The gray market refers to the products and means of trade and distribution of goods that are legal but fall outside normal business channels. The gray market is a haven for sharp entrepreneurs who know improvise supply chains and create new markets for products that would otherwise fall by the wayside in their normal markets. Follow these steps to use the gray market to make some money.
Instructions
1. Identify an opportunity. The gray market is primarily about spotting trade opportunities that fall within legal bounds. Look for a cheap overseas supplier of a popular domestic product like cigarettes and alcohol. Or, improve on a popular product or manufacture generic models similar to something popular.
2. Take advantage of cultural differences. Pianos are a good example of how cultural differences are used on the gray market. There are a number of high quality pianos that are considered "low class" by certain Asian cultures. The lack of demand for these pianos on cultural grounds drives down their prices. Smart gray market entrepreneurs use cultural differences like these to make money on goods trading.
3. Cut out the middleman. One tested means of using the gray market is to go around normal distribution channels. In general, distribution channels are well established and hard to circumvent within a given environment. However, by going to a different market for a product and by using smart means of transport you can assume the gray market role of importer and seller, thereby cutting out a middleman.
4. Look to both ends of the good spectrum. You can use cheap everyday goods like cigarettes and, on the other hand, expensive luxury items like fine wines and liquors to make money on the gray market. In the case of cigarettes, the trick is finding an out of state or overseas supplier who will sell you bulk supplies at very cheap rates. With wine, a popular product on gray markets, buying bottles directly from vineyards is an excellent way to undercut the competition.
