Thinking of Buying Grey Market? Not the Best Idea.

June 2nd, 2018 by Jennifer Lough

Attention, people in charge of buying things. If you’re anything like me, a large contributor to whether or not you’re going to purchase something is the price. However, if the cost of something is surprisingly low, you should look into the reason it’s so low. Simply put, if it seems too good to be true, it probably is. For example, when someone smashes the front end of a 2017 luxury car and has it rebuilt, the value of the car is far lower than the value of an unwrecked, otherwise identical car. Similarly, a product from one company that’s significantly cheaper than the same product from the official distributor or manufacturer will likely be a low price for a reason. This is where the grey market comes in.

The grey market involves selling goods legally, but their original manufacturer does not support them with software updates or a warranty.  This contrasts with the black market, which consists of illegal transactions. Practically applied, this means that you can buy a product from an unauthorized (or unofficial) seller. However, the manufacturer does not have to honor the warranty or offer support services. In some cases a person will buy the product from the manufacturer and then increase the price for resale. Many other cases involve the reseller dropping the price because he saves money by not offering a warranty or support.

Up front, this saves the buyer (you) money, but it can be expensive in the long run. A product could have been pre-owned and used, and it’s possible that it will ship with malware. Essentially, you might find that you can buy something on the cheap; however, the purchase is very high-risk. Bottom line: Sometimes a low price is a red flag. It is advantageous to spend more up front to get the product from an authorized seller. Ultimately, you don’t want to have to spend money down the line to fix potential issues from grey market purchases.