Page 5 - Simply Electronics Teaching Guide
P. 5
Manufacturers have to be aware of this changing market
dynamic and appreciate the fundamental change which is
placing extreme pressure on their supply chain and
existing business model. How they respond to this
pressure is critical to their survival.
Manufacturers however, are not the only stakeholders
who are feeling the impact of the Grey Market,
consumers are also experiencing change which requires
them to be more vigilant in their online dealings.
1: For many industrial goods, after-sale service is a
prime source of revenue and earnings, often yielding
a much higher margin than the sale itself. A gray
market, however, tends to trigger unbundling of
product sales from service income, causing an
eventual drain on the product’s revenue stream.
2: A gray market can create customer dissatisfaction.
While caveat emptor might seem to be the right
attitude toward buyers of gray market goods, many
manufacturers find that product problems
nonetheless are ultimately laid at their doorstep.
3: A gray market often reflects the maturation of a
product in its life cycle. As customers become familiar
with a product category, they tend to place less value
