How to Protect Your Brand from the “Grey Market”
Updated: Apr 6
It takes just one unauthorized seller to bring down the reputation of your brand.
You as a company do everything to provide quality products to your consumers. You pride yourself on your brand and the excellent customer service you offer. When people see your logo, they think of you as a great company with great products.
That’s true if the product is coming from you. But what if it isn’t?
What if you had a product you pulled from the shelves for quality issues or a recall?
More importantly, what if these products end up on the grey market?
What is the “Grey Market”?
The grey market includes any retailer who is selling a legitimate product but acquired that product by unauthorized means.
This could be a rogue distributor, liquidated stock, stolen goods, a distributor selling off excess inventory to another distributor or retailer, or something else. Not only that but grey market goods can appear both on brick-and-mortar shelves or online ones.
A Few Ways to Protect your Company from the Grey Market
Let the Professionals do the Work
The best and most effective way to combat the grey market is to properly destroy your products with a licensed and reputable product destruction company. If there is no product to sell…problem solved!
Recently, American Shredding took on the job of destroying headphones that a company no longer wished to be available to consumers. We put them on our conveyor belt and ran them through the shredder. (Watch a video of our shredder). This stopped any attempts by sellers on the grey market to resell them and thereby safeguarded the company’s brand.
Identify any Unauthorized Sellers
You can’t stop the grey market if you don’t know where—and what—it is first. Your current sales data can tell you a lot here. One good identifier of a grey market seller is a suspiciously low price. So, monitor your prices across all your distribution channels for any red flags. Then, drill down into any seller whose prices are lower than usual. They could have acquired your products by unauthorized means, making them part of the grey market.
Educate Your Consumers
It is good to educate your consumers about where to shop and why to shop there. You don’t have to be explicit about the reasoning behind this—most shoppers don't know or care about unauthorized sellers or the grey market. But it does affect them.
Try working it into your existing marketing and sales by emphasizing your trusted retail partners. List where your products are sold, and includes links to authorized websites. The goal here is to make it incredibly easy for consumers to buy your brand. This decreases the odds that your consumer ends up with a grey market seller.
Send Cease-and-Desist Letters
So, you’ve found some grey markets distributors pushing your products without your consent. What next? One strategy is a cease-and-desist letter. This notice serves as a precursor to legal action. You are informing the seller that you are willing and able to pursue litigation if needed. This is also helpful because unfortunately in some cases, the grey market seller may not be aware that they are part of the grey market. Therefore, a cease-and-desist letter may be all you need. If not, it can help you prepare for future litigation or other legal steps.
Take Them to Court
Finally, if they don’t cease-and-desist, you arrive at that litigation stage. Unfortunately, for some grey market sellers, a lawsuit may be the only step you have left to protect your brand.
In this case, find a legal firm that has experience with unauthorized sellers, trademark concerns, etc. Again, go to the professionals first.
In conclusion, where and how your products are sold is massively important to your brand. It shapes how consumers perceive your company, and—just as importantly—affect your sales and bottom line. And in this day and time where reviews are king….keeping grey markets away is very imperative!
American Shredding offers certified product destruction services to help you protect your product brand. We use a combination of machine and manual processes to disassemble, break down, shred, or crush the products. They are then reused, recycled, or disposed of in a safe, secure, and environmentally friendly manner. We offer services in Arizona, Texas, Oregon, Utah, and Washington states. See our list of cities here.
Need some products destroyed? Get a quote today!