Black market deals with the banned, counterfeit or stolen items which are sold in the market illegally.
It deals with the trade of stolen items, lawfully banned or counterfeit items. Therefore, these goods or services are also traded in an illegal manner. For example, weapons and drugs are two most commonly traded black market items. Black market is closely related to brand abuse.
Grey market usually deals with the genuine goods that are sold and bought through the unauthorized channel of distribution.
Grey market lies somewhere between the black and white markets. It generally deals with the genuine commodities. However, they lack the proper authorization or controlling factors.
A simple example of a grey market is the one which is developed by people who trade in goods at lower rates than the official rates. The goods of grey market are not like counterfeit goods of black market. It typically involves those services which are not registered legally in order to save taxes from the government. Thus, most often the distribution channel used is unauthorized or unofficial in the grey market.
For example – an unauthorized dealer, who owns a store of a brand of watch, would be considered as a part of grey market. On the other hand, if the same person sells fake watches under the same brand name, then that would be included in a black market.
The white market is the legal, official, authorized, or intended market for goods and services