Is the grey market chipping away at your aftermarket revenue?

While a failed warranty claim might be annoying for consumer products, the stakes for grey market risks in B2B are much higher.

Industrial vehicles, heavy machinery, and specialized equipment form the backbone of critical industries like logistics, waste management, and infrastructure. If something breaks, downtime doesn’t just cost money: it disrupts entire operations.

Imagine a fleet operator buying cheaper, unauthorized hydraulic parts for its specialized vehicles. When the system fails, the downtime costs significantly more than the initial savings. The result? The operator points the finger at the manufacturer, not the cheap part they installed.

Aftermarket sellers need to recognize that the grey market isn't just a nuisance — it's a symptom of a larger digital gap that, if left unchecked, can compromise the stability of your entire business. 

The real grey market threat: It’s not just ‘parallel imports’  

For years, the industry definition of the grey market focused heavily on parallel imports: buying legitimate products in one region to sell in another. While this arbitrage still exists, the more pressing threat for heavy equipment and manufacturing is the proliferation of unauthorized, non-OEM parts.

For B2B sales, aftermarket products are especially vulnerable to grey market leakage due to large, multi-layer distribution models.  

This leakage tends to come in two variants.

In the first, Grey Market resellers buy legitimate products in bulk, taking advantage of price discrepancies and overstock in different sales regions to resell products to end-users at a price significantly lower than the authorized retailer.  

Similarly, a reseller may swoop in to buy outdated or overstocked merchandise at a discount, turning around and selling legitimate, but out-of-date products. This is common in electronics and textbooks — industries that frequently turn out new iterations of products.

The second and most common variant is the sale of knockoff, when independent distributors — often sourcing from low-cost regions like China —  flood the market with "compatible" spare parts. They claim these parts deliver the same quality as the OEM for a fraction of the price, but do not provide the same quality or longevity associated with the OEM’s authentic parts.  

This creates a dangerous illusion for buyers. They believe they are getting a great deal on a viable replacement, but they are often purchasing components that lack the rigorous testing, material science, and engineering precision of the genuine article.

Independent resellers are stepping in where OEMs fall short. They offer simple e-commerce experiences, instant stock visibility, and fast shipping. When an OEM’s portal is clunky, hides pricing, or lacks real-time inventory data, buyers don't wait. They turn to the grey market because they need the part now. 

Protect your business: how to win back your customers

Stopping grey market sales requires more than just legal threats and restrictive distribution agreements. You must remove the incentive for buyers to look elsewhere.

Make it easy to do business

To win back the market, you must provide a friction-free experience. When your web store connects directly to your ERP, you can display real-time stock levels, accurate customer-specific pricing, and reliable delivery dates. When a buyer knows you have the part and knows when it will arrive, they have no reason to gamble on a third-party seller.

Connect with the end customer

Digital portals allow you to re-establish a link with the actual operators of your equipment, even if they bought it second-hand. By offering service contracts and proactive maintenance tools directly through your portal, you can offer value that a grey market part seller cannot: guaranteed uptime.

Shift from reactive to proactive

The future of beating the grey market is staying one step ahead. By leveraging data, OEMs can move from reactive sales to proactive service: anticipating when a machine needs maintenance and triggering a parts order before the customer even thinks to look at a competitor.

To combat against 3rd party sales, OEMs need to make their catalogs visible, navigable, and accessible. This means providing an easy-to-use online buying platform that meets buyers where they are.

Sana Commerce provides an unprecedented view into real-time stock data both for buyer and seller. See how this real-time stock information can help both you and your authorized resellers maintain product consistency, reduce grey market losses, and increase revenue.