Legal Definitions - gray market

A gray market is a market where the seller uses legal but sometimes unethical methods to sell goods at prices lower than those intended by the manufacturer. This often involves importing goods, especially electronics, from other countries and selling them at a lower price than the manufacturer's suggested retail price.

For example, a company may sell a new smartphone for $1000 in the United States, but a gray market seller may import the same phone from another country and sell it for $800. This can be attractive to consumers who want to save money, but it can also be risky because the warranty may not be valid in the buyer's country.

Gray markets can be controversial because they can hurt the manufacturer's profits and reputation. However, they can also provide consumers with access to products that may not be available in their country or that are too expensive through traditional channels.