The technologically changing global economy demands constant vigilance to battle brand piracy, counterfeits and gray market infiltration.

1. Protecting Your Enterprise from Gray Market Infiltrators
The technologically changing global economy demands constant vigilance to battle brand piracy,
counterfeits and gray market infiltration. Gray market products can be as damaging and costly as
counterfeits to a manufacturer and as an ever-increasing issue facing many brand owners today, they
contribute to significant losses. The gray market activity involves the unauthorized movement of
goods via different geographies by unscrupulous distributors and trusted channel partners alike.
Gray market, also known as product diversion or parallel importing, is a fraudulent activity that
deflates profit of participating distributors, while reducing the revenue of the brand owner.
Beware of the gray market Impact on your brand
While the gray market activity spoils business relationships between manufacturers and their
channel partners, eventually authorized distributors may reduce their business with certain
manufacturers. There can also be a considerable erosion of your brand. Gray market imported
products may not have the necessary functionality, accessories, and features apart from support. This
can lead to customer dissatisfaction towards a brand; create brand equity issues, quality, packaging,
instruction manual, price, and safety concerns.
Taking control with the right solution
Gray Market products create disruptions with the “good” distributors in your channel—the ones who
are keeping their agreements. Unfortunately, these good partners lose sales to the gray market. If
they believe that there is unfair competition from a growing gray market, they’ll drop you as a
supplier. Manufacturers and luxury brand owners want to control the chain of distribution to assure
that a gray market product is not inadvertently or intentionally mixed in with its genuine product.

2. Needless to say, most brand owners also have contractual obligations with their distributors, who
would clearly not be happy to see products sold at a lower price in their markets.
To tackle the problem of gray market, both strategic and tactical remedies need to be a part of the
solution. Enterprises need an effective enterprise risk management solution that can help track the
distributors who are responsible for unloading these products in the gray market and take necessary
action against them. As the entire gray market sales process takes sales away from new products and
affects the distributor loyalty, look for an advanced SaaS-based software that has a propriety search
capability and can find where and at what price your products are being sold globally. With this kind
of data in real-time your business can be well prepared to take appropriate action against the
violators.
Read More About: brand management, Anti-Fraud, Anti-Counterfeiting