Gray Market

What Does Gray Market Mean?

The gray market refers to the sale of products via distribution channels that are unintended, unofficial and unauthorized by the real vendor of the products. The gray market does not involve illegal channels like the black market, but is considered a parallel market where goods such as electronics, computer games and cellphones are often sold for lower prices.

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Techopedia Explains Gray Market

While the gray market is legal, it presents a disadvantage to copyright owners and other intellectual property rights holders because their products may not always be protected when sold this way. Software manufacturers develop digital rights management (DRM) software to minimize gray market threats.

Cellphones and computer games may also appear on the grey market if there is a significant price disparity in these items between countries. In this case, items from a country where they are less expensive may be sold at less than retail price in a country where they are more expensive.

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Margaret Rouse
Technology Expert

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.