How Printers Can Fight Brand Thievery

Diversion also jeopardizes the integrity of the supply chain itself. Local distributors are forced to compete with artificially lowered prices and increased supply by gray market activity. Considered a fraudulent means of inflating profits for participating distributors, gray marketers capitalize on surplus inventory, lower manufacturing costs, fluctuating distribution costs, economic conditions, and currency exchange rates, by exporting goods without the permission of brand owners. The gray marketers then undercut the prices of authorized domestic distributors by selling at lower price points or selling large inventories to meet demand, while achieving similar or higher profit margins due to the lower cost of product acquisition in the originating countries.