Companies tend to gain more profits by making good use of current clients. For instance, during the COVID-19 period, many shoppers have issued complaints about massive price hikes on sanitizers and face masks. The company is aware that customers are in a rush to stock most of its supplies for the corona pandemic. Ideally, it is reported that customers still complained even though specific products were being banned. Logically, the complaints are because companies strive to make full use of the situation. Since customers are in the rush of the products, Facebook and Craigslist raised the prices of hand sanitizers ("403 Forbidden"). Companies seek not to cut back on marketing as another means of gaining profits. During this corona pandemic, eBay and Walmart monitor the pricing of high-demand items. Walmart unpublished commodities which are substantially priced at extra prices on competing sides or Walmart marketplace, which seem to price gouging subject. The company strives to keep credit in good shape to earn more profit based on the situation. By doing so, companies stand a better chance to borrows money to keep them afloat. For instance, the companies' officials from Craigslist, Facebook, eBay, Walmart, and Amazon create prices that detect surges, which is one of the effective means of gaining profit.
Government Punish Offenders
In the United States, the state government and Amazon are working in tandem on punishing sellers who have engaged in price gouging on face masks and sanitizers. The state government and Amazon worked on prosecuting worst offenders during the COVID-19 pandemic. The government should monitor the site to enforce a policy to ensure thousands of high-priced products are brought down. Also, accounts of the companies that malicious engages in raising prices for hand sanitizers and face masks should be suspended.
What Is Wrong When Prices Are High
In most instances, if the prices are unregulated, market prices being legal and visible to stimulate the high inflow of supplies as compared to black-market places. Although the prices are unpopular and unpleasant, they are not the main problem in market places. However, a problem arises when the demand increases faster as compared to supply. If the prices are raised, a temporary pain is created while expecting more from the suppliers.
In essence, everything that comes along with the increasing price is a vital concept than the price itself. If a new price is framed in the market place, people will have to pay for it without any question (Cvetanovski 132). However, if the prices are wrongly stated, customers begin to complain and baulk. If the products have limited quantities, the law of demand and supply will remain the same. Such that, when there is high demand, it implies that people will be eager to pay for the product. However, not everyone will mind the products. If there is too much demand, the producer expects few customers to take advantage of what the company offers.
Ethically, pricing is one of the key concepts that businesses must decide. Companies that use ethical principles and strategies to sell their items and earn profits are more respected as compared to those who defraud and hurt consumers and competitors (Cvetanovski 133). People believe that marketing strategies should not infringe on values such as autonomy, transparency, and honesty. At market places, producers have an added advantage of controlling their processes and products. By doing so, unethical practices are likely to occur, which are considered harmful to society.
"403 Forbidden." Reason.com - Free Minds and Free Markets. Reason.com is the Leading Libertarian Magazine and Video Website Covering News, Politics, Culture, and More with Reporting and Analysis, 16 Mar. 2020, reason.com/2020/03/16/price-gouging-laws-will-do-more-harm-than-good-during-the-coronavirus-pandemic/.
Cvetanovski, Goran. "How to leverage pricing conferences to develop a network and help your career." Pricing and Human Capital, 2015, pp. 131-137.
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