What Is the Gray Market?

I cannot tell you how many times people have asked me what the term "gray market" really means. Everyone seems to know what "black market" means. Most people would agree with Merriam Webster that bottom line, black market trading equals illegal trade practices of buying and selling. What is not as well-known is the legal arena of "gray market." According to Webster, the term gray market rolled out around 1946. They define it as: a market employing irregular but not illegal methods; especially: a market that legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer. Gray market trading is not illegal trading. There is a "good" side of legally circumventing distribution, namely it is the great savings in purchase prices resellers can offer their customers. However, because this market is not subject to the guidelines of distribution, it is also a market which can be subjected to potential abusive and counterfeit selling practices. This is why many companies have partnered with the ASCDI/NATD (Association of Service and Computer Dealers and the North American Association of Telecom Dealers.) Their Anti-Counterfeit Task Force works together with the "good companies" who are offering quality products at a discount from distribution's pricing and work to prevent them from procuring equipment from unproven or suspicious new companies attempting to enter the business. It is from alliances such as the ASCDI/NATD of brokers and resellers who are like-minded in their desire to offer quality products at a reduced price that the gray maket is so successful. None of us benefit from counterfeit equipment entering the supply chain. For more information on the efforts of the ASCDI/NATD, please feel free to visit their website at http://www.ascdi.com/asna/. Bottom line - as with any other industry and arena, there are methods of buying and selling equipment that are considered "white market" and legal. I would never encourage any illegal or unethical sales practices. The focus of working in the gray market space is not to work outside of the law. In fact, it is a way to work within the confines of the law and provide additional cost savings to your customers. Please feel free to do research of your own. Call these companies. Ask them questions about how they procure their equipment, where it is tested, and confirm actual stock before you consider placing an order. (Merriam Webster, January 2012. Retrieved from http://www.merriam-webster.com/dictionary/gray%20market )

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