Grey Small

Grey Small

Grey Market: Advantages and Pitfalls

Many small sellers on auction-type online sites sell grey products. These products should not be confused with fakes or replicas of big brand names.

The grey market refers to the goods acquired for re-sale through distribution channels other than those authorised or intended by the manufacturer or producer. Another term used for the same practice is parallel imports. Parallel imports are goods that are imported through non-official channels from low to high price countries – a completely legal transaction.

For example, one might be able to source a pair of legitimate Nike shoes in Malaysia for half the price than one could do so in South Africa. Local entrepreneurs spotting such an opportunity could then import this merchandise and sell it for a profit in the local market, thus undercutting local retailers – a practice that is perfectly legal in South Africa. Many small – and not so small - sellers on use this method of parallel importing to source goods at competitive prices and then make a profit by selling them on our site.

Problems tend to arise with certain items, such as consumer electronics, where the importer is not able to provide the relevant service for the products and the local distributors refuse to service these items.

The buyers need to make an informed decision. They need to balance the initial saving in the price of the item with the risk of having nowhere to turn to in case the product malfunctions.

Due to the nature of grey market economics, it is generally difficult or even impossible to track and verify the precise numbers of grey market sales.

The manufacturers would, of course, prefer to have control over distribution channels. That is to be expected, because gray imports can damage their reputation in a round-about way: through no fault of the manufacturer, the name of the brand and the lack of post sale support may connect in the mind of a consumer who acquired the product in question through grey channels. Besides, manufacturers also need to protect their authorised dealers.

Others hold that grey importation is part of globalisation and is something that everybody concerned should get accustomed to. After all, if a grey importer can offer the same product at a more competitive price (either with a similar level of support or at a price low enough to justifying a lower support level), then that is simply part of operating in a free market and being part of the global economy. After all, with access to the Internet nothing is hindering South African consumers from accessing a web site in Malaysia and making a purchase directly from a Malaysian vendor.

However, importers and sellers should take the responsibility to inform consumers of the level of support that they are likely to receive when purchasing a product through the grey marketing channel.

That goes a long way towards clearing up the air and doing away with any confusion concerning the product and the after-sales service.

About the Author

Bobbie Buys works in marketing at bidorbuy.co.za, South Africa's largest online marketplace. Buyers and sellers come to bidorbuy to buy and sell virtually anything in auction format or at fixed prices.
Contact details: bidorbuy Marketing Department; email promotion@bidorbuy.co.za, web site http://www.bidorbuy.co.za

Three of my tooth have a small grey spot?

For some reason, three of my tooth, 1 on the bottom and 2 on top, on the side (around the gum area) is grey. What exactly is it?! And how can I fix it or do to make a fade? AHHH its scaring me :S Thanks for those who answered! I think it is a tooth decay... but if it is, is my only solution is the dentist?

Yes it's tooth decay. Those teeth are dying. You need to get a dentist pronto.

Adopting Webkinz Signature Lion & Small Signature Grey Tabby Cat