Grey market: why it’s not worth the risk for resellers

In May 2016, print vendor Kyocera launched a campaign to educate consumers on the risks of buying counterfeit gear. The company described “a concerning rise in the scale of the problem” of so-called ‘grey market’ products after seizing fraudulent goods worth in excess €5m in April 2016 alone.

But it’s not just consumers who should be concerned; the grey market should be of huge concern to print retailers, resellers and managed print service providers.

The term ‘grey market’ refers to when products destined for certain countries are diverted to countries where they are not licensed, and are then sold on to the consumer at a lower price. Unsurprisingly, the distribution and sale of counterfeit goods is a criminal offence, and print suppliers have been prosecuted for the practice.

However, counterfeit products are often difficult to spot, so as a print dealer, reseller or managed print services provider, you should keep a lookout for any goods that don’t have the manufacturer’s own labelling or being hawked at an unrealistically low price.

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Analyst firm Context says the majority of channel firms questioned in a recent survey (68 percent) believe print vendors aren’t doing enough to stop grey market products entering the market – with a quarter claiming “a lot more” could be done.

Interestingly, more than half (59 percent) claimed the channel itself could do more.

Meanwhile, 55 percent of resellers believed it was easy for them to tell the difference between a real and a fake ink cartridge, but just 15 percent said the same was true for their customers.

They called for better packaging of products, with nearly three-quarters (74 percent) arguing that clear labelling for any remanufactured and legal compatibles would help the fight against grey market goods.

So what else can be done about the distribution of dodgy print supplies in the channel?

Well, there have been recent developments on the anti-counterfeiting technology front. US company Eapeiron, for example, has developed a new encryption technology that allows companies to mark their products using a form of invisible ink that can be scanned at any point in its journey, enabling them to track their products throughout the supply chain.

In addition, the Imaging Consumables Coalition of Europe, Middle East and Africa (ICCE), a non-profit making organisation comprising the leading print manufacturers, was formed as a direct response to the increase in counterfeit consumables across the region. Its activities include coordinating intelligence, initiating joint industry raids and helping its members to pursue counterfeiters through the criminal and civil courts.

The ICCE advises resellers to always be vigilant and consider the possibility of counterfeit cartridges. If there is any doubt, check directly with the manufacturer – a number of print vendors have developed authentication devices and systems that allow the reseller to check if the product may be counterfeit – or contact the ICCE to report your suspicions.

“We would always advise to be very careful when buying from anyone who is not your standard supplier or when you are being offered reduced price products which have been allegedly sourced from production overruns, obsolete stock, liquidations or ‘cheaper’ product from elsewhere in the world,” says the organisation.

Your business as a reseller depends on your reputation for delivering reputable products and services. Remember: if it sounds too good to be true, it usually is.