IBM clamps down on grey marketing

IBM has warned partners involved in grey market selling that controls it recently introduced will help it identify and prosecute them.

IBM has warned partners involved in grey market selling that controls it recently introduced will help it identify and prosecute them.

The firm has harmonised pricing on accessories, which will now carry bar codes and serial numbers so it can more effectively monitor the supply chain to detect breaches of distribution agreements.

"These new measures give our partners and customers greater security and reliability in buying and selling our products," said Stephan Wippermann, IBM European vice president for Business Partner Transformation .

The initiatives were gradually introduced from the middle of last year and IBM joined the Anti-Gray Market Alliance in September, a vendor led industry body trying to clamp down on the IT market's unauthorised sector.

Consistent pricing, particularly for options including storage modules or hard disks will allow IBM to "reduce the bandwidths of its valid international prices for hardware products". This should cut regional differences which fuel the grey market, it said.

Tighter controls in the supply chain will help IBM identify any products which initially came from other transactions potentially where special bids applied, while bar code registration will reconcile the prices/Ts&Cs originally agreed for the kit.

Resellers and distributors found to be involved in grey market selling face being stripped of their accreditation or the prospect of legal action, IBM said.

"[The measures] testify to our clear commitment to prosecuting consistently, effectively and around the world infringements such as grey market activities aimed at undermining our Business Partner programme," said Wippermann.

Nick King, chief executive at  business partner Apex, who said it did not operate in the grey market and was not impacted by it, questioned IBM's decision to tackle it now.

"It is a highly mature market and it's a little late to start [this] policy in a market that is well established," he said.

Vendors create the conditions that allow resellers to exploit the grey market and during the downturn this may have proved too tempting for some, said Alastair Edwards, principal analyst at Canalys,

"IBM has probably realised that as it continues to engage with resellers and recruit new partners to drive mid-market business, it needs policies that are channel focused and friendly. Adressing the grey market is a key element of that," he said.

However Big Blue also has to "follow through" any threats of litigation against guilty parties with action, Edwards added.

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