Difficulties Posed by the Grey Market

Not all manufacturers use distributors but for those that use, grey market has created lots of difficulties for these manufacturers. Product experts at Vikings Blade have highlighted several of such difficulties that they do have had to deal with.

Price Instability is the major difficulty many manufacturers have to first deal with. It affects the pricing with distributors as well as with prices for its direct sales. This is because copycat brands make use of inferior materials and can afford to lower their prices.

It can also mess up the after sales channel for original brands. This makes it very difficult to maintain point of sale services and dealer support. This can drastically affect the income stream of the original company.

It creates dissatisfaction from customers. Imagine a situation where a brand receives complaint about one of their products, only to discover it was marketed by another copycat company in the grey market. This puts the original brand's reputation in jeopardy. Many companies have had to hire PR professionals to help redeem their image in the public's eye. This does not include trying to avoid getting sued by unsatisfied customers.