Grey market


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The grey market refers to the flow of new goods through distribution channels other than those authorized or intended by the manufacturer or producer. Only new products fall under the legal, accepted definition of grey market.

Unlike those on the black market, grey market goods are not illegal. Instead, they are being sold outside of normal distribution channels by companies which may have no relationship with the producer of the goods. Frequently this form of parallel import occurs when the price of an item is significantly higher in one country than another. This situation commonly occurs with cigarettes and electronic equipment such as cameras. Entrepreneurs buy the product where it is available cheaply, often at retail but sometimes at wholesale, import it legally to the target market and sell it at a price which provides a profit but which is below the normal market price there.

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