Brand Protection Strategies: Defending Against Gray Market DiversionSource: Eastman Kodak Co.
In this rapidly changing global economy, gray market diversion has become an ever increasing issue facing many brand owners today. Unlike black market activity—where counterfeit, refurbished, or stolen goods are resold as genuine brand products—gray market activity involves the unauthorized movement of commerce through various geographies by rogue distributors and trusted channel partners alike.
It has been estimated that as much as $63 billion per year in revenue is lost to gray market diversion in the U.S.1 Within the IT industry alone, nearly $5 billion in profits is lost to gray market activity each year.2 The problem is more prevalent in other countries, potentially costing hundreds of billions of dollars per year in lost revenue to thousands of companies worldwide. Considering that manufacturers could be losing 4.5% of sales or more to gray marketers, it is no wonder that companies are now taking a hard look at their Brand Protection Strategies to combat this ever increasing problem.