Why You Should Not Buy Parallel Imports or Grey Products
A parallel import or Grey Product is a product that is imported into South Africa without the manufacturer or local distributors’ knowledge. Although not illegal in South Africa, it poses a few risks to your business. We have outlined these risks below to help you make an informed decision.
- Compliance and Regulations
- Limited or No Product Warranty
- Limited or No After Sale Support
- Shipping and Freight
- Cost and Purchase Reliability
Compliance and RegulationsA lot of work goes into making sure the products imported to South Africa are safe to use and that the products adhere to the country’s regulations. This means that a handful of local regulators need to be made aware of these products and approve/disapprove them based on safety tests performed by accredited test labs. If an uncertified product is imported or bought from a parallel importer and causes damage to property, or even worse, causes injury or death, it may result in serious legal action against all relevant parties. Scoop has made all ICASA Type Approvals available on our website and all NRCS approvals are also available on request. NRCS LOA’s and ICASA Type Approvals are non-transferable. This means that you are not able to use already issued certificates for the import of non-compliant goods if they are not in the name of the relevant company, distributor or manufacturer.
The following article explains how NRCS regularly destroy non-compliant shipments:
WarrantyMost Grey products are imported by companies with little interest in extending the manufacturer’s warranty. You may find that the seller/importer of these products won’t assist with a replacement or refund on faulty units, but rather ask you to send the product back to the manufacturer yourself.
Authorised distributors like Scoop, however, honour the manufacturer’s warranty and will replace/refund the unit if it is deemed defective and the product falls within our warranty conditions. When importing a product independently, you will forego the luxury of an immediate replacement or refund like you would from a local distributor.
Scoop has made it easy to check if your defective product still falls under warranty and booking your product in for testing is as simple as filling out this online form.
After Sale SupportMost of the time it is rather frustrating and difficult to contact the seller/importer of grey products for the purpose of obtaining technical support. If there is some sort of after-sales support, it is often lacking due to inadequate training and product knowledge. Scoop has a dedicated technical team ready to offer support between 8am and 5pm, Monday to Friday. We take pride in our effort to ensure that our teams are trained and capable to offer you best-practice experience and solutions.
Shipping and FreightSince 2013‚ the amended Customs and Excise Act has allowed South Africans to import no more than three consignments from overseas with a value of less than R50‚000 in one calendar year. If the imports are more than 3 and greater than R50,000, you are required to apply for an importer’s code with SARS. This license is only granted once SARS has completed a comprehensive series of checks and verification on the individual or business. If there is no importer’s code, Customs will pick up on the history of purchases and will subsequently stop the consignment from being released to the buyer. Such a stop entails fines, penalties, inspection fees and storage charges. If the consignment is with customs for more than 10 days, it will be sent back to the country of origin and the importer will be billed for the shipment procedure.
Customs clearing is very in-depth and becomes quite complicated which involves Clearing Instructions, Applicable Incoterm billing and procedure, Tariff Submission, Customs VAT and applicable Duties and/or Ad-Valorem Duties. Customs verifies compliance of the product during this procedure as well.
Several online retailers will offer speedy delivery. It is worth ensuring that the delivery is not through the South African Post office, as a number of orders have unfortunately not made it past the South African Post Office.
Cost and Purchase ReliabilityAlthough Grey products may sometimes be cheaper, you may find it hard to repeat the same price. Scoop will always try to keep costs as low as possible regardless of the volatility of the exchange rate. Because we purchase in bulk directly from the manufacturer, we are in a position to get the best possible price. There are no middlemen or shared container shipments. Our shipments come directly from the manufacturer in dedicated containers designated and destined for Scoop. Purchasing direct or from a non-authorised distributor might put you at risk of a damaged or lost shipment.
Local is LekkerLastly, “Local is Lekker”. Many of the people employed by the designated distributors are South African and work hard in ensuring sustainability for the ICT industry. By supporting a local distributor you are supporting South African employees with families just like yours. These employees go above and beyond to make sure you can continue business profitably.
Blog post by Steven Krog