Sources: Etsy/EraBoutiqueStore; Etsy/GoofysCloset
Is it okay to profit from a pandemic?
With fashionable masks and coronavirus-themed t-shirts hitting the market, exactly what merchandise is appropriate to sell amid a pandemic is up for debate. A first question, however, appears to be whether businesses can currently be seen making a profit.
Opportunists rushing out to buy sanitizer, face masks and wipes to sell online at exorbitant prices were embarrassed and saw their listings pulled by Amazon.com.
But what about the sales racked up by grocers amid the hoarding? To some, donations by Kroger, Publix, Walmart and other food sellers that have gone to supporting pandemic-related relief efforts have shielded them from perceptions that they are unduly profiting.
Scores of firms with manufacturing capabilities have shifted production to make face masks and other PPE as donations to hospitals.
Yet with masks recommended for all Americans and likely necessary for more than a year, others see opportunity. According to a blog entry from Etsy, the number of face mask sellers on the artisan marketplace had increased five-fold in the two weeks through Apr. 7, to nearly 20,000 sellers.
Some are wondering whether a fashionable mask trend will eventually hit the sites and then floors of Nordstrom, Urban Outfitters and other apparel sellers. Vanessa Friedman, writing for The New York Times, posits that, assuming this scenario happens, “It is hard to avoid the nagging sense that designers are exploiting fear born during a pandemic for their own ends (and profit) and that consumers are using what is a medical necessity, one that is the most visible representation of the pain and isolation currently shared by so many, in a decorative way.”
Etsy in early March took down thousands of coronavirus-themed t-shirts and mugs with inspirational or comical sayings that it felt exploited the crisis. But scores of t-shirts with comical phrases — such as “Got TP?”, “If You Can Read This You Are Too Close” and “Pour Me A Quarantini” — can be found on Amazon, eBay and other sites.
A Wall Street Journal article exploring whether coronavirus t-shirts were “Funny or Offensive” detailed a tendency to memorialize crisis events in the past and the extent to which laughter can act as a coping mechanism.
- 4.7.20 Update: Mobilizing our Community in Times of Need – Etsy
- Should Masks Be a Fashion Statement? – The New York Times
- Coronavirus T-shirts: Funny or Offensive? – The Wall Street Journal
- Mask sales are suddenly a hot business for home businesses – Pittsburgh Post-Gazette
- Pandemics don’t stop fast fashion: Brands sell face masks during crisis – Targum
- Publix launches initiative to help farmers, feed those in need during pandemic – Publix
- Publix Super Markets Charities donates another $1 million to Feeding America member food banks – Publix
- Denver creatives, home entrepreneurs take on a new role: mask producers – The Denver Post
Discussion Questions
DISCUSSION QUESTIONS: Do companies face an ethical dilemma making a profit and chasing sales during crisis times? Are fashionable face masks, coronavirus-themed t-shirts, et al a merchandising opportunity that has more upside or downside for retailers?
Poll
BrainTrust
Liz Adamson
VP of Advertising | Buy Box Experts
Suresh Chaganti
Consulting Partner, TCS
Overt gouging is reprehensible and wrong; providing products and making a profit is perfectly fine. Retailers and brands need to survive, and so anything that they can do to generate revenue and keep their employees employed is fair and reasonable. However, retailers need to be very careful in how they position and sell their goods, and if anything they do is perceived as gouging or taking advantage of this crisis they will be severely punished by consumers.
There is nothing wrong with making a profit. Indeed, without profit there would be no progress: no investment, no staff salary increases, no expansion.
How that profit is made is everything. Making it by price gouging is a no. Making it through selling tasteless products is probably a no-go for most retailers as it will damage their brands. Making it through the blatant exploitation of others is a clear red line.
Retailers and others have every right to make a profit both now and as this crisis unfolds. They just need to be sensitive as to how they go about it. And they need to balance profit and giving back to the communities in which they serve.
Gouging is bad – but profits are not a bad thing. People want fashionable masks? Sell them at a fair price. Nobody should be expecting giveaways. And to those who desperately need food – it’s being given away as an act of charity, not because you are owed it. Be grateful.
There is a fine line between good business and greed. Supermarkets are no doubt doing well, but they are a necessary business while there have been several attempts by independent retailers to make a profit by jacking up prices of products in need. I have less of a problem with companies selling T-shirts and hats with humor because I feel that fun is always a great way to help deal with any problematic situation. I do have an issue with the thousands of consumers who have hoarded toilet paper, paper towels, and sanitizer making it difficult for others to purchase those products and allowing the scammers to come up with ways to make a buck playing upon people’s emotions and being desperate. Unfortunately, there is very little we can do. Luckily, stores have gotten smart and are limiting the number of purchases. Amazon has been outstanding in banning companies from selling products at incredibly high prices, and the general public has gotten wise to the numerous scams out there. So hopefully, the greed is behind us. It really is a shame how some people have no conscience and can easily take advantage of others no matter how bad the situation is to make a buck.
Businesses can overcharge for a “fashionable” or “designer” mask because nobody really needs one. But they should not overcharge for a plain blue and white one. That is immoral. Few would mind if electronics geeks had to overpay for the newest gadget in high demand, but overcharging for basic food when so many find themselves out of work is also immoral.
There is a difference between making a profit and gouging the customer. If the product is priced as normal, there is no ethical issue. However, the retailer can decide to drop the price to help its customers. Nobody ever complained about that!
Price gouging is a no – I still don’t understand why people hoarded toilet paper.
As far as masks – I made mention of this in another post last week. Not only does producing masks provide a source of income for small apparel and specialty businesses and keep people working, it provides options for those that now have to wear masks out in public or for work. Nothing wrong with that.
Reasonable profits with an effort to support communities and customers = good. Exorbitant pricing in the face of a disaster = bad. Being creative making fashionable masks and t-shirts = good capitalism. As long as these creative entrepreneurs do this in a tasteful way, they are answering the needs/wants of the consumer. We will see a lot of this in the weeks and months to come. Businesses must monitor this, but in the end businesses need to answer to the wants of their customers.
Price gouging or profiteering during a crisis is unacceptable. Creating and selling products at reasonable prices to meet increasing demand is perfectly reasonable. And I do appreciate that there are growing options for items like face masks. Why wear a plain black one if there is another design that fits your personality and style? If we are in this for the long haul, I appreciate designers and manufacturers who will help us adapt to our new normal with products that can bring some joy, and even humor, into our lives.
Profit isn’t a bad word. Gouging is. The price of a thing is what it will bring — so if someone wants to spend $200 on a fashionable/branded mask then it’s their choice. People have spent thousands on a simple designer handbag that does no more than a plastic bag does.
It’s a very transparent world. So as we’ve seen and retailers have all learned, when you step outside the lines you get called on it quickly.
I hope the fashionable mask trend does hit Nordstrom. I would trust them and I’d buy them and they wouldn’t look like a surgeon’s mask. I wouldn’t consider it price gouging if it had a design. It’s the difference between buying generic flour and King Arthur — if you can find it.
Markets present opportunities in both good times and bad. Retailers and entrepreneurs rush in with both good intentions and bad. And the market usually has a way of sorting them out. Hoarding and reselling at exorbitant prices is despicable behavior, and any brand or individual with even a scintilla of a conscience won’t partake in that kind of behavior. There’s nothing wrong per se with fashionable face masks or themed t-shirts when executed with conscience, an appropriate sense of humor, and a market challenged rate of profit. But may gougers and exploiters face every ounce of revulsion and rejection they deserve.
There is a big difference between making a reasonable profit by responding to new demands with products that consumers want and selling products in high demand at excessively high prices (price gouging). Making a reasonable profit and providing products that customers want is fine, but price gouging is unethical. The COVID-19 pandemic is likely to be around for quite some time and some, maybe many, consumers will want fashionable face masks to make them feel better and show their personality. Amazon and other marketplaces have shut down sellers that have been price gouging and hopefully not many consumers will get taken advantage of by unethical sellers.
The reality is that price gouging exists and is reprehensible on so many levels. The good will that companies extend now in the form of social responsibility and ethically transparent practices, along with reasonable pricing policies, will be remembered when we are in a post-COVID-19 pandemic period.
Retailers and brands have shifted their supply chains to manufacture products that are otherwise not readily available. However perception is everything, and consumers have quickly gravitated from brands if they set the pricing bar too high, or are taking advantage of the situation. This pandemic is also an opportunity for consumers to support community-based brands that depend on our support for their survival.
The law is clear on what gouging is, and consumers are smart when they see someone doing it. Masks in particular have become mainstream, and inevitably will become a fashion statement. Cloth masks are NOT PPE. Probably no one wears a proper PPE mask in a public setting. Cloth masks on the other hand are meant to protect others if you are an asymptomatic carrier. Every one can make one at home. We are seeing good/better/best masks, along with a few luxury ones thrown in. There are inevitable market forces at work.
My daughter is making very stylish masks but is giving them away to friends and family and anyone else that may need one. This is something that individuals can and should do on a family-by-family basis. It shows our American spirit while allowing us to show our individuality. Companies that can mass produce them should be doing that for medical and frontline workers and they should be doing it on a pro-bono basis as much as possible. Companies that are profiting from this and not giving away at least half of what they make should be frowned upon.
It would be more palatable if those retailers donated a portion of the profits. Then it would be better.
I still really resent the “hoarding” notion. When all I can find is 24-roll packs of toilet paper when in the ordinary course of events, I wouldn’t buy more than a 12-pack at a time, am I hoarding, or are the manufacturers not giving me the right choices?
It seems like we are all in agreement. There is a big difference between profiting and profiteering.
I don’t know how Etsy made their choices of what to take down from the platform regarding tee shirts, mugs, etc. But we need creativity, smiles and even some laughter in this time. If creative products can give us that, terrific.
Pour me a Quarantini!
I think the more appropriate question will be not “is it OK to profit?” but “what should companies do with those profits?” There has been a trend over the last three decades of the majority of profits going to either execs or shareholders through dividends and share buybacks. With the amount of collaborative effort globally to stop the negative consequences of mass unemployment, I would hope those making those profits return them through greater investment and better pay to those who have helped them achieve these profits.
Simply stated: profit good, gouging very bad. Profit is necessary to be able to pay wages that people need for the necessities of life. Gouging is taking advantage of the situation for personal gain.
This one is tricky — because lives are being lost. But I think the market has to be the ultimate judge of what crosses the line between fair profiting and carpetbagging. Large companies that easily can provide life-saving services and products should do so gratis as good corporate citizenship. Smaller companies that are seeking to serve a need at a fair profit should be allowed to do that because we are a capitalist economy and need the stimulus. The good new is our retail marketplace (thanks to social media) has never been more transparent and robber barons will quickly wilt and die in the sunlight. We have to depend on that.
Like so many others have said, profiting as you were before the crisis is acceptable. Gouging is never acceptable and has to be stopped where possible.
Predatory pricing is never acceptable. However, we also cannot expect for-profit companies to continue to “give away the farm.” Reasonably priced merchandise that capitalizes on a current event, even a tragedy, is all about supply and demand. If the shopper doesn’t believe in the product for whatever reasons, they should not buy it.
Price gouging is a problem and should be punished. However, making and selling products that consumers are willing to buy is not unethical or improper. It takes a willing buyer to purchase an item, and then the free market is working as it is supposed to do.
Some consumers like to mark major events with T-shirts or in this case fashion facemasks, and those people will buy whatever they desire to mark the event. However, I think this will be a short term trend. Sellers should be aware that the demand for products marking the COVID-19 virus will not last long.
I’ll comment specifically about the plethora of cloth masks being produced for both donation and for profit. As an executive for an apparel company and as a board member of an actual protective mask company, I can see the lure of jumping into the surging demand for cloth masks.
Due the inexpensive cost of producing basic cloth masks, my apparel company chose to produce and give away over 30,000 masks, one set of 4 assorted cotton masks for only the $4 cost of shipping. We do not fault many small makers/brands for selling their similar masks for $8 to $25, because this is the only income they are making while everything is shut down for them. It is possible that later, if mask-wearing becomes mainstream in America, that we might produce a well-made mask that coordinates with our apparel, but only if customer demand warrants it, and we’d sell it at our normal apparel margins — no gouging. I can see some fashion and luxury brands successfully selling masks as fashion accessories as well — no different from a scarf or a hat used to fashionably shield the wearer from the elements.
The protective mask company chose not to engage in cloth mask production because we are focused on protection for the wearer, and cloth masks only protect others from wearer, with little to no protection for the wearer. As a startup ourselves, we again support small companies who are profiting from cloth mask sales as it is a real consumer need, they deserve a fair profit, and it is likely their only income.
In the end, I would echo many voices here stating that a fair profit is reasonable for the selling of masks, other PPEs, and any Covid-related consumer demand products. Gouging is not, and luckily gougers are easily identified and crushed by the transparency of social media.
I doubt any of us would question selling mourning attire, or claim doing so is “profiting from” suffering. Etsy’s approach strikes me as a bit prudish. (For those who clamor that companies should try to be “moral” this may be the exception to prove the rule). People find humor in the shared experience of absurdity, and it sounds like most of these items are simply answering that need. (Honestly this post isn’t at all about what I thought it would be — actual profiteering.)
Price gouging is never acceptable, hence why it is illegal. Still, within bounds, some supply-and-demand economics must be permitted to incentivize retailers and manufacturers to shift production lines to meet consumer needs. Focusing on categories that are in need is wise from a broader economic standpoint: profits allow companies to pay employees, grow, and create more jobs in the future.
Of course, meeting needs doesn’t always have to be for-profit. Take luxury fashion group LVMH, whose Maisons have been producing, distributing, and donating basic PPE to hospitals, essential workers, and the general public.
I’ll take the very unpopular position that not only are profits good during a pandemic, but that price gouging isn’t the terrible thing it’s been made out to be. In fact, so-called gouging is actually beneficial because it helps conserve scarce resources.
Look at what happened with toilet paper, hand sanitizer, etc. because prices were kept artificially low relative to demand. A few scoop up and hoard the limited supplies and others are forced to go without. “Gouging” would have regulated the supply, and while prices may have spiked initially, they would have settled down and reached an equilibrium allowing many more people to have access to these items. Forcing manufacturers and retailers to keep prices low guarantees there will be shortages.
You can’t suspend the laws of supply and demand, or rather, when you attempt to do so through price controls you end up with the current situation where you still can’t find Lysol and many other necessities on store shelves. So allowing people to profit — especially during an emergency — is a requirement.
Rich, it’s not that your position is unpopular, it just doesn’t hold-up under these extraordinary circumstances.
If retailers charged whatever they wanted for essential goods – even to the point of “gouging” – not only would people who hoard continue to do so, but hoarding would likely accelerate as non-hoarders react to the dramatically higher prices. Meanwhile, those consumers with less means would be forced to make even more inhumane trade-off’s – food/medication or toilet paper/sanitizer?
I’m not making a moral judgement here, but your argument for allowing the laws of supply and demand to mitigate supply shortages of essential goods during a world-wide pandemic would likely exacerbate the shortages. Furthermore, when you consider the broader implications of what you’re suggesting, including the long-term (and likely permanent) damage to the retailers’ brand/customer loyalty, and the real potential for social unrest and chaos that would ensue from depriving people of essential goods, it’s hard to see how dramatically increasing prices could produce a desirable outcome.
I believe in the laws of supply/demand and if we were talking about Cabbage Patch dolls, I would agree with you 100% – but that’s not what this is. Not even close.
Thanks for the thoughtful reply, though obviously I disagree. In fact a company can’t charge whatever they want for a product because people wouldn’t buy it. There are prices that no one will pay for a product and a company would go bankrupt if it insisted it continue charging those inflated levels. The consumer is king because he determines what a “fair” price is, even in a pandemic.
And I disagree on price gouging causing more shortages. Rather, the outsized profit potential would actually draw in more manufacturers, which would end up increasing the supply and drive down the price again.
Yet the reputational risk you cite would also keep most companies from charging excessively high prices in the first place because of the bad optics of it and they would fear ruining their good name.
What we do know, and what happens time and again every time price controls are imposed, is that we do end up with shortages because people hoard wanting to get it while they can before their neighbor does. Cheers.
Yes, it is OK to profit from a pandemic. In fact, one would argue that since many businesses have other channels of revenue cut off during the pandemic, that profiting from the pandemic is more than reasonable and has no ethical boundaries at all. There are thousands of T-Shirts with off-kilter messages on them … what is wrong with one about the pandemic? Why shouldn’t you engage in a more risky type of business than your traditional business if it could offer profits in the end? The consumer is the one who determines all of this with their dollar “votes” in our capitalistic marketplace. Let the consumer decide!
Consumer demands are shifting. If there’s a chance for retailers to supply that demand in order to succeed in the evolving market, then they should seize it. Yet, companies should profit by providing value to their customers. They should balance profit made with brand image and ROI. Only then can this sales-chase be considered ethical.