Channel conflict occurs when manufacturers (brands) disintermediate their channel partners, such as distributors, retailers, dealers, and sales representatives, by selling their products directly to consumers through general marketing methods and/or over the Internet.
Manufacturers can use RFID’s sequence number to monitor each distributor’s retail price, stocks and market share including the online sale.
A grey market (sometimes called a parallel market, but this can also mean other things; not to be confused with a black market or a grey economy) is the trade of a commodity through distribution channels that are legal but unintended by the original manufacturer. The most common type of grey market is the sale, by individuals or small companies not authorised by the manufacturer, of imported goods which would otherwise be either more expensive or unavailable in the country to which they are being imported.
The distribution channel pays a lot of capital on product promotion, but sometimes, there are few individuals take the advantage of the distribution channel’s effort, selling lower retail price to consumers. This will decrease the brand’s value and outflow the distribution channels. This is what grey market might erode manufacturer’s profit.
Each time, when the consumer scans the RFID with their mobile phone, the backend database can receive the location information. The web-based editor can generate grey market detection report automatically.