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View Full Version : What does "grey market" mean exactly?



EAP
03-05-2005, 11:14 PM
I keep hearing this term, but out of curiousity, what does it mean, exactly?

ktixx
03-05-2005, 11:42 PM
Grey market means that the camera or product is sold in the US but it is not meant to be sold in the US. Basically Grey market cameras are sold at too good to be true prices. They rarely include more than the body (IE: no cables, no battery, no charger) and never include a Manufacter's warranty. The products are usually sold by shaddy dealers (Terrible customer ratings) who are not certified by the manufacterer to sell the product. One of the many companies that are like this is www.royalcamera.com. If you add up the cost of the extra accessories ($150 approx) it is possible to save money, however the hassel of dealing with these shaddy companies is usually not worth it. There are circumstances where the term Grey market isn't a bad thing. B&H out of NYC ( www.bhphotovideo.com ) sells grey market lenses and other products (pretty sure they don't sell GM camera bodies). The difference between B&H and other sellers is that BH clearly label the product as being grey market (imported) and they provide you with a 1 yr warranty. Below is a quote from www.bhphotovideo.com (imported) (http://www.bhphotovideo.com/bnh/controller/home?O=productlist.jsp&A=getpage&Q=GreyMarketStatic.jsp) :

"Simply put, "grey market" means that the item is not covered by the manufacturer's warranty, because the manufacturer's licensed or authorized agent or representative did not import that item into the USA and did not sell it to the retailer to sell it to you. We import the product directly from the overseas manufacturer or distributor, bypassing additional distribution levels. Many manufacturers and distributors therefore coined the negative sounding term, "grey market", for this perfectly legal money-saving activity, namely "direct import"."

Ken

dwig
03-06-2005, 06:38 AM
I keep hearing this term, but out of curiousity, what does it mean, exactly?

In the camera industry, and many others, the manufacturer do not warrant their products and does not spend money advertising them. Both of those expenses are paid for by the distributers in the various market areas. In many cases, the distributers are wholely owned subsideraries of the manufacturer but not always. To use Nikon as an example, Nippon Kogaku makes the equipment and sells it to Nikon USA for marketing in the US and to some independent distributer for marketing in, say, Bangledesh. Nikon USA pays for all service and advertising in the US/Canada market as the Bangledesh distributer does in his market.

"Grey Market" occurs when the Bangledeshi distributer sells some of his goods to a retailer in the US. He knows he will never have any expense servicing these items and doesn't have any overhead for inventory, advertising, local distribution, ..., as he will just have a shipment from Japan diverted. He can sell it to the US retailer much cheaper than Nikon USA can. The product is perfectly sound, its not refurb's or "seconds".

The problem for the comsumer is that Nikon USA protects itself by not servicing the Grey Market product. They will only service a Bangledeshi serial number when you produce a legit Bangledeshi receipt showing you bought it in its appropriate market area. Nippon Kogaku's "World Wide Warranty" will kick in and Nippon Kogaku will act as a clearing house and credit Nikon USA for the work and debit the Bangledeshi distributer. The other way Nikon USA protects itself is by offering rebates instead of just lowering prices. This exposes the retailers that sell Grey products since their merchandise is not eligable for the rebates and the rebate process can detect the product's intended market area by its serial number and/or the UPC on the box. At times manufacturers use somewhat different model names in different markets to add to the distinction, e.g. Nikon N8008 vs F801. This helps the comsumer get the legit product and avoid the unpleasant surprise if they find they need service.