Bulk orders for COVID-19 tests are on the rise as companies brace for a winter surge, said iPromo CEO Leo Friedman.
He told Yahoo Finance that there's been a surge in orders for the two types of tests his company sells, with sales up 80% since the end of August compared to the summer months.
The Chicago-based company sells corporate gifts but added COVID-19 tests to its product lineup during the pandemic. Friedman said the recent surge in orders is largely for indoor event venues such as theaters or charity organizations. Live Nation, for example, just ordered 100,000 tests. And the tests generally aren't the for the audience — they're for performers and crew.
Friedman said the top-sellers are Abbott's (ABT) BinaxNOW, FlowFlex and iHealth. Abbott is in a quiet period and declined to comment on if it is seeing a surge in sales.
The surge in purchase comes as no surprise to Friedman, who has at least three to five workers out with COVID-19 every month — and some are getting it every few months.
And with more mitigation measures being relaxed at the federal and state levels, it is up to independent businesses to take on the burden of keeping their employees safe, he said.
Friedman anticipates bulk orders will continue to increase, and knows his company — which has purchased the tests at-risk to sell — is able to offer a better price than what is on the shelves in stores.
"Based on what's happened in the past few years, and what we know about the variants, going forward, I to say this, but I think it's going to fly up aggressively," he said.
He stores the tests in a climate-controlled warehouse, explaining that he's taking on a substantial risk for the number of tests he has in stock.
"There was a point where we had a bunch of tests and they were expired and we had to throw them away. We wrote it off," Friedman explained.
A minimum order is 25 tests, with the least expensive selling for around $5-$6, whereas the same test on retail shelves is $8 or above, Friedman said.
"The ugly truth is, these tests cost 50 cents to $1 to manufacture — they cost nothing," he said.
There could be a shortage of supply if the new variant causes a surge, but prices are unlikely to move, Friedman added.
So does he have enough supply for a potential winter surge?
"I want to say yes, but I thought last January as well, and I was super wrong," Friedman said.
Individual purchases of tests are not following a similar surge, however. CVS (CVS) and Walgreens (WBA) both said their sales of COVID-19 tests are steady.
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