What is Grey Market

 

  

 

  "A grey market or gray market, also known as parallel market, is the trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer.

The two main types of grey market are imported manufactured goods that would normally be unavailable or more expensive in a certain country and unissued securities that are not yet traded in official markets.

Grey-market goods refer to "legal goods" which are sold outside normal distribution channels by companies which may have no relationship with the producer of the goods. Frequently this form of parallel import occurs when the price of an item is significantly higher in one country than another. Because of the nature of grey markets, it is difficult or impossible to track the precise numbers of grey-market sales."

Source: https://en.wikipedia.org/wiki/Grey_market

The Cisco grey market (the preferred term is Unauthorized Market) is estimated by Cisco to be worth around $3bn+, so you can see why they are concerned about it, but why should you be? After all with constant pressure to reduce costs why not consider alternative suppliers?

Wikipedia states that the term grey market refers to "legal goods", and whilst there is nothing illegal about the buying and selling of real Cisco hardware, there are two key legal issues to be aware of.

 

The first is that up 15% of Unauthorized Equipment is in fact stolen or counterfeit, and even if you and your Unauthorized Supplier were not aware you can still be convicted of handling stolen or counterfeit goods.

 

The second is whilst the hardware is interchangeable between owners, the software license, the (IOS) is not. Just as when you buy a PC you require a Windows License, you need a IOS authorized for your use when you buy a Cisco product. Operating without authorized software is legal risk to your business; Cisco is unlikely to prosecute, but that doesn’t mean your compliance team will appreciate the additional risk.

 

It is important to remember not all used equipment is the same. Many of the risks in purchasing from an unauthorized source are summarized in the table on Left.