Seagate is "diligently and aggressively" clamping down on grey market activity in what it says is an effort to ensure loyalty from its dedicated and authorised resellers.
The vendor claims it has taken a hard line on grey market activity for a long time, but that technological developments mean it can now better monitor grey activity and take action.
Its sales and marketing director for northern and central Europe, Henk Van den Berg, said the firm is combating grey market activity by enforcing a wave of new measures.
"One of the key things is that we have enhanced our IT capabilities [which has improved] our ability to prevent the cross-regional flow of products by preventing or limiting the warranty of drives purchased outside of designated regions," he explained.
"We can also withhold rebates and we can – and will – impose fines. Depending on the severity of the case, we even consider, and do, terminate [contracts]. All these policies are enforced on an ongoing basis and we do terminate in the worst cases. It is not a threat, it is actually something we do. It is always difficult, but it is to protect the [authorised] channel and their investment."
Seagate's definition of the grey market encompasses resellers or distributors selling products outside their geographically appointed area, using pricing support for other purposes and pre-selling products in anticipation of Seagate's pricing.
Van den Berg added that grey market activity threatens the relationship between Seagate and its authorised resellers.
He said: "Grey market is very disruptive and has a significant impact on the channel; it disadvantages partners who are investing in developing their business. It really impacts the return on investment they may get, and as a result it may lead those dedicated and loyal partners to reduce their investment in the Seagate brand, and obviously that is not something we would like.
"We are diligently and aggressively battling and combating the grey market. We have very robust policies in place. Seagate has never stopped talking about it, we really want to safeguard and protect the channel franchise and value."
He added that quantifying the level of grey market activity across Europe is a difficult task, but insisted that the vendor's policies are strong enough to make a difference.
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