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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (29001)	2/20/2003 10:22:37 PM
From: elmatador	Respond to of 74559

Elmat 1989: "The global economy will be the gray market. Producers will find the most cost-efficient place to set up manufacturing. The Swiss or Cayman Island Bank, the broker, and the ship forwarder will “grease” the transaction. Why gray market will have significance? Because it will be the way around dumping charges, imposition of quotas -which gives excess of profits to foreigners- tariffs -which rises money for the government that imposes them-and the so called “managed trade”. With more than 1000 companies now established in 29 countries and the International Labor Office predicting that by the 1990’s all developing countries will be in the Exporting Processing Zones business. . Gray market’s future sure will be brighter." Today Tech Companies Suffer from Gray Market Boom-Study Thu February 20, 2003 07:35 PM ET SAN FRANCISCO (Reuters) - The high-tech industry is losing $5 billion in annual profits and stands to lose even more as branded information technology products are diverted from distribution channels into the so-called gray market, according to a study released on Thursday. Upward of $40 billion a year in information technology products end up in the gray market as products fall out of authorized distribution channels or are imported and exported without the consent of manufacturers, the study by accounting and tax firm KPMG also noted. Unscrupulous distributors and brokers have created an IT gray market by breaking distribution agreements, misrepresenting discount programs for products or using bogus documents, the consultant said. KPMG conducted its study on behalf of the Anti-Gray Market Alliance, whose member companies include network equipment makers Cisco Systems Inc. CSCO.O and 3Com Corp. COMS.O , No. 2 computer maker Hewlett-Packard Co. HPQ.N and office equipment maker Xerox Corp. XRX.N "We've even seen goods that are large in scale like servers transported around the world," Marie Myers, chair of the Anti-Gray Market Alliance, told Reuters. "If gray market brokers are able to obtain the product at a significant pricing advantage, they're able to transport it." CUSTOMERS, BRANDS AT RISK Customers of gray-market IT products risk buying obsolete, damaged or counterfeit parts and goods delivered without warranties and support, according to KPMG. Additionally, bargain-hunting customers may not even be able to find lower prices for IT products in the gray market. An estimated 60 percent of customers pay the same prices for products from the gray market as they do for products bought in legitimate distribution channels, KPMG said. For IT manufacturers, the gray market poses risks to the value of their brands, according to the KPMG study. Consumers who experience problems with products bought in the gray market blame manufacturers instead of distributors and brokers for any shortcomings, the study said. KPMG found that 62 percent of the IT manufacturers it surveyed for its study identified situations where products discounted for specific customers never were delivered to appropriate customers. "I would argue the $5 billion in lost profits is a conservative number," said Rob Pink, the KPMG partner in charge of the accounting and tax firm's channel practice, which includes gray market activity. "The survey results suggest the problem continues to grow," Pink said. "The brokers indicate there won't be any downturn (in the gray market)...There just seems to be an abundant supply of product from their perspective." My wife forwarded my "book that will end all other books" Now I can paste a few abstracts. When I laugh about the guys who discover how a BBR works, I have my reasons Jay!!!