Gray Markets in the United States

This paper examines the gray market for consumer products, with a particular emphasis on the reasons for gray market growth, the distinct channels of distribution for gray market products, and the means by which the gray markets may be terminated. Secondary emphasis is provided on the factors that lead to gray market emergence and on the impact of exchange rates on gray markets. A major conclusion of the analysis is that gray markets for consumer products will continue to grow as manufacturers benefit from gray markets. This growth will be associated with products manufactured and distributed within the national market rather than imported products which fueled the gray market growth of the previous five years.