What is Grey Market?
Originally Posted by Z1 Performance
Another xample - for the longest time we brought in Work from Japan ourselves. The pricing was good, the supply was relatively adequate, and things went smoothly. Things reached a critical mass (in terms of the volume we were doing), and the official distributor (AKH) caught wind. They approached us, in a very professional manner, and we had a talk about why we were going direct, etc etc....Hence, we do our best to push their product, as we believe in it, use it, and we know they have our backs should any issue arise.
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Those are the channels we go through
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From: USA
Originally Posted by sean1967
If they are all forced to advertise the same price, it may as well be one single company.
This thread is not worth thinking about. I got the drift in the first page.
It's like what happened with the telephone companies, instead of 1 company making $$$$, it's now several companies making $$$$.
Andy, im sorry if it seems im personally attacking you in anyway, im not trying to do so, in my very first post i said that i will not comment on my opinions of the grey market because its more of a debate, i never said that it didn't have a negative impact on the market because im sure it does, but negative in the sense that it might change it, maybe change is good and tables will turn, this market does not make the culture, now does/will it have a negative impact on the culture? who knows? being negative to today's market does not equate to being morally wrong nor negative to the culture, people have different views on this and to say that their way of making a living is wrong isn't anyone's place to say, thats the very point that got me fired up. i've said all that i will every need to say on this thread, and to prevent any further misplaced or mistaken hate this will be my last post here
So after sitting back and letting the dust settle I decided to chime in a bit......I have been in the wholesale distribution end of the business for over 10 years...previous to Tuning Factory Inc.
Here is where some of the problems lay.
The US marekt is not the US market any longer, it is now a global market that can be directly affected by product that is sold in the US that is also sold in other countries.
For instance say Greddy sells a exhaust for 500 in the US but the Tiawanese market will only support a cost of 420 because the economic market can only justify that price (or there exchange rate is to there advantage against the US dollar) there well now someone in Taiwan says I am going to buy a container of these and send them to the US where I can now create a margin of $50 per unit(loss of $30 per unit for the shipping, duties, taxes, etc.), so what happens, Greddy sells the product and it gets to the US market now all the shops that buy Greddy products are having to compete with what may possibly be and untouchable price so who wins? The manufacturer and the person in taiwan that sold the parts into the US, the shipping company and the consumer because now he has the best deal in the world.
the sad this is this happens daily, because there is not global pricing policies set by any manufacter and there is not control of where product is sold or shipped to because all most manufacturers care about is selling product, not where it goes and how it is being sold.
Alot of manufacturers know this is going on, they may tell you they care but truthfully they don't or they would be serial numbering every part and buying them on the US side and track as to who the part was sold to and how it got here and from there some policing should be done to control or stop the grey market.
(THIS IS JUST ANOTHER EXAMPLE)BUT this doesn't ever really happen.....there are vendors on this forum that buy Volk wheels grey market and undercut the market to the point where people that are buying it from mackin can't compete even if they are buying at the deepest deal, and what does it do??? devalues the product, which sooner or later will destroy the market for there product and then they(Mackin and the Vendor) will sit back stratching there heads going why can't we sell anything and then also drive shops/vendors away from buying the product because it is unprofitable.
I am not saying that our industry is not greedy but back 15-20 years ago the average norm for margins was 25-30% and now it is around 10-18% if lucky, and for those that think that is a rediculous amount of money compare that to any other market and you will see that this is a joke of a margin to live on compared to 75% of other businesses out there.
It is true that things like this show who true businesses are and it leaves the "wannabe's" to the wayside.
In the same respect things like this is why so many businesses fail because either lack of funding or just can't be profitable because now a days anyone with some money can go to another country and buy product in volume and make some money or buy product in the US and just give it away because 1) they truly can't afford to sit on the product so they recoupe there funds ASAP or 2) they really can't afford the inventory that they have or would rather turn the product on a dime and be happy they made a dime instead of a quarter.
For instance I remember a few years back you could buy Apexi V-AFC's for 20-40 dollars less then what I could if I was buying 100 units at a time..........so come to find out all units were in Japanese and had been coming from overseas.....well the consumers that bought this part didnt have a clue till they needed to install it and what would they do call apexi or run down apexi's dealer list. Apexi wouldn't give tech support because it wasn't a US purchased part so they(the consumer) would run down the dealer list and call everyone under the sun to see if they could get some help, well like most any other business owner we would help but then it came down to "why am i giving tech support to someone that saw no value in buying the product from me because i was 20 bucks higher" well I understand some would see it as that is being a good person but some would see it as a loss of money.......and I can understand the mentality of let me find the best price which I do on occasion as well but I have also learned after to many times of buying stuff off ebay or grey market stuff that that added price may include that added value that down the road you may need or you may not.
Either way I think that it is sad that this has to be such a competitive market where as for years it wasn't nearly as bad as it has been. So do you blame non business minded business owners for buying and selling so cheap to dump product, do you blame grey market product and sellers of that product in the US or do you blame the consumer for wanting a product but is not willing to pay what within there own minds is a reasonable price for a part and how do they know what is a reasonable price for a product by what there wallet, credit card or bank account will allow??????
My father told me one thing when i told him how this industry is and he told me this "I want you to want into a grocery store one day, pick up a can of soup, take that soup up to the counter and say,"this can is priced at $1.20 but i think it is only worth .98 cents, will you sell it to me for that and see what they say!""
I have my own two of my own sayings "the human race as we know it is a huge plague and all it does it consume and destroy" comparing it to how we can take anything that is profitable and make it unprofitable with the snap of a finger and two when people ask me what I do for a living lately I have been telling them "I sell metal in bulk wholesalel"..........think about it.
this is just my 2 cents and all the companies i used were just examples nothing more.
Here is where some of the problems lay.
The US marekt is not the US market any longer, it is now a global market that can be directly affected by product that is sold in the US that is also sold in other countries.
For instance say Greddy sells a exhaust for 500 in the US but the Tiawanese market will only support a cost of 420 because the economic market can only justify that price (or there exchange rate is to there advantage against the US dollar) there well now someone in Taiwan says I am going to buy a container of these and send them to the US where I can now create a margin of $50 per unit(loss of $30 per unit for the shipping, duties, taxes, etc.), so what happens, Greddy sells the product and it gets to the US market now all the shops that buy Greddy products are having to compete with what may possibly be and untouchable price so who wins? The manufacturer and the person in taiwan that sold the parts into the US, the shipping company and the consumer because now he has the best deal in the world.
the sad this is this happens daily, because there is not global pricing policies set by any manufacter and there is not control of where product is sold or shipped to because all most manufacturers care about is selling product, not where it goes and how it is being sold.
Alot of manufacturers know this is going on, they may tell you they care but truthfully they don't or they would be serial numbering every part and buying them on the US side and track as to who the part was sold to and how it got here and from there some policing should be done to control or stop the grey market.
(THIS IS JUST ANOTHER EXAMPLE)BUT this doesn't ever really happen.....there are vendors on this forum that buy Volk wheels grey market and undercut the market to the point where people that are buying it from mackin can't compete even if they are buying at the deepest deal, and what does it do??? devalues the product, which sooner or later will destroy the market for there product and then they(Mackin and the Vendor) will sit back stratching there heads going why can't we sell anything and then also drive shops/vendors away from buying the product because it is unprofitable.
I am not saying that our industry is not greedy but back 15-20 years ago the average norm for margins was 25-30% and now it is around 10-18% if lucky, and for those that think that is a rediculous amount of money compare that to any other market and you will see that this is a joke of a margin to live on compared to 75% of other businesses out there.
It is true that things like this show who true businesses are and it leaves the "wannabe's" to the wayside.
In the same respect things like this is why so many businesses fail because either lack of funding or just can't be profitable because now a days anyone with some money can go to another country and buy product in volume and make some money or buy product in the US and just give it away because 1) they truly can't afford to sit on the product so they recoupe there funds ASAP or 2) they really can't afford the inventory that they have or would rather turn the product on a dime and be happy they made a dime instead of a quarter.
For instance I remember a few years back you could buy Apexi V-AFC's for 20-40 dollars less then what I could if I was buying 100 units at a time..........so come to find out all units were in Japanese and had been coming from overseas.....well the consumers that bought this part didnt have a clue till they needed to install it and what would they do call apexi or run down apexi's dealer list. Apexi wouldn't give tech support because it wasn't a US purchased part so they(the consumer) would run down the dealer list and call everyone under the sun to see if they could get some help, well like most any other business owner we would help but then it came down to "why am i giving tech support to someone that saw no value in buying the product from me because i was 20 bucks higher" well I understand some would see it as that is being a good person but some would see it as a loss of money.......and I can understand the mentality of let me find the best price which I do on occasion as well but I have also learned after to many times of buying stuff off ebay or grey market stuff that that added price may include that added value that down the road you may need or you may not.
Either way I think that it is sad that this has to be such a competitive market where as for years it wasn't nearly as bad as it has been. So do you blame non business minded business owners for buying and selling so cheap to dump product, do you blame grey market product and sellers of that product in the US or do you blame the consumer for wanting a product but is not willing to pay what within there own minds is a reasonable price for a part and how do they know what is a reasonable price for a product by what there wallet, credit card or bank account will allow??????
My father told me one thing when i told him how this industry is and he told me this "I want you to want into a grocery store one day, pick up a can of soup, take that soup up to the counter and say,"this can is priced at $1.20 but i think it is only worth .98 cents, will you sell it to me for that and see what they say!""
I have my own two of my own sayings "the human race as we know it is a huge plague and all it does it consume and destroy" comparing it to how we can take anything that is profitable and make it unprofitable with the snap of a finger and two when people ask me what I do for a living lately I have been telling them "I sell metal in bulk wholesalel"..........think about it.
this is just my 2 cents and all the companies i used were just examples nothing more.
It would be nice if there was a set standard of pricing, like in a gorcery store. thing is, no matter how you advertise, or what pricing you advertise, customers in our industry are more keen on saving a buck and price compare everywhere and everything. so pricing of a particular product is not set in stone accross the board. this is why people become gray marketers, there's an advantage for THEM to do so, untilthe market is turned around.
As i said in another one of my posts, gray markets flucate, and eventually both sides of the coin will flip flop. Then someone from our side of the coin will see this and do the same thing..... (speaking not of this industry but of the american market vs foreign in general ).
Being in the industry for a long time now, I can say that it's hard to make sales when put up against these types of odds, but look at all of us posting on here.... all of us vendors etc..
we're obviously still around for a reason... we've adapted. as time goes on, the industry will also change and adapt. What we're talking about is only a very small, tiny portion of international marketing and business. perhaps in time laws may change to accomodate these issues? It's hard to say, theres so so much more behind everything for all industries, that creating a simple law to combat things like gray marketing may have negative effects in other parts of international trade.
Its hard to set a specific structure for our industry partially because of the legalities involved. Would a manufacturer want to sell their parts, of course. does it matter where? no. it's hard to control what a buyer does with the product after that point, and is it legal for a company to step in after the fact? I think that the international business climate is so volotile and fluctates so much, that laws, rights, etc.. have yet to catch up on how to deal with things like this..... Because then it would not be just affecting this industry, it would affect EVERYTHING from your TV, to clothes, to food.....
Then you get into the whole question of if a government should step in at all to regulate these things, since that might be going against certain open trade laws or open capitalist ideals etc....
I don't have an answer, because i do not think one exists yet. It sucks to compete against these issues, but it's also hard to come up with a solution that doesn't negatively effect something along the way...
but a large portion of this does rest with the end consumer... is it worth an extra $20 for a product if you get the english version so that u know how to use it properly? I'd say yes, but that's just me. some don't think this way...
But a small amount such as this, is one thing. If a person can buy say a suspension setup for $1K instead of $1800, that's a HUGE difference.... in a case such as this, then the manufacturer would be at fault for not pricing the product properly on an international basis.... I don't have any specifics in mind here, just a hypothetical example to illustrate.
As i said in another one of my posts, gray markets flucate, and eventually both sides of the coin will flip flop. Then someone from our side of the coin will see this and do the same thing..... (speaking not of this industry but of the american market vs foreign in general ).
Being in the industry for a long time now, I can say that it's hard to make sales when put up against these types of odds, but look at all of us posting on here.... all of us vendors etc..
we're obviously still around for a reason... we've adapted. as time goes on, the industry will also change and adapt. What we're talking about is only a very small, tiny portion of international marketing and business. perhaps in time laws may change to accomodate these issues? It's hard to say, theres so so much more behind everything for all industries, that creating a simple law to combat things like gray marketing may have negative effects in other parts of international trade.
Its hard to set a specific structure for our industry partially because of the legalities involved. Would a manufacturer want to sell their parts, of course. does it matter where? no. it's hard to control what a buyer does with the product after that point, and is it legal for a company to step in after the fact? I think that the international business climate is so volotile and fluctates so much, that laws, rights, etc.. have yet to catch up on how to deal with things like this..... Because then it would not be just affecting this industry, it would affect EVERYTHING from your TV, to clothes, to food.....
Then you get into the whole question of if a government should step in at all to regulate these things, since that might be going against certain open trade laws or open capitalist ideals etc....
I don't have an answer, because i do not think one exists yet. It sucks to compete against these issues, but it's also hard to come up with a solution that doesn't negatively effect something along the way...
but a large portion of this does rest with the end consumer... is it worth an extra $20 for a product if you get the english version so that u know how to use it properly? I'd say yes, but that's just me. some don't think this way...
But a small amount such as this, is one thing. If a person can buy say a suspension setup for $1K instead of $1800, that's a HUGE difference.... in a case such as this, then the manufacturer would be at fault for not pricing the product properly on an international basis.... I don't have any specifics in mind here, just a hypothetical example to illustrate.
Last edited by World Famous Z; Mar 15, 2007 at 06:12 PM.
I support cubu 100%.
Seems like hes got the point of this thread..
This thread should'nt be made...
Andy u kno cubu is right but looks like u dont wanna admit it (That he thinks that this thread is About Grouppe - s and other grey market vendors on this forum )
Eventho u didnt call their name out but we all know..
Seems like hes got the point of this thread..
This thread should'nt be made...
Andy u kno cubu is right but looks like u dont wanna admit it (That he thinks that this thread is About Grouppe - s and other grey market vendors on this forum )
Eventho u didnt call their name out but we all know..
Last edited by typerilliard; Mar 15, 2007 at 09:13 PM.
Originally Posted by typerilliard
I support cubu 100%.
Seems like hes got the point of this thread..
This thread should'nt be made...
Andy u kno cubu is right but looks like u dont wanna admit it (That he thinks that this thread is About Grouppe - s and other grey market vendors on this forum )
Eventho u didnt call their name out but we all know..
Seems like hes got the point of this thread..
This thread should'nt be made...
Andy u kno cubu is right but looks like u dont wanna admit it (That he thinks that this thread is About Grouppe - s and other grey market vendors on this forum )
Eventho u didnt call their name out but we all know..
Really you can't control what and where people buy their parts but at least they know what they are getting them self in to.
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Joined: May 2004
Posts: 14,313
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From: USA
Is The Crying Over Yet?
The consumer will ALWAYS want the best product at the lowest price.
The internet has helped some businesses and has "hurt" other businesses.
If you don't like business expenses, DON'T have a business.
If you want to charge whatever you like and don't what any negative feedback from clients, own and operate a funeral home.
All of this is covered in Life 101...
"If you can't take the heat, get out of the kitchen"
The internet has helped some businesses and has "hurt" other businesses.
If you don't like business expenses, DON'T have a business.
If you want to charge whatever you like and don't what any negative feedback from clients, own and operate a funeral home.
All of this is covered in Life 101...
"If you can't take the heat, get out of the kitchen"
If i can get it 20-100$ cheaper you bet im not buying it from you. Just like shopping at the car dealer for the best deal on a car. Just wait untill china improves thier quality on replicating aftermarket parts, you are all going to be crying then lol.
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Joined: Oct 2002
Posts: 2,465
Likes: 1
From: Santa Ana CA 92701
Originally Posted by HighwaySpeed
If you want to charge whatever you like and don't what any negative feedback from clients, own and operate a funeral home.
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