‘Grey stock is the biggest killer of the trade’

Storage distributor M2m Direct has told PCR that the market for grey stock is the biggest problem in the PC and tech channel.

The act of buying unofficial, out-of-region or cross-channel stock has long been an issue for the trade. Having just won an award for HDD sales (a category historically affected by the grey market), M2m shared its thoughts on the issue.

"It’s the biggest killer of the trade, completely," M2m’ Direct’s business development director Charlie Hacker told PCR.

"It deludes people – that’s the problem. It’s product that undervalues your credibility. If you’re telling a customer a product is $100 and they can see it elsewhere for $80, then it ruins the stock. It’s expensive for any inventory that’s there, and it’s very hard to maintain a genuine sales status for it.

"We saw a lot of it at the back-end of Q1, it started off great but then with all the influx of product in January, it meant January, February and March this year was just awash with product – both HDD and SSD. It’s an issue that’s not getting any better at all."

M2m MD Ged Mitchell added: "It’s still an issue – it’s cyclical. It seems to come in phases. We have seen some evidence of this where you’ve had imports and it does drastically affect the market price and our normal channel.

"We don’t know exactly where the sources are. There seems to be probably two key sources: one could be a dumping route, which is probably genuine product that’s come out of big distribution, dealers, resellers, Far East, Europe, wherever. And then there’s what I call the real unofficial stuff which is very difficult to put you finger on.

"On the components side, we see a fair amount of grey channel dumping from across the Euro zone and worldwide, in an attempt to consume some of the output that was headed for Russia which has been frozen out regarding embargoes and currency restrictions."

Mitchell says that M2m Direct got its name because of its strategy: "sourcing directly from known, quality franchised sources to give our customers – and their end customers – the knowledge that they’ve got 100 per cent warranty, reliability and they’ve got the right goods".

Check out the upcoming June issue of PCR for more information on the sales award picked up by M2m

Further reading on grey stock: 

• How is grey stock affecting the UK channel
• Seagate: The grey market is unsafe and unacceptable
• Grey stock divides opinion

Image source: Shutterstock