Recognize a gray market immediately

Gray Market Control

A major challenge for many brand owners is the unauthorized flow of goods, which is partly caused by distribution partners.

The traders' approach is based on arbitrage transactions. This means that traders use parallel/re-import to exploit price differentiation in different sales markets by selling products past the official distribution channels. In doing so, the dealer is able to significantly undercut the manufacturer's fixed prices. A gray market is created - prices and sales in legal distribution are under pressure.

Without an analysis of the flow of goods, the manufacturer would notice this problem, if at all, only with falling prices and sales figures. In order to prevent unauthorized goods flows and to ensure price compliance, manufacturers must analyze the flow of their products.

How can a gray market be analyzed efficiently?

There are various implementation options for a gray market analysis that are more or less suitable.

Mystery Shopping

One conceivable method would be the so-called mystery shopping. Inspectors make test purchases of their own products in different sales markets and try to analyze preceding distribution channels afterwards. It is obvious that this procedure is extremely costly and inefficient, since a representative sample is very difficult to achieve.

Track and Trace

An alternative is track and trace procedure. Here, the focus is on monitoring along the entire logistics process. For a meaningful and representative evaluation, an inspection must therefore be carried out at every possible station in the process. This, however, first requires data collection from each individual participant, including all business partners in distribution. In a heterogeneous sales structure with different partners, a timely data exchange is therefore difficult.


For these reasons, an end-to-end review with the customer is extremely useful for efficient data collection. This requires a clear identification of the products. With the help of a unique and tamper-proof serialization by the manufacturer, the customer can check the product over the Internet on Check Authenticity. This test provides the manufacturer with information about the test location. Thanks to the built-in geolocation and alarm function, it is possible to define exactly which products are intended for which market. Every test or authentication outside the target market triggers - unnoticed by the end customer - a notification with position information for the manufacturer.

The advantage of end-to-end verification from manufacturer to customer is obvious: with little effort a representative and efficient analysis can be carried out. The large number of tests that can be expected as a result gives a much clearer picture than spot checks using other methods.