What Is a Black Market?

By Jeremy Bowman – Updated Jan 1, 2025 at 10:43 AM EST

Key Points

Black markets involve illegal trade, often in high demand goods like drugs or weapons.
They cause tax revenue losses and pull business from legal entities.
High profit margins in black markets incentivize continued illegal activities.

Most transactions that take place are legal. If you go to a store or shop from an established online retailer, you're engaging in legal commerce, which is sometimes known as the white market.

By contrast, the black market refers to the buying and selling of illegal products or legal products that are purchased illegally.

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man in business suit handing stack of hundred dollar bills to another person — Image source: Getty Images.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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Jeremy Bowman has positions in Airbnb. The Motley Fool has positions in and recommends Airbnb. The Motley Fool has a disclosure policy.