Expanding Internationally on Amazon: How to Stop Gray Market Undercutting & Maintain Pricing Power

Expanding into international Amazon marketplaces can unlock huge sales potential. But many brands try it, only to pull back after running into one major problem: Gray market undercutting.

This post breaks down what that is, why it’s a risk, and how to prevent it so your brand can grow globally without giving up pricing control.
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What Is the Gray Market on Amazon?

The “gray market” refers to the sale of genuine branded products by unauthorized sellers, often at prices lower than what the brand wants. These aren’t counterfeit goods, they’re real products that entered the wrong channels. Common sources include:

• Distributor Diversion: Authorized partners resell outside their assigned regions—for example, a U.S. distributor shipping inventory to a European reseller.
  
  
• Cross-Border Arbitrage: Opportunistic sellers bulk-buy products in lower-cost regions (thanks to discounts or currency differences) and resell them in higher-priced Amazon markets.
  
  
• Liquidation Leak: Old or clearance inventory sold through overstock channels ends up abroad, where it’s resold, often with outdated packaging or near expiry.

The result? Loss of pricing control, channel conflict, and a brand that looks inconsistent or devalued in global markets.
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Why Gray Market Undercutting Kills Global Expansion

When pricing varies wildly across countries, it confuses consumers, angers authorized partners, and causes internal chaos. You can:

• Retailers and distributors who play by the rules lose trust in you and start questioning why they should continue supporting your brand if others are allowed to undercut them.
  
  
• Struggle with angry customer reviews if unauthorized sellers provide poor service.
  
  
• Appear cheap or low-end if pricing is significantly undercut.

This discourages many brands from pursuing global growth, even though the opportunity is massive.
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5 Ways to Stop Gray Market Undercutting on Amazon

Let’s break down the best ways to protect your pricing power when expanding internationally.
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1. Register Your Brand with Amazon and Use Their Protection Tools

If you want to defend your brand on Amazon you’ll need to enroll in Amazon’s brand protection programs. These tools give you more control over your listings and who can sell your products.

Start with these ones:

• Amazon Brand Registry

This is your entry point to brand protection on Amazon. Once enrolled, you gain access to tools that help you monitor and safeguard your intellectual property. Amazon will proactively detect and remove listings that misuse your brand name, logo, or trademarks, giving you more control over how your products appear across marketplaces.

• Transparency Program

Designed to stop counterfeit and unauthorized products, Transparency works by verifying each unit you sell. You’ll apply a unique scannable code to every product. When the item reaches Amazon’s warehouse or is delivered to a customer, that code is scanned. If it’s missing or invalid, Amazon blocks the sale, ensuring only authentic inventory reaches the buyer.
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2. Lock Down Your Supply Chain with Clear Distribution Controls

Most gray market issues start inside your own supply chain. If distributors or retailers leak inventory to unauthorized resellers—whether intentionally or not—you lose control before a single unit ever reaches Amazon.

How to tighten things up:

• Audit your distribution network regularly to spot unusual order patterns or shipments that suggest inventory is being diverted outside of approved regions.
  
  
• Strengthen your contracts and include clear territorial restrictions that prohibit cross-border resale. Back those clauses with real consequences, like loss of partner status or legal action.
  
  
• Use serialization to assign unique codes to each batch or unit. That way, if a gray market listing appears, you can trace it back to the source and take action.
  
  
• Set up quarterly cross-checks between Amazon seller names and your customer list to catch any overlap. If someone buying from you shows up as a third-party seller, you’ve found a leak.
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3. Enforce a MAP Policy (Minimum Advertised Price)

MAP pricing ensures that your products aren’t advertised below a certain price, even by resellers. Without it, resellers compete by price alone, often a race to the bottom.

How to make MAP work:

• Create a documented MAP policy that defines price floors for each region.
  
  
• Distribute it to all partners and sellers, and make sure they understand the consequences of violation.
  
  
• Use MAP monitoring tools to flag violators in real-time.

Note: Amazon doesn’t enforce MAP for you. It’s your responsibility to monitor and act.
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4. Send Cease & Desist Notices (and Be Ready to Escalate)

Unauthorized sellers may not violate Amazon’s rules, but they can still infringe on your trademark rights or distribution agreements, especially if they misrepresent your brand or sell outside approved regions.

What to do:

• Send a cease & desist letter to unauthorized sellers demanding they remove your product. This alone deters many.
  
  
• Consult an IP attorney. In some countries, gray market sales can be considered trademark infringement and are enforceable in court.
  
  
• Report violations through Brand Registry, especially if sellers misuse your name, logo, or list expired or damaged products.

Note: Even if you don’t take legal action, formal notices show you’re serious about brand control.
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5. Educate Your Customers & Guide Them to the Right Seller

Gray market sellers often compete on price, but not on service. Customers may receive damaged goods, old inventory, or no support. When that happens, your brand reputation takes the hit, not the reseller’s.

How to handle this:

• Add messaging to your product pages reminding customers to buy from official channels to ensure quality and support.
  
  
• List your authorized sellers on your Brand Store so customers know who’s legit.
  
  
• Respond to reviews where buyers mention a bad experience and clarify that it came from an unauthorized seller.

Tip: Use Amazon’s “Ask a Question” feature to add a pinned Q&A explaining where to buy your products properly.
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Final Thoughts

Amazon’s global marketplaces are powerful, but without control, they can also expose your brand to serious pricing risks. By taking a proactive, multi-layered approach, you can protect your brand and expand confidently:

• Lock down distribution
• Monitor and enforce MAP
• Leverage Amazon’s protection tools
• Be ready to act legally
• Guide customers to authorized sellers

International growth is within reach, you just need to defend your margins before you go global.