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Importing 'Grey' Goods & Definition!

Discussion in 'Import & Export' started by TreatWise, Mar 3, 2011.

  1. TreatWise

    TreatWise

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    Well Im hoping this Topic will be pinned to give some information and insight to all the lovely members on this forum :Clap:

    Basically there is a bit of a uneasiness when it comes to Gray/Grey Goods everywhere but is this a valid viewpoint?

    What are Grey Goods?

    Well one definition that is offered is:

    "Genuine branded goods (called 'gray goods') sold outside of an authorised sales-territory (or by non-authorized dealers in an authorised territory) at prices lower than being charged in authorised sales territories (or by authorised dealers.)"

    Another one which explain in a bit more detail:

    "The grey market describes the purchase by intermediaries of product which is not supplied to them by the "authorised" distribution channel of the supplier. Thus, a warehouse club in Canada that sells a stereo bought in the U.S. or elsewhere from other than the manufacturer is supplying grey market goods. While grey market products are frequently the same as would be available from conventional channels, the grey market assumes responsibility for service or repair where the manufacturer declines this support."

    What are the implications?

    Well one of the main implications that arises when purchasing Grey goods is the whole process of funding our own society. A lot of these purchases are made 'Under the Table' without distributors paying income tax or making any record of their sale which causes it's own problems and is a crime in itself if you are selling Hundreds of Camera's and not declaring the profits!

    Are you feeling brave or flush?

    Thats another thing you must ask yourself as Grey goods are NOT protected under the Manufacturers warranty, you waived those rights as soon as you took on the Grey Goods so if someone purchases an electronic item from you and it goes wrong after 2 months, then you the supplier are responsible and must either replace or refund.

    The Grey market itself is very far removed from the Black-Market which deals in Banned or illegal items such as Guns, Drugs etc by diverting it past customers, although one important market is the Dark Market which involves such things as Crude Oil or other unregulated (although legal) items.

    Can I be prosecuted?

    Well, technically no as within the EU this would breach what is known as 'Competition Law' although don't quote me on it being the same for America as have no idea on their legal system. With this being said, although it CAN it is not a rule set in stone.

    Manufacturers or their licensees often seek to enforce trademark or other intellectual-property rights against the grey market. Such rights may be exercised against the import, sale and/or advertisement of grey imports.

    One famous case would be Levi's Suing Tesco in order to stop them selling Grey Market Jeans in which Levi's Won.

    Rights can be limited. Examples of such limitations include, exhaustion of rights in the European Union.

    Anyway I could go on with the Boring Stuff but thats a general idea of what Grey Goods are so hope it helps! :welldone:

    James
    Vimal Vyas, 1711 and Mustafa Erdogan like this.
  2. beacon hill

    beacon hill

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    Re: Importing 'Gray' Goods & Definition!

    Very good read

    Couple of years ago (in my category) a load of grey importers got stung.

    There was an grey import electrical item that was,nt ROHS compliant..........They also did,nt work........Serves em right
  3. TreatWise

    TreatWise

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    Re: Importing 'Gray' Goods & Definition!

    Thanks :D Yeaaa exactly it's a risky business, prices might be good but you have to be prepared for comebacks. Stick to 100% legitimate market goods and there isn't a problem!

    James.
  4. mdsltd

    mdsltd

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    Re: Importing 'Gray' Goods & Definition!

    The grey market is literally huge in the mobile handset industry & has been for many, many years. An awful lot of well known establishments are extremely active in this area contrary to what the ordinary public may want to believe!

    Just to add, im my experience a lot of household names will honour international warranties on their products Apple included so the assumption of warranty voided on "grey" market goods may not entirely be 100% correct.

    We trade a lot of what is considered "grey" market products & havent had 1 single issue in 10 + years & I dont know of any other traders who have had problems either!
  5. TreatWise

    TreatWise

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    Re: Importing 'Gray' Goods & Definition!

    That is the biggest market which Grey Goods operate in, but come on I'd be here all day if i listed each individual market! :Clap:

    "Today, it is estimated that over 30% of all mobile phones traded will pass through the grey market and that statistic continues to grow. It is impossible to quantify an exact figure, but sources suggest that as much as 500,000 mobile phones are bought and sold outside of official distribution channels through their trading platforms every day."
  6. mdsltd

    mdsltd

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    Re: Importing 'Gray' Goods & Definition!

    I would say more than 30%, a lot of well known high street stores sell grey market handsets believe me ;)
  7. TreatWise

    TreatWise

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    Re: Importing 'Gray' Goods & Definition!

    I believe you, We studied the Phone market but with it being grey Goods there is no official figure, it varies from Country to Country, if it's a better way of making profit and falls within the legal parameters then it works for the Phone Industry :)

    James.
  8. JustCraig

    JustCraig

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    Re: Importing 'Gray' Goods & Definition!

    That is the same within the video games industry. Many well known high street and on-line retailers stock "Grey Goods" - I can see why people do it, especially when you consider the average price of a brand new video game is £32 plus VAT when buying from official distribution channels (obviously not taking into account buying in volume)

    That leaves around £1.60 profit per sale on a £40 game.
  9. canada

    canada Retired Moderator

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    Re: Importing 'Gray' Goods & Definition!

    Thread has been "pinned".

    Scott
  10. Pete

    Pete

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    Re: Importing 'Gray' Goods & Definition!

    There are all sorts of gray market goods. Having an automotive background, I can tell you of many "gray market cars" that have been imported into the US and made to fit the US safety standards, where stock production models of those cars would not pass emission or safety standards.

    However, this made some of them illegal in certain states that had their own laws, in addition to the federal laws.

    Years ago in the US all headlamps had to be the glass Sealed Beam type, which were OK from a lighting standpoint, but drove designers crazy, since they had to limit the front ends to accommodate the round or rectangular units. It was not that the halogen technology was illegal, but that the units had to be sealed, without replaceable bulbs inside. In fact, for a few years I was selling European made sealed beams with halogen bulbs sealed inside, a gray market product distributed outside normal channels. But in some states even they were illegal.
  11. jennyembleton

    jennyembleton

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    Re: Importing 'Gray' Goods & Definition!

    This subject both confuses me and worries me... I buy my stock from all around the world... pay the correct import duty/vat and declare all my earnings. I sell high end cosmetics... and have never had a listing pulled from ebay yet... after speaking to different people it seems the brands will 'turn a blind eye' if you are not selling their products too cheaply and use your own pictures/descriptions etc. With cosmetics, there is obviously no warranty issues involved...although i do have to be careful not to buy 'expired' goods. I have sourced many suppliers within the UK... but because it is almost impossible to buy direct from high end brands themselves... then the outcome is that these suppliers have in fact bought from the grey market too... so even if you think you are buying from an authorised uk dealer, then the chances are they are not authorised. Another thing that puzzles me is that if the brands really did not want their products being released into the grey market... then surely they could stop this! I have spoken direct to brands before who have told me they are in the process of closing down 'third party/unauthorised' wholesale sites... but this never happens - so the whole subject baffles me somewhat!
  12. TreatWise

    TreatWise

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    Re: Importing 'Gray' Goods & Definition!

    Companies don't get rich by stamping out and prosecuting people selling their goods.

    After-all Grey Goods are genuine goods that are made by that company in their factory so someone somewhere has paid the going rate for the products.

    I mean if I ran my own Make-up Line: "Treat-Line" Eye-Liners :Clap: and I had sold 10,000 into say the UK Market for the going rate of say £1.99 to the wholesaler but then they ended up being sold in America for £2.98 when the rights were for Europe, I wouldn't mind. The stock has been sold legit, they are not counterfeit and the brand is selling well and getting world-wide exposure.

    There is no sentiment in business, if it's purchased legit and isn't counterfeit then of-course the companies wont care and will just sweep it under the rug.

    James.
    1711 likes this.
  13. Beauty Wonderland

    Beauty Wonderland

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    Re: Importing 'Gray' Goods & Definition!

    The issue is with products (including beauty products) imported from outside the E.U. Within the E.U. there is no problem whatsoever. If they are from outside the E.U. the company whose brand it is can take you to court and, based on test cases in the last number of years, they would win.

    Many companies don't seem to mind their products being imported from outside E.U., others do object. There was a time when L'oreal and Lancome were contacting a lot of ebay sellers demanding to see copies of their invoices for the products they were selling and generally being legally threatening. They even took ebay themselves to court for allowing illegal or counterfeit sales on their trading platform. They won on some points of the case, but not actually on the basis that the goods were counterfeit, they were all found to be genuine, but on the basis that some were imported from outside the E.U..


    Now, if you list a product from one of these companies on ebay that can be identified as the U.S. version for example, the listing will get pulled.
    Another point that came up in this case that had been a very grey area (excuse the pun!) was that the resale of tester and sample products was found to be unallowable and since then these products are ostensibly not allowed on ebay (although there are plenty of them, just not with the word sample or tester in the title or listing which would lead to them getting pulled, selleres just word it differently!)

    As I said, some companies don't seem to care (like Smashbox, Stila) others do (Estee Lauder, Clinique, MAC, all owned by same company anyway, also Lancome) but they seem to have gone quiet in recent years, perhaps recognising the futility of either trying to handle every small seller of their products and the court costs involved, or trying to handle ebay etc. Or, perhaps they just realised that the products are getting onto the market somehow and are concentrating more on leaks in their distribution systems.
    1711 likes this.
  14. jennyembleton

    jennyembleton

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    Re: Importing 'Gray' Goods & Definition!

    yes indeed some of my products are from outside the eu... so recently i have been concentrating on finding uk suppliers. But like you say... I hope that they are concentrating on the leaks in their distribution system... rather than punishing the innocent sellers. Until recently I had absolutely no idea that what i was doing was in the least bit 'wrong.' And yes for some reason it seems to be EL companies who are most bothered. What puzzles me is how large companies like 'strawberry net' are getting away with it... because from researching i am sure that some of their stock is grey market. It seems so unfair... because most of the products i sell are discontinued/ltd edition items... not items that can be bought from mac/clinique at this time - so should not be affecting their sales. Do you think that a small seller such as myself could be taken to court??? this really worries me... or would they just pull the listings?






  15. Beauty Wonderland

    Beauty Wonderland

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    Re: Importing 'Gray' Goods & Definition!

    Yes, strawberry.nets stock is grey market, however they are outside the E.U. so the laws about grey imports into the E.U. do not apply
  16. VeryMark

    VeryMark

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    Re: Importing 'Gray' Goods & Definition!

    "Gray goods" (or "grey goods") is often used as another term for parallel imports or, more vaguely, goods that have not reached the market through the regular channels.

    The main requirement is that the goods must have been placed on the open market in the EEA in the first place by the brand owner or with their consent - the EEA being the EU plus the old EFTA countries, Norway, Switzerland and Liechtenstein, plus in practice Switzerland. If the goods don't meet this condition, you can face action for trade mark infringement.

    That means in practice that for example you can't legitimately sell Tommy Hilfiger clothing imported directly from the USA, even if it's perfectly genuine, unless Tommy Hilfiger themselves sold it to you knowing you were going to resell in the UK ...... and anything bought from China is almost certainly a no-no unfortunately even if it comes out of the factory that the brand owner uses. You also can't sell perfume testers on the open market as they are only distributed on the condition that they cannot be sold.

    There is also a possibility that a luxury brand can take action for trade mark infringement if their goods are sold in a way that they can claim affects the luxury aura of the brand and hence the quality of the goods - L'Oreal for example have been undertaking a big cease-and-desist letter writing campaign against anybody selling their perfume via e.g. eBay, though with what legal force remains to be seen.

    I hope this helps.
  17. denzil2011

    denzil2011

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    Re: Importing 'Gray' Goods & Definition!

    Be aware that companies such as Apple and Sony have been working with customs and excise,trading standards,the european commission and their legal teams as part of a huge investigation in which they hope for a clear up of unauthorised sellers who they claim are tarnishing their brand names.
    I was told they expect to start 'raiding premises' in the next few weeks including britain,france,spain,germany,holland and denmark.Apparently a lot of these people use 24/7 storage lock-ups for the products and use a mail drop for their company address.
  18. cpc

    cpc

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    Re: Importing 'Gray' Goods & Definition!

    This is A good Topic.... I sell few cosmetics items on ebay myself. When listing on ebay.de this is the disclaimer we get .

    Google translation:Important Notice to Seller:

    Note to the offering of perfumes and cosmetics

    Please ensure that your offer or change any copyright, trademark or other intellectual property rights by right holders injured.

    Any use of a protected brand name in a range in which no products of that brand name are offered is not allowed. This includes the offering of odor same perfume and fragrance imitations with reference includes a perfume brand.

    The provider of test, demonstration or demonstration products violates eBay policy.

    New original cosmetic products may be sold only in their original equipment on eBay. To avoid trademark disputes with rights holders, the offer of a new perfume and cosmetic products without the original packaging or cover cap on eBay is prohibited.

    Ifyou want to to offer any of the above article, pleaseunderstand the message as general information.

    Click here to see the principle of perfume and cosmetics.

    For more information on prohibited, questionable, or infringing the rights of third parties references, see: http://pages.ebay.de/help/policies/items-ov.html.

    Violations can lead to exclusion from trading on eBay.

    Please check your listing and make sure that this does not contradict the above principles.

    Wichtiger Hinweis für Verkäufer:

    Hinweis für das Anbieten von Parfums und Kosmetikprodukten

    Bitte versichern Sie sich, dass Ihr Angebot keine Urheberrechte, Markenrechte oder andere Schutzrechte von Rechtinhabern verletzt.

    Jede Verwendung eines geschützten Markennamens in einem Angebot, in dem keine Produkte des genannten Markennamens angeboten werden, ist nicht erlaubt. Dies umfasst auch das Anbieten von geruchsgleichen Parfums und Duftimitaten mit Bezugnahme auf ein Markenparfum.

    Das Anbieten von Testern, Vorführ- oder Demonstrationsprodukte verstößt gegen die eBay-Grundsätze.

    Neue Originalkosmetikprodukte dürfen bei eBay nur in ihrer Originalausstattung vertrieben werden. Um markenrechtlichen Auseinandersetzungen mit Rechteinhabern vorzubeugen, ist das Anbieten von neuen Parfums oder Kosmetikprodukten ohne Originalverpackung oder Deckkappe bei eBay daher untersagt.

    Wenn Sie keinen der genannten Artikel anbieten möchten, verstehen Sie diesen Hinweis bitte als allgemeine Information.

    Klicken Sie hier, um den Grundsatz zu Parfum und Kosmetik aufzurufen.

    Weitere Informationen zu verbotenen, fragwürdigen oder die Rechte Dritter verletzenden Artikeln finden Sie unter: http://pages.ebay.de/help/policies/items-ov.html.

    Verstöße können zum Ausschluss vom Handel bei eBay führen.

    Bitte prüfen Sie Ihr Angebot und stellen Sie sicher, dass dieses nicht den oben genannten Grundsätzen widerspricht.
  19. VeryMark

    VeryMark

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    Re: Importing 'Gray' Goods & Definition!

    I was at a major anti-counterfeiting conference in London last Thursday, and it was interesting to note who is spending a lot of time and money on stopping piracy - GHD Hair Straighteners, Links of London, HSBC, UBS, IFPI etc.

    Stopping piracy has become a very sophisticated operation, and largely automated in some cases - understandable when you consider that the top 30 brands each have 10K cybersquatted domains on average per brand.

    The biggest challenge is now mobile - by 2015, more people will access the internet via a mobile connection/portable device than a desktop pc.
  20. 1711

    1711

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    Very good insights!
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