Fort Wayne’s Northern Apex is attacking the problematic “grey market” with a covert, high-tech solution.
GalaxyTrack, a traceability and authentication module, is aimed at rooting out unapproved sales of small electronic appliances.
Rick Raber said most people think of knockoffs and counterfeiting as the biggest problem for companies.
He has been involved in the industry for 25 years and for 18 years has been chief technology officer at Northern Apex, where he has led their efforts at automatic identification solution integration.
But the grey market is growing worse. The term refers to goods that are manufactured by the brand owner but sold outside the companies’ approved distribution channels.
Raber said someone within the supply chain often diverts goods and sells them directly to end users – often at cheaper prices.
“Ultimately, you end up with a brand and a price erosion that causes problems to the overall product line,” he said.
Enter GalaxyTrack, which secures the supply chain by knowing exactly which units were sent to whom so that the person responsible for diversion can be traced when purchases are made on the open marketplace.
Raber couldn’t be specific about how that is accomplished so that he wouldn’t tip off those profiting from the diversion. But he said it’s not just one thing – it’s a blend of technologies both overt and covert – that can be embedded or added to products.
Just adding a ticker, for instance, doesn’t work because it can be cut out of the packaging.
Northern Apex first entered the product authentication arena on the pharmacy side, tracking pain medication. But it has slowly expanded into more retail products including GalaxyTrack about a year ago.
One customer had been losing 50% of their margin on a best-selling product, and GalaxyTrack helped identify the offending distributions, stop the loss and regain their margin.
Raber could not name the companies using the Northern Apex product, because the grey market could work around the existence of the product.
He said Northern Apex is growing GalaxyTrack in two ways. First, its existing clients are tagging more products. For instance, one major customer is increasing its volume by 30% and going international. Second, new customers are being added.
Raber said the price depends on the complexity of the solution but falls between 10 cents and 15 cents per unit.