Consumers who wish to discern gray market
goods from the original offerings can use such cues as brand specifications and the nature and existence of warranties.
The biggest impact of the gray market
is the erosion of profits and margins for both dealers and OEMs - and it's usually the dealers that feel the pain the worst.
They even went so far as to join other manufacturers in bringing a suit to the Supreme Court that would have outlawed imports to the gray market
Also known as a parallel market, the gray market
operates outside the tightly controlled pharmaceutical distribution channel, which requires strict standards for storage and handling, as well as requirements to record the product's chain of custody from manufacturer, to distributor, to pharmacy.
OEM products enter the gray market
most often through unscrupulous resellers or distributors that take advantage of legitimate discount programs that OEMs use to enter new markets or expand in existing markets.
One example of how a firm discovered gray market
distribution of its products is illustrated in the comments of a U.
eTail East: "Combating Fraud: Winning The Gray Market
The process of fighting against counterfeiting and gray market
consists of a five-step approach.
goods is the unauthorized leakage of real product into the marketplace, resulting in the manufacturer not receiving full payment including: Leaking of excess inventory via unauthorized channels, Product that is sold illegally, and distributors misreporting damaged or destroyed product that is sold into the market.
AGMA's primary focus is on sharing and developing best practices to effectively render gray market
and counterfeit activities more difficult, undesirable and unprofitable throughout the entire industry," noted Ram Manchi, AGMA president.
By following some of these considerations, AGMA member companies can help to detect unauthorized flow of goods into the gray market
and foster long-term and mutually beneficial relationships with their channel partners.
KPMG and AGMA estimate that the value of gray market
products in 2007 averaged $58 billion, placing the gray market
between five percent and 30 percent of total IT sales.