The Grey Market Risk You CAN Avoid

Nik Caruthers

Remember the dotcom era when everything was moving at a frenetic pace? It seemed like everywhere you turned, shady brokers were popping up overnight to take advantage of the new ecommerce and internet craze. Today, grey market risks for Original Equipment Manufacturers (OEMs) at times seem eerily similar.

Just like that era, you may feel like there’s not much you can control when customers purchase inventory and dump it for big profit, or when your products show up on auction or broker sites that do very little due diligence when it comes to goods authenticity certification. Outside of costly, time-consuming punitive action that may or may not be successful, there is little you can actually do to prevent it from happening.

However, there is another grey market risk that could be far more damaging, but that is completely under your control. It is risk that is introduced when OEMs fail to have a coordinated and modern approach to price management. For OEMs, it’s not just channel price management that’s essential, but the harmonious coordination of all prices across all channels. Otherwise, with the way modern buyers research and make purchase decisions, a simple Google search can not only undercut your prices, but uncover inconsistencies that lead to distrust and discontent with both customers and partners.

Dynamic pricing science solves these problems and allows you to accelerate market share expansion through channels while reducing the risk of cannibalization. How? It helps you determine the right price for your partners in real-time, incorporating a multitude of variables that can include cost-to-serve, volume, product requirements, loyalty, and many other scientifically relevant data elements. It helps you determine an accurate price in real time, dynamically and while staying compliant to existing contracted prices.

With so many things outside your control, it only makes sense to take charge where you can and PROS can help. If you want to learn more about avoiding channel conflict in the modern commerce era, download our new ebook, Channel Pricing Simplified.

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