Manufacturers push the term "gray market" to imply that resold goods are somehow bad and people who sell them are participating in something like an illegal black market. Reselling equipment is a normal part of doing business. There's nothing gray about it.
There is no separate market for new products that have been bought from manufacturers and resold. It's just one market. We don't need to refer to something that doesn't exist, so we don't need a special term for it.
The term "gray market" is linguistic manipulation to benefit manufacturers at the expense of customers, society, and the environment. Let's stop using the term.
For products that have been used, we have a "second-hand market".
In Europe there is indeed a market for new products that have been bought from manufacturers and resold right away, that's what's called a grey market. This happens because suppliers tend to use different pricing in countries with a different purchasing power, in order to extract more consumer surplus.
It's not uncommon that if you buy the cheapest product in a webshop in Northern Europe you will find it has a Polish user manual when it arrives. It's not illegal to do that (although suppliers would probably like it to be).
The same happens with servers, just compare USD and EUR prices on the Dell website.
It should not be considered a grey market. But it should be considered illegal to grossly vary prices inside the EU region. It's an extremely anti consumer practice and all it does is, as you say, extract more money from the consumers.
There actually are rules that say you cannot charge different prices depending on the location of the buyer, but suppliers trivially manage to circumvent that by making a tiny change and giving it a different SKU.
Although I understand the sentiment, I'm not sure I would like additional legislation to try to prevent that. Even if you do manage to make that water tight the end result will probably mean higher prices for the consumers in countries with low purchasing power.
At no point will the manufacture or distributers sell at a loss unless it's for strategical reasons. Perhaps the prices will go up in the countries with lower purchasing power, but it's bound to go down in the countries with higher purchasing power. That may or may not be intentional, but it's clearly possible to sell it at the low price, so they could just do that.
It is called arbitrage in finance if i recall right.
And what should be illegal is pricing things with such huge differences between regions in same market, or have the same brand's product have grossly different quality/composition between regions.
You use your brand, widely known, to sell inferior product for cheap. I would call it an 'official' counterfeit. Worst case - some of those inferior products were sold at higher markup!
Merrian-Webster: a market employing irregular but not illegal methods especially : a market that legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer https://www.merriam-webster.com/dictionary/gray%20market
Investopedia: A grey market is a market in which goods have been manufactured by or with the consent of the brand owner but are sold outside of the brand owner's approved distribution channels—an activity that can be perfectly legal. In the securities markets, a grey market is a market wherein a company's shares are traded before they are issued in an initial public offering (IPO). https://www.investopedia.com/terms/g/greymarket.asp
Wikipedia: A grey or gray market (sometimes confused with the similar term "parallel market")[1][2] refers to the trade of a commodity through distribution channels that are not authorized by the original manufacturer or trade mark proprietor. Grey market products (grey goods) are products traded outside the authorized manufacturer's channel. https://en.wikipedia.org/wiki/Grey_market
Conclusion: Grey market seems to be the correct term.
The question is not "Does the term grey market have a meaning?" the question posed was "Is the use of the term perpetuating an unhealthy view of commerce to advantage manufacturers?".
After you've been sold a product, the manufacturer has no authority on how you use it or where you resell it. Since the manufacturer doesn't have this authority they you can't be legally circumenvting authorized channels when reselling it.
I concur. If I bought a camera lens in New York and it came with a Malaysian manual and a warranty that's not valid in the US, but it's a genuine Canon lens, that's gray market.
But if I buy a similar lens from the camera shop down the street, and it was originally sold in the US and the warranty is still valid in the US etc, it's a USED lens or a second-hand lens, but there's nothing gray-market about it.
I think you're spot-on here; sources quoted in the article are misusing the term gray-market to simply refer to second-hand parts, which are something completely different. They want to make pre-owned parts sound just as shady, but the're not -- the first-sale doctrine would like a word.
How do you know this? More to the point, how does an amateur buying their first lens ever know this?
My friends and I used to buy surprisingly good deal products on Craigslist and see how long it took to determine if they were fakes or broken. It was always one or the other.
I've found a reputable local shop that I trust. In addition to a lot of new stuff, they sell used gear (possibly on consignment?), which means they've got some experts who'll do valuation on it. They have a largely professional clientele and a reputation to uphold, so I think they're trustworthy.
I'm sure I could take a lens to them and have it checked out for a few bucks, or have them broker a sale between me and another private party. Knowing what I'm getting has its own value, and I'm not opposed to paying someone for their time and expertise.
tl;dr: I don't, personally, know that. I trust someone else to know that.
> After you've been sold a product, the manufacturer has no authority on how you use it or where you resell it.
Unfortunately, this idea is not as settled as you make it sound (around the world). Even in the US, it still pops up - in 2019 SCOTUS heard a case on cheap imported college text books.
Additionally, manufacturers have latitude on who they sell to, and to sign contracts with those intermediaries.
The use and definition of the term is completely descriptive and accurate. You are projecting some normative and negativity towards good descriptive term.
To show how absurd this subjective projected pejorativity is, lets use it to 'second hand':
>The question is not "Does the term second hand market have a meaning?" the question posed was "Is the use of the term perpetuating an unhealthy view of commerce to advantage manufacturers?".
>There is nothing "second" about selling used products.
Grey markets might not be a real, standalone market, but they do describe real side-effects of a non-conventional supply chain.
Take grey market cameras. They're are often bought as kits from Asian markets, broken up into lenses and camera bodies and sold on "as new" in western markets but with no support direct from eg Nikon if it goes wrong. Warranty support is from the reseller only. They may ship your unit back to China for support, or repair/replace it at their cost.
So no, these are important differences for customers to recognise. Let's keep using it.
> they do describe real side-effects of a non-conventional supply chain.
Thats just the thing they don't there is nothing unconventional about suppliers acting as middlemen and setting their own price. To pretend this is a problem is unconventional and anti consumer.
No, that's not fair. Most of the products that get imported this way also have local service centres that fulfil warranty claims. The labour is more expensive and often part of a different regional company than the import or manufacturer.
I wouldn't import a Ford truck from the US and expect a local Ford garage to meet its warranty obligations here in the UK.
There are extraordinary things to consider for the consumer.
A label like "grey market" helps. It's not a slight. It's just quicker and easier than saying "this was imported from a distribution channel in another country and will only be serviced in that country".
>Manufacturers push the term "gray market" to imply that resold goods are somehow bad [...] The term "gray market" is linguistic manipulation to benefit manufacturers at the expense of customers, society, and the environment. Let's stop using the term.
From my experience reading manufacturers' warnings[1] about this, they never use the phrase "gray market" because a lot of consumers don't understand what that terminology means. It's more that the dealers/retailers and some savvy consumers use the phrase "grey market".
There is a category of _new_ (not used) products that have the following attributes:
- sold by unauthorized dealer : i.e. no contractual relationship with the original manufacturer to buy from them and then resell the item
- sold without a manufacturer's warranty : any warranty must be honored by the unauthorized reseller or some other 3rd party or comes with no warranty at all
So instead of the cumbersome long-winded hyphenated term of "unauthorized-retailer-and-no-manufacturer-warranty market", the industry just shortens it to "gray market". It's a useful label of what the product is. You're right, it's not unlawful or unethical to sell unauthorized/unwarranted merchandise as long you inform the customers.
E.g. Most of the luxury watches sold on amazon.com (Cartier, Rolex, etc) are "gray market" because they don't come with manufacturer's warranty. If you buy a Cartier watch from Amazon[2] to save money and it's broken and needs repair, you can't take it into a Cartier retailer at the mall to have them fix it. There's nothing wrong with it as long as customers understand the tradeoffs of lower price vs service convenience. Even though the watches are genuine instead of counterfeit, they don't come with manufacturer's documentation to get factory-authorized service.
>In places with decent consumer protection laws (like California), manufacturers must honor warranties regardless of who you bought the product from.
This is incorrect, and you're unintentionally spreading misinformation. California law specifically uses the term "grey market" and manufacturers do not have to honor warranties of products purchases through unauthorized channels as long as it is disclosed to the consumer. See the actual text of the law:
http://leginfo.legislature.ca.gov/faces/codes_displayText.xh....
>The term "unauthorized dealer" is another word to stop using.
I think you're too focused on words instead of the underlying behavior. Even if we outlawed the phrase "unauthorized", you still have the reality of manufacturers refusing to enter wholesaler contracts with any dealer. You'd still need an alternative word to describe a dealer that sells products without a contract to purchase directly from the manufacturer. Whether we use a cumbersome multi-hyphenated phrase or come up with alternative jargon to avoid the word "unauthorized" ... the reality still remains that manufacturers will not enter into buy/sell contracts with every dealer.
Some savvy and sophisticated consumers will want to know if dealer X doesn't have a direct relationship with the manufacturer as part of the purchasing decision. You don't like the word "unauthorized". Ok, that's fine. But what alternative label do you propose for that non-existent relationship?
That law explains how an item that was not originally sold in the US can have no US warranty at all, for anyone.
So the claim that "manufacturers must honor warranties regardless of who you bought the product from" is still true. If it ever had a US warranty, that warranty will not be invalidated by any selling or reselling.
>That law explains how an item that was not originally sold in the US can have no US warranty at all, for anyone.
The law is not about what wasn't originally sold in the USA. Instead, it's specifically defines "grey market" imports and the whole purpose of the following text is for resellers to disclose the product's grey market status to inform the buyer. The California law does allow for resellers to "hide" the grey market status only if the reseller (not the manufacturer) has a "reseller warranty" equal to or better than the manufacturer's warranty.
>So the claim that "manufacturers must honor warranties regardless of who you bought the product from" is still true.
No it isn't. Please read section 1797.81 again carefully.
Read the actual text excerpt:
"1797.81 (a)(1) The item is not covered by a manufacturer’s express written warranty valid in the United States "
I.e. You can't buy Nikon/Canon grey market cameras or Cartier grey market watches in California and force the manufacturers to honor the warranty. California law does not force this.
>If it ever had a US warranty, that warranty will not be invalidated by any selling or reselling.
You're inadvertently trying to say something else here but it's missing a word. I will correct your statement to be: "If it ever had a [VALID] US warranty, that warranty will not be invalidated by any selling or reselling."
The "grey market" products such as cameras/pianos/watches through side channels never had a valid US warranty in the first place.
>But the "grey market" that we're talking about with AMD processors [...] You're using a much narrower definition that doesn't fit this entire conversation.
I thought mleonhard was making a general statement about "grey market" outside of these specific AMD chips.
> The law is not about what wasn't originally sold in the USA. Instead, it's specifically defines "grey market" imports and the whole purpose of the following text is for resellers to disclose the product's grey market status to inform the buyer.
That's what I'm trying to say. This law only applies when there are distributors or other parties that were sold the product outside the US and import it into the US.
> Read the actual text excerpt: "1797.81 (a)(1) The item is not covered by a manufacturer’s express written warranty valid in the United States "
That text excerpt says that if a product meets that criteria, it must have a label stating so. It doesn't say when that happens. "Every retail seller who offers grey market goods for sale shall post a conspicuous sign at the product’s point of display and affix to the product or its package a conspicuous ticket, label, or tag disclosing any or all of the following, whichever is applicable"
> You're inadvertently trying to say something else here but it's missing a word. I will correct your statement to be: "If it ever had a [VALID] US warranty, that warranty will not be invalidated by any selling or reselling."
Okay, I guess? I would say that an "invalid warranty" is not in fact a warranty, so the use of the word "valid" is redundant. But pretend I said "valid" if you want.
> The "grey market" products such as cameras/pianos/watches through side channels never had a valid US warranty in the first place.
But the "grey market" that we're talking about with AMD processors is largely composed of products that were sold in the US, with a valid US warranty, that are now being sold off later. You're using a much narrower definition that doesn't fit this entire conversation.
Thanks for putting in the effort to check my comment.
I'm not a lawyer. I read through the rest of the California consumer warranty laws and some of the Uniform Commercial Code which California also uses. A warranty goes with a product. It does not matter which company sold the product. A manufacturer cannot refuse to honor a warranty just because it doesn't like the reseller who issued the receipt.
The California law you linked applies to products that were originally sold outside USA. International trade is complicated. That law tries to protect buyers from confusing different products that have the same name. It has an important caveat at the top:
"(1) The item is not covered by a manufacturer’s express written warranty valid in the United States (however, any implied warranty provided by law still exists)."
Implied warranties are made by law. Express warranties are made by manufacturers & resellers and provided in writing to buyers. Even if a foreign-purchased product is sold in the USA with no US express warranty, it still has implied warranties.
>The California law you linked applies to products that were originally sold outside USA.
Neither sections "1797.8. (a)" nor section "1797.81. (a)(1)" talks about products "originally sold outside the USA"
The law talks about _imports_ and not what was _sold_in_foreign_country_. The law then further defines that some imports are considered "grey market".
Using the phrase "originally sold outside the USA" that's not even there in the text of the law is copying the same mistake that Dylan16807 made.
>A manufacturer cannot refuse to honor a warranty just because it doesn't like the reseller who issued the receipt.
I'm not sure why you believe this? I can't find any court case that forces manufacturer to honor a warranty when it is purchased from unauthorized resellers.
>Implied warranties are made by law. [...], it still has implied warranties.
Disclaimers will look similar to the following text: "SELLER MAKES NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE. NOR IS THERE ANY OTHER EXPRESS OR IMPLIED WARRANTY."
(I'm sure everyone has seen that verbage before but never really paid attention to it because what most people care about is the manufacturer's warranty.)
Generally this is a reference related with channel partners, who are usually contractually restricted from selling used products or selling new products to other companies that intend to resell the product.
For end customers, it is fine, except that enrolling in a new support contract from the manufacturer many have conditions or not be possible.
There is no separate market for new products that have been bought from manufacturers and resold. It's just one market. We don't need to refer to something that doesn't exist, so we don't need a special term for it.
The term "gray market" is linguistic manipulation to benefit manufacturers at the expense of customers, society, and the environment. Let's stop using the term.
For products that have been used, we have a "second-hand market".