What Zentail’s data shows about pandemic price gouging on Amazon - Technical.ly DC

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Apr. 3, 2020 3:12 pm

What Zentail’s data shows about pandemic price gouging on Amazon

The Columbia company looked at price spikes for essential items over the last month.
Amazon.

Amazon.

(Photo by Flickr user Mike Seyfang, used under a Creative Commons license)

Even as ecommece remains a relied-upon source for essential items, there’s a lot of change happening in the world of buying and selling over the internet.

The team at Zentail, a Columbia, Maryland-based ecommerce automation platform, is watching closely, and digging into data behind the effort.

About a week ago (it feels like a year ago tbh), a post from Paul Capriolo, the company’s director of growth, that took a look at price gouging caught our eye. After all, needed items are in high demand, so it’s important to raise awareness if folks are taking advantage of that. As other reports have spotlighted, prices were going up on items like toilet paper, hand sanitizers, safety masks, safety gloves and cough medications as the coronavirus across the U.S.

Zentail looked into the data on per-unit costs of these items, and found a spike in pricing on these goods, peaking around March 8.

“We have definitely seen more significant price increases now during the coronavirus pandemic as compared to pre-pandemic timeframes,” Zentail Director of Marketing Pauline Shiu told Technical.ly. “While it makes sense in line with general ‘supply and demand’ practice, what’s alarming is that the normal practice of ‘competitive pricing’ went out the window quickly across the seller community. Normally it’s a race to the bottom in terms of pricing, rather than the reverse.”

Typically, price increases are in the range of a couple percentage points. At the peak, Zentail’s analysis showed an increase of 250% for essential products.

“To see 50%, 100% and even higher price increases definitely lends itself to price gouging,” Shiu said.

Amazon took action on March 11 by restricting essential categories, and aggressively enforcing fair pricing policies. The next week, Zentail’s data showed a major dip in average unit price around that time. By last week, Amazon said it had also made the move to suspend nearly 4,000 sellers and pledged to continue use “both automated and manual means and aggressively removing bad actors and offers.” The ecommerce company also removed half a million product offers that looked to be overpriced.

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How about trends they’re seeing overall?

“Every day, every announcement, every minute, things are changing in the ecommerce industry,” Shiu said.

That’s come with ups and downs.

“Across different categories we’re seeing historic spikes in sales that are met with unprecedented lows in other categories,” Shiu said. “Team Zentail is working overtime to support our cross-categorical network of ecommerce and marketplace sellers, experiencing both the good and bad right now. For our current clients, our commitment remains to strengthening their business.”

They’re setting up sellers with new fulfillment and sales channels, and to improving marketplace listings.

“And as new policies or mandates roll out, we’ll continue to adapt to their needs to get through this together,” she said. “After all, flexibility and resiliency are the name of the game these days.”

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