As you no doubt have learned disposable gloves have become a precious commodity in recent months. Demand currently far outweighs supply in the category of disposable gloves. Why is there such a shortage and why are the prices escalating at a breakneck pace? First you have to understand the basics of how disposable gloves are made and what has contributed to this unprecedented increase.
THE PERFECT STORM
The vast majority of latex, nitrile and vinyl gloves are produced in Asian countries (Thailand, China and Malaysia). Obviously earlier in the year the virus was hitting that area hard causing most business to shut down. The timing was incredibly poor as it coincided with the beginning of the Chinese New Year. This celebration traditionally closes factories to celebrate. This caused a backlog in normal production before the demand in the US soared. Once the factories began opening back up they were only allowed limited staff (and many still remain so today).
Nitrile gloves are made from synthetic rubber. The raw materials required to manufacture synthetic rubber also was hard hit by the spread of the bug in the Asian region. The same materials used to make the rubber are also used in the production of plastics. Due to the world’s dependence on plastics, as well as the increased need of plastic to produce medical devices and supplies to help fight the virus, it put an even bigger strain on the already weak supply.
Once the bug began to spread beyond Asia the increased demand (in the medical community especially) began to rise from a regional need to a worldwide demand. Not only were hospitals and clinics scrambling to stock up, new demand arose from the increasing virus testing. To help prevent the spread frontline workers were changing their gloves between every single contact with a patient. This helped push demand far beyond what the factories could produce even at full capacity.
As the virus spread across the US, consumers who very rarely (or never) purchased gloves were beginning to purchase them as well. The CDC recommended people use them to prevent spreading and the public jumped right into purchasing them (and in large quantities). The addition of vastly increased consumer demand coupled with new, more frequent and rigorous cleaning in institutional and industrial trades (where they already relied heavily on the use of disposable gloves) caused an already limited supply to sell out in minutes when inventory was released. Think Lysol and toilet paper only with gloves.
WHY ARE GLOVES STILL IN SHORT SUPPLY MONTHS LATER?
This brings us up to the current situation. The simple answer on why the supply is still short? Because it never caught up and demand still continues to increase. Asian factories are now working at full capacity. The problem is even at full capacity they are still months behind and increasing production isn’t as simple as adding shifts or workers. It would require additional tooling and raw materials. While the companies are investing in the increased production upgrades they’re estimating the timeline for completion not to be until 2021. And even at that it will only increase production by 15%! Additionally transit times are extensive due to having to ship them in containers from overseas via cargo ships. Weather, customs delays and the need for more vessels compounds the delivery schedules.
Glove manufacturers are dealing with the increase in ways they never anticipated. When new shipments arrive first shot always goes to the frontline workers leaving very little left to be spread amongst glove distributors. This has caused most manufacturers to begin allocating small quantities to each of their distributors as each shipment arrives. With the demand from non-traditional markets (ie new customers) distributors’ burn through these small allocations faster than they receive them in most cases. And distributors are stuck dealing with frustrated customers from markets that they’ve traditionally supplied over the years because they have no supply to sell them. Most manufactures have went to a “preorder” method by announcing an allocation a month or two ahead of a shipment which “presells” everything before it ever arrives on US soil. Some of the manufacturers have even presold through 2021 and stopped even taking orders at this point.
WHY HAVE THE PRICES INCREASED SO MUCH?
There are multiple reasons. First is the simple rule of capitalism, when demand exceeds supply the price increases. Higher volume distributors are feeling the pinch of manufacturer cost increases literally monthly when new inventory arrives. Manufactures are citing increased costs due to the raw materials cost, the increased labor costs to keep factories running at full capacity and the increased shipping costs. We have seen many of our gloves increase in cost to us by up to 300% since January 1st! In other words a box that cost distributors $5-$10 a box on January 1st now cost $15 to $20 a box as of July 1st! And glove companies have already warned that over the next several months they anticipate even higher increases. Beware though, some distributors have chosen to take advantage of the situation by artificially inflate the selling price of existing old inventory to make a quick buck (or selling at lower prices but charging astronomical “shipping” costs).
Additionally, eCommerce distributors have seen some of the large third party selling sites place restrictions on what can be listed in the glove categories. One has even tried to create a monopoly by not allowing anyone but themselves to sell on “official” listings to suppress the market (even though they don’t have any inventory to sell themselves). This forces sellers to use less searched categories and listings just to sell their product. The same site has raised their selling fees on gloves as well so they get a larger chunk of the pie causing sellers to have to increase their selling price just to make the same margin. Another site simply isn’t allowing anyone to sell them on their site period so as not to make themselves look bad for not having any inventory. This has caused business and consumer shoppers to have to search elsewhere on the internet creating a larger demand in the non-traditional seller market than in the past. Many of the sellers that the shoppers come across that have inventory had to purchase these gloves third or fourth hand, making their costs and subsequent selling price even hirer. Thus continues the vicious circle of pricing. And unfortunately it’s going to get a lot worse before it gets better. And all signs point to it being quite some time before it does.
HOW DOES TRIPLE R TRUCK PARTS HAVE SO MUCH INVENTORY?
Truthfully, it’s not easy! Our managers, and even the president, have spent countless hours every week for months working to continue to secure inventory (and at the lowest price that we can). We have been a distributor of disposable gloves in the northeast for years. We buy direct from many of the manufacturers you see on our site and we’re part of the HDA Truck Pride buying group giving us a vast supplier network. Additionally, as a leader in tools and shop equipment in the region we have great relationships with our wholesale tool distributors as well. Tool distributors have long been considered one of the traditional disposable glove markets due to their heavy use in mechanical and industrial trades.
As the virus began to hit US soil we predicted that the demand was going to increase. We started stocking up on all the gloves brands that we carried and even added some expanded SKU’s that we didn’t. We were able to obtain a robust inventory before the demand really escalated. And while that inventory sold down and depleted we worked on obtaining more allocated inventory from shipments coming in. While it hasn’t been without its challenges we are glad that our demand “hunch” was correct! We are proud to be one of the few distributors that are able to supply shopper demand at the moment. And we’re doing it at the lowest price possible and maintaining the excellent customer service and fast shipping we are known for! We appreciate everyone’s business. Stay healthy and safe!