Does "product diversion" mean "to swicth brands"?

Question

Product diversion:http://www.sghartassociates.com/ServicesDiversion.php

NL888 · Accepted Answer

To switch brands:

http://cn.bing.com/images/search?q=brand+erosion&qs=n&form=QBIR&pq=brand+erosion&sc=0-0&sp=-1&sk=#view=detail&id=EEADE939C70BC7E3DEA46B169825981E3FFFE467&selectedIndex=13

CSnyder · Answer

No. "Product diversion" is essentially a legal term of art (that is, a specific phrase used in a certain profession or area of expertise which has a special meaning in that realm) that means nothing more than "a product being sold outside the manufacturer's intended distribution chain".

For example, say I am a publisher and I sell 50,000 copies of a newly discovered David Foster Wallace manuscript to Barnes and Noble. I agree that if the books do not sell, Barnes and Noble can destroy them and return the covers (as proof of destruction) for a 30% refund of the book's sale price. Barnes and Noble decides that they can make more money if they tear the covers off the books and return them to me (receiving the 30% refund), but doesn't destroy the books - instead, they sell them to a number of local discount bookstores for, say, 10% of the cover price. These books are now diverted products - they have escaped my intended distribution network.

Note that while the above example would be illegal for Barnes and Noble (because they fraudulently claimed that the books were destroyed), by no means are all or even most instances of product diversion illegal. Often what happens is that a manufacturer sells a number of products to a retailer, but the retailer fails to sell all of them, so they sell their remaining stock in bulk to a discount retailer, who may then sell the products at such a cheap price that the manufacturer feels it damages their brand. But absent a contractual obligation to do otherwise (which is common for some products and uncommon for others), the original retailer is free to sell the goods for whatever price they want, to whomever they desire.

NL888 · Answer

Excellent!

Thank you!

Does "product diversion" mean "to swicth brands"?

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