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Gray Market

Definition - 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.

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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