grey market

Definition

Via wikipedia

A grey market or gray market is the trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer.

See this page for an instance.

Pros:

• Cheaper prices. Costco is being sued by Omega because of this.
• Online sales: many Swiss brands won't sell online; grey marketers fill this gap.

Cons:

• Warranty service is often not honored. A big gotcha.
• Watch may, in extreme cases, have the serial number ground off.