shortage and crisis. The lack of access to, or being unable to afford some of these products, can put people in a greater danger of getting ill with a disease like COVID-19. And even if able to afford it at a higher price, most people consider it not right, that a product that can help keep you safe and healthy, should cost unusually much, and effectively rip people off in times of need.
Second, this sort of combination in short supply and in a price rise, can aid in creating a bidding culture between people. What does that mean? Simply put, products that are both necessary and hard to come by, might no longer be available at a set price, and might only be sold to people who are willing to give more than others, often in auctions. And, as far as auctions don’t have to be a bad thing when it comes to trading in things that are not a necessity, if this was to extend to, and become a norm in buying and selling things that are of everyday use, and are essential to life or well-being, this could in turn become a massive problem. It would allow for the prices to rise and rise with almost no limit, causing less wealthy people to become poorer and with a bigger chance to become unwell, while letting the wealthier people in society to become even richer, possibly profiting from the entire situation. Since the poor could not afford the products, or would have to pay prices that they could barely scrape up, while competing with the rich, who in turn competing with each other, would cause the prices of product in demand to rise even higher and higher. A never ending circle.
It might be funny to think, that this sort of thing could happen because of hand sanitiser or toilet paper. And you’re probably right. But now think that it could happen with food or the most basic clothes, medicines or other essentials. Now that would be a problem, right?
So, what can you and I do to stop that from happening? Living in the 21st Century we have one the most powerful tools available to people, right there in our hands. It is the internet and social media. Living in a time when more and more companies are moving their business online, and when anybody can have a platform to be heard on the web, this can be a great way to make an impact. How? One of the ways to do it is, if you notice that a shop, whether online or not, has unfairly increased its price – publicly name and shame it. Do it via social media, tell your friends, write a blog. Do not buy anything from the shop. If enough people do it, it might force the retailer to lower the price to a fair point, or, if the price rise didn’t come from them, it might cause them to pressure the ones in the chain of supply to stop raising their prices in an unethical way, again making way for the product to come back to it’s usual, fair price. Does this work? Yes! In fact a lot of shops and even some of the world’s biggest online trading platforms, like eBay and Amazon, have put in work to regulate prices, and to stop traders from capitalising off of human tragedy!
We aren’t sure what will happen in the future. We can be sure though, that in time, things will probably happen that will affect the whole world again, just like the Coronavirus has. Even now, experts are already predicting that it’s probable that an economic crisis might hit the world, as an aftermath of the COVID-19 pandemic. Happily lessons can, and are being learned from what is already happening. Everyone can learn for the profiteering we have seen. Both governments and normal people can be better equipped to know what to do in such difficult times. UK politics are impacted as the government is forced to readjust its policies. Politicians are learning to better legislate trade and commerce, including online, in order to make it fairer for all The people are gaining experience on how to prepare and how to react if a crisis strikes. That includes learning how to put pressure on companies and businesses to act in a more ethical way during times of hardship. It can teach us to react and strive for our rights. And if a next big crisis should come sometime in the future, we can all learn how to work together and look after each other, in order to overcome it fairly and safely.
