What is Price Gouging?
Price gouging occurs when a seller increases the prices of goods, services or commodities to a level much higher than is considered reasonable or fair. Usually, this event occurs after a demand or supply shock. Common examples include price increases of basic necessities after natural disasters. In precise, legal usage, it is the name of a crime that applies in some jurisdictions of the United States during civil emergencies. In less precise usage, it can refer either to prices obtained by practices inconsistent with a competitive free market or to windfall profits. Price gouging may be considered exploitative and unethical. (https://en.wikipedia.org/wiki/Price_gouging)
Why we are talking about it?
In the current events happening with the COVID-19, we are aware that multiple ecommerces were created in the goal of practicing price gouging, and selling single masks up to 300$ each. Some other suppliers that were apparently mentionned from different medias to conduct price gouging includes Aliexpress.com, and Amazon, that has since then close all the accounts accused of doing so. Given our core values, we think it is important that you, as clients, understand what we are doing in order to avoid price gouging, and to make sure that you understand how we set our prices.
A challenge we’ve faced is supplier’s price gouging. We were able to overcome these leveraging our strong network of reliable suppliers, but we still saw some significant price increase from the suppliers directly.
What 95masks.com is doing about it?
We decided to apply a static, profit margin rules to all of our products. This means that in no situation we will make more than 50% gross profits on our orders. This gross profit help pays for Opex, marketing, sales, and other expenses not directly associated with the Cost of Goods Sold.
Most expensive products also have a reduced profit margin of around 30%, and wholesale generally tend to be around 5% to 10%.
For greater certainty, here is a calculation of how our prices are determined:
We buy Mask A for 1$, we add 1$ for profit, we sell Mask A for 2$. The 1$ profit then services to pay expenses we have to proceed with to do business, and then value to shareholders.
We proudly provide transparency so our customers understand how our prices are determined.
But how your prices compare to others?
The best way to avoid price gouging is generally to compare the offered pricing with major brands.
For that exercise, we decided to do head-to-head comparison with Uline, a 6B$ company, and Global Industrial, a 600M$ company. Here are the results of our two most popular products head-to-head with their products:
As you can see, the conclusion shows that in most cases, the pricing offered on 95masks.com are better pricing than the ones offered by Uline or Global Industrial.
We are dedicated to continuously fight price gouging, and to provide transparency on how are prices are determined, along with comparison on the market. In addition to this level of transparency we believe is a must in the current outbreak, we have instored a Best Pricing Policy that offers consumers the option to get the best price possible on our website.