Unmasking the Shadows: Neutralizing Gray Market Trades
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Types of gray market sale
The gray market is not a monolith, but a complex entity with various types of sales.
The price game: Price differentiation exploitation
In the gray market, products are sold at significantly lower prices than the manufacturer’s original price. This creates a fertile ground for counterfeit sellers to offer their duplicates at reduced rates, luring unsuspecting customers. An Amazon seller, in a conversation with tech publication ‘Wired’, expressed concerns about his product listings being copied and sold on the ultra-cheap marketplace Temu, leading to a worrying drop in sales. In another instance, three individuals from Florida who acquired heavily discounted baby formula by falsely claiming their exporting locations. This type of gray market fraud may cause great harms to consumers and also lead to other criminal activities such as tax evasion and money laundering.
The issue of unauthorized resellers
When distributors sell to retailers in the gray market, end consumers are deprived of official warranty and after-sale service. This can lead to problems, especially when regional variations in product manufacturing result in functionality issues for customers purchasing from the gray market. Take the case of the beloved Cabbage Patch Kids dolls. While the dolls in the gray market looked identical to their American counterparts, their novelty “birth certificates” were in Spanish instead of English. The manufacturer declined to process the novelty “adoption papers” for these gray market dolls or send them annual “birthday cards,” unlike dolls purchased through authorized channels.
Challenges in combating gray market sale
Navigating the murky waters of gray market sales is no easy task for businesses. The challenges are numerous and multifaceted, often leaving brand protection managers grappling with a complex web of issues. Let’s take a moment to delve into these challenges, shedding light on the intricacies of this misunderstood market.
Strategies to mitigate gray market impact
Despite these challenges, there are multi-faceted strategies that can help mitigate the impact of the gray market.
How can Hubstream help you?
Hubstream offers a data-driven case management solution designed specifically for IP/ brand protection teams. Our software has been tailored to meet the unique needs of various industries, including retail, consumer electronics, e-commerce, pharmaceuticals, law enforcement, and government agencies.
With Hubstream, you can benefit from
A centralized data hub to organize and manage investigation data from various data formats effectively.
An AI-powered case management system to identify leads from the most critical to the least, assisting you to recognize repeat offenders proactively.
Collecting probative evidence from the gray market in one data hub for legal proceedings.
Assisting to develop data intelligence and provide insights to facilitate collaboration among IP/brand protection teams, the brand protection community, and industry experts.
Our global customer base attests to the effectiveness of Hubstream in providing reliable brand protection solutions and we are committed to helping you safeguard your brands.
Ready to safeguard your brand? Explore Hubstream’s data-driven solution today!