1. Why Grey Market Sales Hurt Manufacturers Bottom Line
Simply put, a grey market is termed as a parallel market that operates trade of any product through
distribution channels that are unofficial, illegal and unauthorized. The term grey economy indicates
workers that are being paid under the table, without any income taxes. Today with the advancement of
internet and its varied applications it is possible for anyone to set up a fake website and sell counterfeit
goods. While at one hand the counterfeiters make profit, the original brand name and reputation gets
tarnished and incurs revenue loss as well.
Gray market goods are expensive and damaging to any manufacturer. Their sales have a negative
influence on the buyers who are expecting the warranty and features of the original products. This
apart, it affects the legitimate channels as well. Generally products find their way into the grey market
when an authorized channel releases goods to unauthorized dealers who sell them at a high discount.
On most occasions, they are successful in representing these goods as legitimate.
At the same time, some of the products are old products that have been given off as they are no longer
in use or because new models have come in. The overall grey market sales process robs sales away from
new goods, and has a negative impact on the distributor’s loyalty. However, to combat this situation
eminent service providers have come up with counterfeit detection SaaS based software with
innovative search capacity. This helps a manufacturer to locate where and at what price their products
are being sold round the globe. Once you have this data it is easy for you to fight against the violators.
Grey market goods lead to disruptions with the “good” distributors in the channel, who always keep
their agreements. It is unfortunate, that these authentic and able partners loose sales to the grey
market. This is where the new age anti-counterfeiting solutions come to play offering the best
protection through the following steps:-
Apart from searching the internet proactively for counterfeits daily, the solution puts into use
human intelligence to ensure complete data integrity
The solution allows companies to check the percentage of fake products in the market by
recognizing the networks and syndicates providing high volume counterfeits
Today grey market products are a great threat to any enterprise’s bottom line and can intimidate even
the most able executive. While there are some who consider grey market as “the cost of doing
business”, counterfeiting solutions for combating the same works towards proactively recapturing the
lost market share, revenues and brand reputation. These solutions help enterprises to track down the
distributors responsible for unloading goods to the grey market and take the required action against
them.
Read also on: Online fraud detection, Brand protection