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ose products would cost if purchased through 'official' wholesalers and retailers. Today grey market drugs are being brought into the U.S. from Canada and other countries where they sell for less than they do here. And before long, if current software pricing trends continue, you're going to see unauthorized commercial software imports and re-imports -- and big savings for commercial software users in developed countries.

Back when I was in the limo business, I was a member of several industry-specific email lists and online forums. One day, in one of them, a limousine operator in The Netherlands asked if any of his U.S. colleagues could help him buy parts for several Lincoln Town Cars he owned. It seemed that a rebuilt alternator for a Lincoln that cost $75 or $80 in the U.S. went for $300 or more in The Netherlands. So this guy was willing to pay someone in the U.S. a reasonable fee to buy Lincoln parts at U.S. prices and ship them directly to him. He found someone to help him, too, not for cash but as a service exchange, because Mercedes and Rolls Royce parts prices in the U.S. typically cost three or four times as much here as in Europe, and a small but significant number of U.S. limo operators own either Rolls or Mercedes cars.

This is a typical example of a grass-roots grey market at work. There are also plenty of people who casually bring late-model, used European luxury cars into the U.S. and (after refitting them to meet U.S. pollution and safety standards) sell them for far less than franchised dealers charge for the same car. Again, this is a two-way trade, since there is also a strong market in Europe for many U.S. cars that are expensive and/or rare on the east side of the Atlantic even though they are cheap and/or popular on the west side of that ocean.

There are also many small, independent companies that bring factory-original Japanese and Korean car parts and accessories into the U.S. and sell them for less than the exact same parts cost at franchised car dealers.

Combine low-cost shipping with the Internet, and suddenly it's hard to sell cars or parts for one price in one part of the world, and for another price somewhere else. As soon as the price difference is high enough for entrepreneurs to profit from bypassing the 'official' distribution system, alternatives to it inevitably spring up.

Not only is the car business affected. Cameras, stereos, and other consumer electronics are also readily available through grey market channels, often from distributors large and strong enough to overcome potential warranty problems by shipping defective units back to their point of origin before turning them in for warranty repair or replacement.

Regionalizing software prices

It's sad to use Microsoft as 'the' example of an evil software empire as often as we do, but it's the world's largest and most influential software company, and as such it must take its corporate lumps. Microsoft has long adhered to a 'one price fits all' policy. If the retail price of one of its products is $500 in the U.S., that product will be sold at the local equivalent of $500 U.S. in countries where $500 is a month's or even a year's wage for most workers.

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