Brian Kolfage, a veteran in Florida, jumped into the mask business when he realized the item was seriously lacking in the US.
Kolfage once persuaded Americans to donate millions of dollars to a private project to build a southern border wall to support President Donald Trump. But when Covid-19 broke out, this veteran realized a new business opportunity.
A month ago, Koflage opened a business, named America First Medical, offering a large number of high-end N95 masks on websites and social networks. Each N95 respirator was offered for $ 4, much higher than before the Covid-19 outbreak, but still below the price that hospitals and nursing homes are buying to buy this item. .
Though Kolfage has yet to find a buyer, he has been searching for masks around the world, including in stockpiles in Japan and Eastern Europe. If the broker succeeds in a contract, he will receive a 1-3% commission, depending on the size of the order.
Kolfage thinks he is serving the community. "We do things that hospitals and many places can't do," said the 38-year-old veteran. "We are the people who connect supply and demand. Buying or not is the right of hospitals."
Kolfage aims to become one of the new style mask brokers. As Covid-19 spread around the world, a chaotic market erupted. Brokers say they can buy millions or even hundreds of millions of masks in other ways and the price is much higher than the previous retail price of only 1 USD each.
The volume of transactions is large so even though the commission rate is low, the broker still earns a high profit. These intermediaries can help alleviate the scarcity if successful in encouraging manufacturers and traders to sell masks where they are needed.
However, the scarcity also disrupts quality control norms, causing masks of unknown quality and origin to spill onto the market, according to medical supplies and health officials.
Reuters reporters interviewed five mask dealers, three in the US and two in China. These people say the mask market is "in turmoil", they must quickly connect sellers and buyers before competitors "sniff" and collect all goods before them.
Jake Mei, owner of a pump supplier in Houston, Texas, posted on Linkdln that he has 8 million masks made by 3M for $ 4.10 and $ 4.20 each. "Good prices and fast delivery!" Mei promises. However, during the interview, he said sourcing is difficult.
None of these 5 brokers disclosed suppliers and customers. They all say manufacturers are setting new prices, causing the price of masks to increase recently.
Kolfage claimed that the mask he supplied was not Chinese, but a good quality product, certified by the US Food and Drug Administration (FDA). He added that he charged commission lower than many other brokers.
On March 23, US President Donald Trump signed a moratorium on hoarding and blowing up medical supplies. Justice Attorney William Barr said he had set up a national task force to investigate the conduct.
If you "have a large supply of toilet paper stored in your home, don't worry," Barr said at a White House press conference the same day. "But if you have a large stock of masks in the warehouse, you'll see someone knocking on the door."
A Justice Department spokeswoman declined to comment on the mask trade. The FDA did not comment, saying it had relaxed some quality standards during the crisis and allowed the trade in masks to meet the standards of other countries.
However, some mask brokers appear to be faking products or selling substandard products, according to 3M, a large masks manufacturer based in St. Petersburg. Paul, Minnesota and Premier Inc, a major supplies supplier in Charlotte, North Carolina.
Chaun Powell, Premier's vice president of strategy, said some ad suppliers could supply millions of masks of unknown origin, making the company extremely skeptical. The company has warned customers about these brokers, but some customers still place orders.
"It shows despair in our supply chain," he said. "Many people would rather buy a substandard mask than nothing."
3M also warned that many of the products marketed by the company name could be fakes. "3M has strict quality standards, so products that lack a strap, have a strange smell, broken valves, misspelled names ... are not products of the company," a 3M statement said.
A long-term distributor of the company said that genuine 3M products are also being transferred by brokers to other distribution channels for profit. "The question is how is the material transferred to another channel?" Michael Einhorn, chairman of Dealmed, a medical supplies company in Brooklyn, New York, said. "Supply chain has problems".
While many people say can provide millions of masks, genuine distributors cannot, Einhorn said. "Face masks are hand to person. By the time they reach the hospital, 10 people have profited from it."
3M said it did not raise prices, but it could not control the price others sold. On March 25, Mike Roman, 3M's chief executive, sent a letter to Justice Minister Barr and other officials, saying the company wanted the government to crack down on counterfeiters and profiteers.
Kolfage and other brokers said their trading activities were transparent. The buyer's money will be held by a law firm and the product will be verified by an independent firm before the transaction is completed.
Markets bustle brokerage business for scarce goods. Two weeks ago, the leader of an organization managing a nursing home that thousands of members coming off the mask.
"They don't have enough masks to use," said Dr. David Gifford, medical director of the American Health Care Association.
Hospitals are beset with chaotic markets and new challenges. Holy Name Health Center in Teaneck, New Jersy said 12 patients died from Covid-19, currently 139 people infected as of March 29.
In masking operations, Kolfage said speed is the most important factor. On March 3, the day he registered the site, Kolfage posted photos of a stack of 3M masks in the warehouse on Instagram, declaring that there were 300 million N95s available for shipping to the United States.
The supply was a wealthy businessman, who wanted to sell the entire lot for $ 3 each, making three times the profit of the investment. "This is in Japan and Osaka airport is getting ready to load on board," Koflage said.
While the buyer has not been found, this is a "unique opportunity" and Kolfage advises US suppliers of supplies to accept it because "now is the time for the seller to decide the price."