Gray Market & Diverted Goods
Question: We found our products for sale at an unauthorized store. How can we determine the scope of this problem?
Gray market and diverted goods can be just as harmful as counterfeits. They decrease sales of legitimate products. They can be fractious to your relationships with your sales force, your manufacturers and your business partners. As manufacturing and distribution becomes more globalized, the problem of gray market and diverted goods continues to increase.
One of the biggest problems with gray market merchandise is that it can spring from any point along the manufacturing-distribution chain. In order to address gray market goods coming out of your factories’ back doors, we believe that prevention is the best medicine. To that end, we can assist you in performing due diligence on manufacturing facilities which includes background research on factories’ principals, including former and current partners, as well as undercover investigations of the factory itself. For existing and newly established manufacturers, we can conduct ongoing compliance checks. These two tactics play a valuable role in preventing and uncovering sources of gray market merchandise.
As with the factory-level investigations, we uncover and address distribution chain problems through a combination of both discreet and forthright activities. Our investigators can conduct undercover investigations of importers and distributors and make purchases of pilfered goods.
Finally, in addition to tried and true investigation techniques and direct interactions with factories, distributors and retailers, we also bring our creativity and ingenuity to the gray market problem. Ultimately, gray market merchandise is not just a cost of doing business in a global economy. You have the right to demand that your IP is used only in the manner that you prescribe, that your products are only manufactured at the levels you authorize and that your goods are distributed in accordance with the terms and conditions you dictate. Preventing and stopping deviations from these approved practices is essential to building, maintaining and protecting your brand and your organization.