The product diversion business characterises itself in two forms:
1. online retailers that specialize in obtaining products – sometimes in large volumes – and re-selling them online at lower costs. These unauthorized sales are commonly taking place on eBay, Amazon and among other third-party websites.
2. Reselling products offline by salesmen who look to undercut the official sales channels. This can often be as simple as cold calling known buyers of a manufacturer’s items.
According to a Deloitte study cited in a 2009 Bloomberg article, this practice of unauthorized sales – not limited, of course, to internet sales – “siphons as much as $63 billion of U.S. industry sales.”
It is imperative that companies stay proactive when it comes to the unauthorized sale of products online and offline. It is equally important to develop measures to distinguish the business’s genuine products from those being sold elsewhere and to attempt to prevent future product diversion.