While shopping online, you may have seen products listed as ‘’parallel imports’’ or something similar. These goods and others like them are known as Grey Market goods. While not illegal, they are unethical and compromise the business model of a manufacturer. These grey market goods have created a problem for manufacturers.
Selling Grey Market Goods in Online Market Places
Grey market goods cut into the sales and profits of manufacturers by reducing the number of legitimate products they sell. Grey market goods are regularly brought into a local market from another country, the seller will buy the product in a region where it can be found for a lower price and sell it locally where prices may be higher. This means that the manufacturer or legitimate retailer does not see the profit of the item as they should. For consumers, this creates another problem, items bought through the grey market may not be eligible for warranty or manufacturer support.
Manufacturers should look for ways to prevent grey market goods from affecting them. A common and fairly simple method is to include the country of sale on the item or packaging. This will educate customers on their purchase and make them aware that the product may be a grey market good and should be avoided. Similarly, consumer education may prove beneficial, while some countries may require that grey market goods be labeled as such, others may not. Educating consumers on the differences they should expect on a product intended for local sale is important to help combat the issue.
Additionally, manufacturers should consider the use of services tailored towards combating grey market goods; services such as Wiser Market provide manufacturers with the ability to fight back against grey market goods as well as counterfeits. Services like these may prove invaluable as grey market goods become even more prolific. With the increasing amount of grey market goods available, it is very difficult for manufacturers to maintain the security of their brand without outside assistance. It is becoming easier and easier for sellers to import goods into local markets. The rise in online market stores and competition therein may draw many online retailers to accept sellers of grey market goods, regardless of the ethical concerns it may rise. Manufacturers should, therefore, try and limit the number of online retailers and resellers they use, making it easier to see if an online store is an authorized distributor or not.
Consumers should try and be wary of grey market goods as well, as the supporting of grey markets damages the manufacturer who worked to create the product. Avoid using sites with questionable track records and unlisted sellers, as one cannot be sure of the origin of the product they are selling. Consumers should also take notice if the price of an object is suspiciously low, low prices may indicate that the seller does need to recuperate the same costs as a regular retailer or seller. Making manufacturers and retailers aware of grey market sellers you have found may help manufacturers establish better safety precautions against grey markets.