There are any number of reasons why your products end up on the Gray Market. Identifying they are there is the easy part. But who is selling them? How did they get the product? At what volume? And how can you stop it from happening again – and again – and again?
In an ideal world (the one in our head) your goods go seamlessly to the end user
In the real world a lot is happening you can’t see
We have hundreds of different examples as to how your goods can end up on the Gray Market – here are just some of them:
Hijacked or stolen pallets: Your goods appear to have shipped but they don’t reach their intended destination. Somewhere on the journey the pallet was offloaded onto another truck. This is generally the result of organized criminal activity.
Returns fraud: There are always some products sold that are legitimately damaged and/or malfunctioning. These are generally returned to the retailer they were purchased from for recycling. But this does not always happen as it should. The goods may be on-sold to a third party who will create a ‘new’ product from the parts and packaging for resale below MAP.
Volume discounts: It can look legitimate. A special deal is negotiated to provide your goods as an incentive to purchase another service – your sales team hits target and everyone is happy. Or are you? The third party is actually a reseller who now makes a super- margin or may choose to sell at volume under MAP – still at a profit.
Organized group buying: Buyers are paid a commission by a third-party to purchase your goods when they are legitimately discounted by a retailer. This evades minimum purchase quantities and enables the 3rd party to act at volume. The goods are resold at a profit.
Used sold as new: It can be incredibly difficult to spot quality issues online. Until someone actually buys the goods you don’t get to see the damage to packaging or the goods themselves. Every day we come across instances of goods that are dirty and clearly ‘used’, simply don’t work or have some other material damage.
In all these cases you need to have a multi-faceted approach to see exactly what is happening to your products, to identify supply chain leaks and take action. Knowing the product is leaking is not enough. You need to be able to identify the bad actors and have irrefutable proof to shut them down. That is what Ordian MI does on a daily basis.
We combine sophisticated algorithms and machine learning with data from you and the Marketplaces you use. This is then paired with MAP monitoring, automated test-buying and advanced analytics to clearly identify who is causing your Gray Market problems and the time stamped evidence to shut them down.
We find most Marketplaces and distributors are co-operative once they realize you know exactly what is happening and have real evidence to prove it. We are all about helping you build mutually beneficial long-term relationships by keeping your brand reputation and profit margins intact.
If you don’t believe your brand is being negatively impacted by this – talk to us about providing an upfront audit that will demonstrate exactly how much profit you are losing with the evidence to prove it.
