What are Grey Markets and How Do They Function?

What is Grey Market?

A grey market is a scenario wherein products are sold outside of the ambit of the authorized distribution channels specified by the product manufacturer or by the business that owns the product IP.

It is a nightmarish scenario for the product manufacturer as it disturbs the fundamental ecosystem of the product and complicates things. Let us try to understand this market and how it fundamentally affects the business of the OEMs who manufacture and distribute the product. 

It is important to understand that in the grey market, legal sales of authentic goods happen, and so the authenticity of the goods are not compromised in any way. However, this sale happens at an entity or marketplace which is not approved by the original manufacturer. Let us look at some common forms that grey marketing takes.

Unavailability of goods

If the goods manufactured by a producer is not available in a country (separate from the country of origin), then it is common practice for sellers or e-commerce websites to import the product and sell it on their own platforms for good margins. What this does is complicate the delivery and warranty service for the original producer, and harms the end customer. 

Competition

It is very common to see products that are priced higher in one country than it is in another, due to various reasons such as higher tax rates, governmental duties, profiteering on the part of the producer and so forth. This opens up avenues for grey marketers to come into the market, importing the same product via their own means of transportation and selling the same, authentic product at a cheaper cost on their own platform, than what it is available at the official producer’s e-commerce or offline store. This allows for the grey marketers to make a hefty profit on the same product, because of the increased business volume,

Rules and Regulations

Restrictions put in place by a governmental agency on the opening and functioning of a large outlet by the original producer do not apply to smaller establishments or to e-commerce platforms, thus giving them the advantage in dealing with original producer based products on a grey marketing basis. This gives them the impetus to go ahead with grey marketing.

Convenient distribution channels

Sometimes original goods which are distributed by product manufacturers, are not available at local locations and it becomes difficult for consumers to get them delivered. Grey marketers exploit this situation by opening up unauthorized distribution channels which get these products delivered to the consumers easily. 

For a producer a grey market causes a conundrum because they would like to maintain the quality and reliability of their own distribution network. Professional brand protection services can help producers to gain control of the distribution network by weeding out bad actors from the chain. 

Grey markets thrive because the official producer does not properly utilize the means available at their disposal to deal with such marketing tactics. Using a proper service to get rid of such markets will help strengthen the distribution network and increase profits for the original manufacturers. 

Leave a comment

Your email address will not be published. Required fields are marked *

Popular Post

Recent Post

ClearVPN Review – Why You Should Buy It?

By TechCommuters / August 2, 2021

Want to access geo-restricted sites, but don’t want to get into the nitty-gritty of technicalities? You are in luck. ClearVPN is just the right VPN for you. Unlike other VPNs in the market, ClearVPN lets you choose the activity you wish to perform, not the server. This makes using both a VPN and staying secure […]

Tips on Cleaning Up the Storage on the Mac Computer

By TechCommuters / July 31, 2021

Of course, you’ve spent a lot of money for your new Mac, and we understand how it can be frustrating when you see it starts working slow or any other unusual things happen, like an unexpected crash of apps. What happened with the expensive device and how to stop and prevent this problem? In our […]

Fastest Internet Connections in USA

By TechCommuters / July 30, 2021

Human nature is defined as the constant struggle of man and woman to fulfill their immediate needs, wants, and desires. Once that list is achieved, we want more and in a consumer-dominated world, there is nothing better than that. You may be a fan of fast internet speeds, however, you would also need other perks […]

Upgrade Protection Of Personal & Business Data For Your Mac

By TechCommuters / July 29, 2021

Identity theft – what is it and how to protect yourself? At a time when there is an unlimited amount of information available to the individual via the Internet, and the development of technology and the increasingly complex operation of the public and social life require the exchange of large quantities of data, the right […]

4 Industries Leveraging Blockchain: Use Cases And Benefits

By TechCommuters / July 28, 2021

Blockchain technology has advanced significantly since the launch of cryptocurrency in 2008. Today, entrepreneurs in various industries have embraced its value and technological advantage, trying to appropriate it for advancing their competitive edge on the market. Besides, blockchain may open up new doors due to its dispersed and flexible nature, helping companies through transparency, privacy, […]

Top 10 Best Countries to Outsource Software Development

By TechCommuters / July 28, 2021

Are you contemplating software expansion? The complexity of programming necessitates the need for an expert programmer. While anyone can pass out as a developer, it will help if you research the leading destinations to outsource software development specialists. This article factors in everything you need to know when looking for a software developer.  Factors to […]

10 Best Learning Management Systems in 2021

By TechCommuters / July 24, 2021

Learning management system, aka LMS, is the new way of learning. LMS is developed to help individual’s to create, manage and provide online courses. It allows students and teachers to learn and demonstrate their skills anytime and anywhere.  Today, there are so many different LMS software available in the market with vivid features and functions, […]

What Are Some Cool Things You Can Achieve on a Mac

By TechCommuters / July 22, 2021

As a new MacBook owner, you might be surprised by how much the computer has to offer. Apple engineers push for new macOS updates that come with the latest features and improve the overall user experience. If you are still new to the macOS environment, it is possible that you have not discovered quite a […]

Key Opportunities of E-learning for Remote Workers

By TechCommuters / July 21, 2021

The emergence of remote workers has been on the rise for the last few years. This is with a good reason as well. The e-learning solutions provided are not only for employees. Organizations are also implementing them in their day-to-day activities. Working remotely means that you have flexible schedules. You can be able to plan […]

10 Best Finder Alternatives for Mac in 2021

By TechCommuters / July 20, 2021

If you are a Mac user, you probably already have a bittersweet relationship with Mac Finder. It is an indeed powerful file manager and graphical user interface tool for Macintosh. But, despite being the default Apple program, it lacks many features. Plus, Apple hasn’t made any efforts to update Finder in a long time.    However, […]

10 Best Zip File Extractors in 2021

By TechCommuters / July 18, 2021

It’s common knowledge that compressed zip files are easy to share and help to free space on your disk. However, if you want to extract data from your zipped files, you need a zip file extractor. A tool that can decompress your data quickly and make it easily accessible for you.  Usually, a zip tool […]

How to Fix a Stuck Pixel on your Screen Swiftly

By TechCommuters / July 16, 2021

Does a little permanent black or colored spot on your LCD, OLED, or TFT screen annoy you? If yes, then before calling a repair guy or ordering a new screen, wait for a second and try to understand the stuck pixel concept.  Once you get the hang of pixels, you can save your warranty for […]

How to Block Porn Sites on Your Kid’s Computer and Mobiles

By TechCommuters / July 14, 2021

In the current scenario of an online environment, Porn is all over the Internet. Online Pornography has become a bad habit of digital life. Children are growing up in the digital world. Every kid has access to smartphones. Using smartphones, any kid can easily access the Internet. Thus, it has increased the kid’s risk of […]

How to Remove Bloatware from Windows 10 Easily

By TechCommuters / July 12, 2021

Is your brand new laptop bloated with unwanted programs? Unfortunately, then, you are not the only one who is struggling with bloatware. That’s because Microsoft is no longer stronger on bloatware. However, the good thing is that you can remove bloatware in Windows 10 easily.  Today, a new Microsoft device is swamped with a series […]

Fenced.ai: A Holistic Overview of Monitoring Your Child Online

By TechCommuters / July 9, 2021

Are you worried about your kids wandering off to the dark side of the internet? Do you want to ensure the safety of your kids online? If yes, you have probably considered using parental controls to keep your children away from risky internet behavior. Here is our review for the latest parental control solution in […]