Overcome the gray market grief

When we talk to brands about their concerns, they often mention something to do with "gray market" goods, meaning low-quality knock-offs of their products, counterfeits, or unauthorized resellers. Fair enough. How are you supposed to stay afloat when you're being undercut, especially with your own products? Sadly, there is no general solution to this sort of problem, but there are some helpful tactics to keep in mind.

In some ways, unauthorized resellers are the easiest type of gray market problem to handle. Unlike counterfeiters or low-quality imitators, unauthorized resellers are at least dealing in genuine products. This means the issue is primarily one of distribution control rather than authenticity or design. We recommend managing your distribution agreements carefully, implementing strict policies about who can sell your products and where, and limiting your sellers only to those who can maintain your high standards. Specifically, we recommend setting a MAP ("Minimum Advertised Price") policy and aggressively enforcing it against violators. On Amazon, make sure to begin with Brand Registry and consider further steps, like Brand Gating, if necessary.

Fighting counterfeiters can be more challenging. Amazon offers some special programs specifically for combatting counterfeits. Transparency allows you to add unique codes to your products which, when scanned, codes confirm the item's authenticity to both Amazon and customers. Project Zero, meanwhile, gives you the ability to directly remove counterfeit listings without requiring Amazon to intervene. And implementing packaging features like holograms or QR codes not only make counterfeiting more challenging, but also help educate customers on how they can identify genuine goods and add a certain mark of quality to boot. We've even seen a simple product seal make a difference.

When it comes to the low-quality imitators, the battle can extend beyond the market itself, out to the realm of product design and brand positioning. Focus on continuous innovation to stay ahead of imitators. Emphasize unique features or materials that are difficult to replicate cheaply. Build a strong brand story and community around your products, fostering customer loyalty that transcends price comparisons. Doing all of this is easier said than done. But the truth, perhaps difficult to swallow, is that you must adapt or sooner or later you'll be copied.

We've found over time that overcoming gray market challenges is a process that never stops. There's no easy alternative to staying vigilant, adapting your strategies when called to do so, and focusing on building a brand that stands out for its overall value proposition. As you might expect, ultimately the best defense is a strong offense: create products that simply can't be replicated.