Gray Market – Caveat Emptor*
If you look on several major online retailers for skincare and makeup, you may see the same product listed several times, with very different prices. Until just a couple weeks ago, I didn’t understand why this happened. Now I know, and it’s important information.
What is “Gray Market”?
Most of us have heard of black market items — things that were obtained illegally and then sold. Illegal drugs, stolen artwork and jewelry are examples of items sold through the black market. There’s no single market, that’s just the blanket term for all illegal businesses together.
The gray market is slightly different. The specific items being sold are not illegal, but may be unethical. For example, a fake Rolex watch that differs very slightly from a real one is a gray market item. The intent is deception, but the manufacturer is doing nothing illegal — barely.
For some products, gray market duplicates are not a problem. If you’re buying LED light bulbs, for example, the gray market ones may be dimmer, or there may be more defective bulbs, but no great harm is done.
This is not the case with health and beauty products. A gray market manufacturer may use different ingredients, sometimes harmful ones. They will copy the original product’s ingredient list, so you won’t know about any harmful ingredients. Or, they might use the same ingredients, but from different sources. [This would be a problem if you only buy vegan or cruelty-free products.] It might be original product, but past its expiration date, or improperly shipped (too hot or cold). Or the product may be exactly what it says on the label, fine and fresh. You can’t tell. I would suggest avoiding gray market products, even if you have to pay a bit more. [Though sometimes gray market items are more expensive, see below.]
Some large online retailers are actually fulfillment houses. There are different types of fulfillment systems:
- the retailer orders product directly from manufacturers, keeps inventory in their warehouse, and when they get an order, handle all packing and shipping.
- the retailer lists product on their website for other retailers. The big retailer handles order processing, inventory and shipping, but does not deal with the manufacturer.
- the retailer handles listing, order processing and payment only. The “middle man” retailer handles the inventory and shipping.
In most cases, the consumer assumes products sold through the big retailer’s website are what they claim to be. And when the retailer is ordering directly from the manufacturer, you get what you order. The retailer’s reputation is on the line; they don’t want any legal actions from selling gray market goods.
The issue comes when the big retailer is acting as a fulfillment house. In some cases, the smaller retailer is legitimate, and you can trust the products they sell are the real deal. But in other cases, the smaller retailer is selling gray market goods.
How to Buy Safely
Buying from large online retailers has lots of advantages. Easy ordering, free shipping, a huge number of choices … I’d never suggest we stop buying from them. But you do need to be careful.
Look at the “Sold and Shipped by” information
If the item you want is sold and shipped by the big retailer, you’re safe. Their reputation is on the line; they won’t risk it by selling gray market products.
Or the item may be sold and shipped my a smaller retailer you know and trust, or even by the manufacturer. You might want to check to make sure it really is sold by the company you assume, but you should be good here.
If you never heard of the company, beware.
Check the Price
I was looking at one skincare product. The manufacturer sells it through their website for $165 for a 1 ounce bottle, no other sizes available. At one big retailer, I saw it for sale for anything from $185 to $273 … and the $273 bottle holds 1.9 ounces! None of these are sold and shipped by the big retailer or the manufacturer … I suspect they’re all gray market.
As the headline says … Buyer Beware!
I am an affiliate of Amazon.com, and sometimes post links to products there. If I can’t find a product I trust, I will either use a different affiliate network or just not post an affiliate link. If you use my product link, don’t assume similar products are good … do your homework.
* Caveat Emptor is the original Latin for Buyer Beware.