A grey market is essentially a market that deals with goods that are sold by distributors who have not been approved as resellers by the parent company. This retailer could be selling the genuine product but they got a hold of these items illegally. They might have gotten these products through various means such as theft, another distributor getting rid of excess stock, or even just another distributor who is up to mischief. Another way the market works is that these illegal retailers, will get genuine products from the authorized distributor in a particular area and then will sell the same items in another different area or country. There are various ways that one can combat grey market sellers.
Detect unofficial vendors
It is important to determine who and where these unofficial vendors can be found. A good way to determine such a vendor is to check for very low prices. This can be done by having a look at all the prices across the whole region or country that are provided by a distributor. Then look further for any retailers whose prices are much lower than recommended. There is a possibility the product they are selling has been acquired through illegal means.
Use a uniform transfer price
This can be very imperative in eliminating grey market sellers, especially in the long run. This is because, it means that you have a single uniform policy that guides your pricing in all regions, thereby, eliminating the existence of different prices in different regions. The different prices that were present previously are what helped the growth of a grey market seller in the first place. At the same time, it is key to have a pricing policy that sets the minimum and maximum prices. This again ensures a single transfer price in all your markets.
Use different packaging
This means having different packaging or even different names for the same product but these packaging will be specific for different regions. When a product has specific packaging and name in a given market it eliminates the grey market vendors. This is due to the fact that they are unable to buy products from one region and take them to another region at a lower price as the customers will not be able to recognize or identify with that product, and consequently will be less inclined to buy it.
Invest in consumer education
Another tactic is to educate the consumers of your product in terms of where they can purchase it and also the advantages they can get from getting their products from that location. It is important to specify specific distributors and retailers and their locations as well as indicating which websites are authorized as locations for sales and service. This enhances online brand protection and consequently, makes it very easy for consumers to get a hold of your products and eliminates the appearance of grey market sellers.
Using dissimilar serial numbers
This can help fight grey market sellers, especially where serial numbers that are different are used for different regions. In this way, at any point in time whenever the consumer needs support such as repairs they can only receive such a service in a particular area by having their serial number verified by the organization or a local retailer.
