in LPRC Reports

Gray Market Goods Report Johns Blackwood Hayes 2008

Shades of Gray: Gray Market Goods
Tracy Johns, Robert Blackwood and Read Hayes
Retailers and suppliers strive to understand the dynamics of merchandise flow in order to minimize losses while maximizing financial success. This paper provides a literature review describing gray or parallel markets. Product flows directly from manufacturers to wholesalers or retailers, as well as being resold by these same entities due to over buys or as a source of further revenue and profit. Likewise, product sold to overseas’ markets may be domestically purchased more cheaply through diverters and other importers because of price differentials and currency exchange rates. It is currently not known how much stolen, expired or damaged and re-packaged, or counterfeit product is mixed in with first-quality product re-sold on the gray market or “the wire.”
Keywords: gray market, the wire, parallel market