Brand Protection against the Gray Market threat

When a company wants to protect its intellectual property, they need to focus in brand protection. It is done to protect the revenues of a brand, but also to protect their image, their value, its reputation, and most importantly, work against counterfeiting. Keep in mind that brand protection prevents brand abuse. In this new era of technology, it is really important to take steps to have a good brand protection and the question is, why? Because the gray market is growing every day and it’s a market that enters the legal range.

What is gray market?

It is an unofficial market where products are sold through different channels that have not been authorized by the main suppliers. In other words, it’s the term used for retailers who buy unsold products and resell them at a huge discounted price in alternative websites. The gray market online has become very common.

Grey Market Threat Using Price Coordination

Gray Market examples

For you to understand better I am going to give you a serie of gray market good examples. Big companies often have a high stock of products that don't sell out after the season is over. A cosmetic store, for instance, is left with many products in stock that prefers to sell at very discounted prices to resellers in order for them to resell at popular platforms like eBay for cheap, where people are used to finding original brands for lower prices. This also happens in the gray market watches. Brands as expensive as Rolex are involved in this, and people get advantage of great discounts. Watch dealers get original watches at tremendous discounts in order to cut losses and this is something completely legal but morally doubtful. The luxury watch industry is affected by the gray market and so are other big industries.

Red Flags & Tips

It is not necessarily easy to know which products are being sold in a gray market. However, there are some red flag that help identify gray market products. On Amazon, keep an eye on the word “imported”. This is very suspicious and might mean that even though it is an original product, it qualifies as a gray market. A great example, are the Nikon camera lenses, that are being sold to costumers around the US all the way from overseas. For brands, it is very important to always be on top of this issue in order to protect their image and product against this market. What does gray market mean on Amazon? Amazon has a very interesting position on the gray market. It is known that most of the products labeled as “sold by Amazon” are products that other retailers have too many of and rely on them to resell them at lower prices. On the other hand, Amazon is on the lookout for suspicious products and flags them by marking them as“unauthentic” if they think they are products from the gray market. Even though they are not considered counterfeiters, they are not considered illegitimate products either.

In the future, the gray market seems to be one of the markets that will generate more money in the retail industry. Brands and online sales sites handles the problem in different ways, some more strict than others, making it a priority to be on the look out for these kinds of transactions to protect their image and products.