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.

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.