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| By Zachary Ducharme, MBA CEO at Pipeline Medical |
Buying PPE? Beware Fraudsters, Cheats, & Parking Lot Price Gougers
Personal protective equipment or PPE is a hot commodity. Demand has skyrocketed way beyond the current supply. It’s a world’s race to obtain products to protect workers and citizens across the globe.
As a medical supply company for 13 years, we’re seasoned at spotting fraud, cheaters, and fake products. Never have we seen a market so full of suspicious products and people vying to cheat you out of money and time.
Why are there so many N95 Counterfeits
On Feb 18, 2021, CNBC reported that more than 11 million counterfeit 3M N95 masks have been seized in the recent weeks.
Even though the CDC has requested that N95 masks be reserved for frontline workers, they have become the norm for everyday usage. And this gives fraudsters even more of a reason to create fakes.
Also, in Feb 2021, several state and city governments, like the NYC Health Department is recommending that New Yorkers wear two masks—a paper one covered by a cloth one—to better stem the spread of the coronavirus, as reported by the West Side Rag. “Visitors to Manhattan federal court and other buildings in the Southern District of New York are now required to either wear two face masks or an FDA-approved N95 mask,” wrote the New York Post.
So if you’re buying an N95 make sure you check all the markings. One of the best selling ones that we have currently are the NIOSH approved Venus N95 masks. Their NIOSH ratings came in higher than the leading brands in the marketplace today.
Buyer Beware
There are many challenges when navigating the PPE world and its deals.
- Who to trust?
- Which deal to pursue?
- What product to focus on?
- The location of the products?
Use Common Sense
However, the biggest challenge I have been experiencing from many buyers and brokers are their internal battles: common sense. This is often the first thing that buyers forget when engaging in PPE transactions. Just take a second to think about the offering. Here are some of my favorite:
Gloves: 50 Million boxes, or 5 billion, gloves on the ground in the USA (OTG)
Why this doesn’t make sense:
- You would need approximately 1,500 shipping containers and trucks to move this many gloves from point A to point B
- 200 747 Freight Airplanes (like the one above) are required to transport this product
- Unless you have an Amazon size warehousing space, you’re not storing this product in a single location
- Why would anyone have 50 million boxes without selling it, and magically you are the person to find this.
1 Billion 3M 1860 n95 masks (OTG)
Why this doesn’t make sense:
- Global annual production for this mask is around 2-4 billion currently.
- This is approximate 208,000 pallets
- 10,000 40’ containers to transport these masks
- 2.8 million square feet of warehouse space
- It does not make logical sense that anyone would have 1 Billion 1860
100 million canisters of EPA alcohol wipes
Why this doesn’t make sense:
- These are considered a dangerous good (DG) products. Unless you know what you’re doing transporting these products is a challenge.
- It would take 1,666 containers to move this product.
- EPA is a unique certification that companies can obtain. Unless you’re buying a brand (ie Clorox), or the importer knows how to get an EPA registration (hello Pipeline Medical), they’re not EPA.
- Do you really think there are 100M Clorox wipes laying around in some back alley warehouse?
20 million boxes (2B gloves) in 4 weeks with pricing staying consistent.
Why this doesn’t make sense:
- 20M boxes (2B gloves) is 500-600 containers of gloves.
- A fast boat takes 15-17 days to sail from Vietnam to California.
- Customs clearance is a minimum 3-4 days
- Transporting from factory takes 4-6 days
- The current line outside Vietnam factories is 4 km long, 200 trucks waiting to be filled, waiting 2 days to get into the factory gate.
- Contract signing and payment transfer takes 3 days
Using this ideal scenario, this would take 25 days, but does not account for any production time. This also assumes all 500-600 containers can be filled and be placed on the same boat, or boats that leave within 1-2 days from clearing customs and have room for the cargo. Everything would have to be perfect which we know never happens with bringing products from overseas. The current climate overseas is nothing close to perfect, notwithstanding COVID-19, here is what the landscape looks like: labor strikes, criminal activities, fights inside factories for allocation, outbidding on products produced and sold, flights being canceled and rescheduled, government and countries outbidding each other. People often forget to think through the logistical challenges or supply chain issues, of getting such large quantities. They quickly get lost with dollar signs in their eyes, and visions of their new yacht in the Riviera. Don’t get pulled in and make decisions based on these fantasies. Take some time to think through the deal at hand. Does it make sense?
Counterfeit & Falsifying Documents
There are lots of fake products on the market. When any product becomes popular and demands a premium price, counterfeiters get excited to try and make a few bucks. PPE is following the path of the knock-off Louis Vuitton bags found on Canal Street in New York City. It first started with 3M masks. Everyone wanted 3M 1860 masks, but very few people actually obtained them, since the large quantities just didn’t exist. In March word got around that a large quantity was available and real. The buyer went through the transaction process and saw the product. Everything checked out. The last stage of the transaction required product verification from an outside company. The certifying agency inspected these products and deemed these fake. Since the 1860 masks rage all masks are being knocked off or falsified. When China and the USA changed their import/export regulations the premanufactured masks in China had to “adapt” for export. Millions of masks were quickly unpackaged and repackaged in “legal” packaging. Today, gloves are the new counterfeit product of choice. Vietnam factories have recently been accused of falsifying the thickness of gloves and selling products that were originally rejected from quality control. So you still want to buy PPE…How can you avoid this? Simple: Cut through the broker chain and buy as close to the source as possible. Know where your money is going. Understand who is buying the product, from where, and how the transaction is happening. You need to fully trust the importer since they’ll be verifying the product and its legitimacy. Don’t be shy, get all information you need to feel comfortable.
Skyrocketing Demand for 3 Ply Masks
The demand for 3 ply masks has soared in 2021. Along with it the market for fake 3 ply masks has also about to hit 2020 levels. The mask, which previously sold for half a penny, is now up to 4 cents a piece. This may not seem like much of a difference, but with volume sales, this change has a great impact on the medical supply chain.
How to know if your 3 Ply Mask is Fake or Real
When buying PPE it’s best to obtain it from a trusted source. There are a few ways you can test a mask, but we’ll suggest the simplest.
What you’ll need: a lighter or a lit candle and the 3 ply mask you’re testing.
Wearing the mask, if you’re able to blow on it and successfully extinguish the candle or lighter flame, your mask does not work. It is a fake.
If after all your huffing and puffing the candle or stays as is, you’ve got yourself the real deal.
