What is the overall impact of the Gray Market and counterfeit products on Manufacturers?
First, there are the multiple customer satisfaction issues resulting from counterfeit products and gray marketing. Anytime products are purchased outside the authorized distribution channel, there is risk that the customer is buying counterfeit or substandard products, including products that may have been altered in some way, or used products represented as new. Further, gray market products can be mishandled or damaged during multiple shipments all around the world, which would cause additional customer satisfaction issues. Manufacturers cannot protect against mishandling when the product leaves the authorized channel. Second, gray market and counterfeit products entering the market place result in shadow inventory that is not visible to manufacturers, thus making it difficult to forecast accurately. Third, the existence of counterfeit products can cause a decrease in the demand for your genuine product as customers and the channel are unsure of ways to guarantee they are purchasing
