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A bottle of Purell hand sanitizer is selling for 20 times the normal rate online.
GERMAPHOBE

What hand sanitizer shortages on Amazon reveal about global supply

Amrita Khalid
By Amrita Khalid

Tech reporter

From our Obsession

Big Tech

Looking at Big Tech as the next Big Oil.

Hand sanitizer has become a scarce commodity as Covid-19 circles the world.

A quick search on Amazon’s US site reveals that even the e-commerce giant is completely out of stock of the instant disinfectant, aside from a few third-party sellers. An 8-ounce bottle of Purell, which is normally $2.50 on the Amazon Fresh grocery delivery service, is being sold at nearly 20 times that rate by opportunists. 

And the shortage is not just online: Buyers who turned to Amazon’s main competitors, Walmart and Target, found the same. Unlike Amazon, a product ordered on Walmart or Target’s online portals can be shipped from the nearest brick-and-mortar store or a network of distribution centers and warehouses. Virtually every brand of hand sanitizer, from a 2-ounce grapefruit-scented spray by The Honest Company to Purell wipes, are unavailable for shipping on Target. On Walmart’s site, most options for both shipping and in-store pickup have been wiped out.

The fact that hand sanitizer is sold out on Amazon and third party sellers are raising their prices is an indicator of trouble, according to Glenn Richey, a professor in supply chain management at Auburn University. “Since Amazon provides access to products via their supply chain, as well as the supply chains of third party providers, we can expect that the third party suppliers are low on inventory and working to maximize their revenue before they are out of product and likely cut off from consistent resupply,” Richey wrote in an email to Quartz.

Once Amazon is sold out of an item, third-party sellers have no incentive to keep their price down in order to compete with the retailer. Both Amazon and Walmart, for their part, have made an effort to cut down on price-gouging related to Covid-19. But it appears to be a game of whack-a-mole for both companies, and those with a sharp eye can still find an expensive bottle of Purell or two up for sale.

Something selling out on Amazon is usually the first sign of a spike in demand that spreads to brick-and-mortar store fronts, according to Nick Vyas, executive director for the Center for Global Supply Chain Management at the University of Southern California. “The first place that you would go is Amazon. And after that you’ll start to scout around your local, second-tier, brick and mortar options,” he says.

True to form, both CVS and Walgreens reported last week (Feb. 28) that demand for hand sanitizers had spiked, and CVS even warned it could cause supply shortages. Users on social media are reporting shortages across the US, from big box stores like Costco and Sam’s Club to drugstore chains and grocery stores. 

A spokesperson for GOJO Industries, which manufactures Purell, confirmed that the company is seeing a substantial increase in demand. “We have experienced several demand surges in the past during other outbreaks,” wrote the representative, “and this is on the higher end of the spectrum but not unprecedented.” GOJO noted that it has significantly increased production in the wake of the epidemic, but didn’t specify how long it would take for the product to return to sold-out stores. 

Amazon’s inability to keep up with the demand is particularly worrisome. The ecommerce giant’s ability to tap into its vast network of fulfillment and distribution centers normally gives it an edge over physical storefronts. “Theoretically, Amazon should have a greater supply of goods versus local brick and mortar stores, given the absence of physical restraints, like the store’s square footage footprint,” said John Blackledge, a Cowen analyst who works on Amazon.

With such a sudden spike in sales—Adobe Analytics found that demand for hand sanitizer increased 14-fold from December to January—Richey doesn’t believe there was a way for retailers and suppliers to be ready. Once supplies have been depleted, Vyas estimates that it can take anywhere between four to six weeks for manufacturers to get products back in stores. 

But Germ-X shortages are no cause for panic, especially since doctors and public health officials say a superior alternative is good ol’ soap and water. Dr. Lance Price, a professor at George Washington University’s Milken Institute School of Public Health, recommends buying a bottle of 70% isopropyl alcohol as an alternative. After touching door knobs, elevators, handrails, or anything else, simply dump a bit of alcohol on your hands. Then, when you get home, wash your hands with soap and water. 

Dr. Juan Leon, from Emory University’s Rollins School of Public Health, said that limited literature suggests that Covid-19 is susceptible to alcohol, bleach, and other common disinfectants. 

And Price believes there’s no need to stock up on a large supply of hand sanitizer. In fact, by creating a shortage in your community, you may be putting yourself at greater risk. “During any of these epidemics, you want to be surrounded by people who are taking good precautions. If you’ve grabbed up all the hand sanitizer, leaving other people in your community more vulnerable to Covid-19, then you could find yourself surrounded by sick people,” said Price.

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