Too small to be counterfeited - think again!
The more popular your product becomes the more the counterfeiter will seek it out. So be proactive and in doing so protect your brand and your future sales.
So you have a popular product and brand – great, well done! However, the sad reality is that the more popular your product or idea becomes, the more it will be copied. Now while some will try and find a new way of presenting your product with their own twist, others will simply copy it in all its forms even down to the use of your own branding – enter the counterfeiter.
Many people see counterfeiting as a problem for the big companies and yet in reality counterfeiting and parallel importing impacts companies of all sizes. The Organization for Economic Co-operation and Development estimates that some 5% of world trade (over US$200bn per year) is counterfeit. That is a staggering number and the reality is that 60% of companies aren’t even aware they are being impacted by counterfeiting.
Beware the foreign manufacturer
With the reduction in manufacturing in the US and increased reliance on countries such as China, India, Mexico and South America, comes risk. We all like to think that our offshore manufacturer is honest and working only for us, and many do. However, the stark reality is many offshore manufacturers will create over-runs of your product and then sell your product into alternate distribution channels or may pass design ideas around to satellite companies for copying. This typically gives rise to parallel importing or counterfeit issues where your brand is definitely growing but your sales aren’t growing at the same rate. This is because your customers are offered your product from alternate sources at cheaper prices.
Take the current green product movement. Reusable grocery bags like Tuckerbags and others are increasingly being sold across the US with increasingly popularity. All are made outside the US. If you go to major international manufacturer sourcing sites such as Alibaba you will see the same bags being offered by various manufacturers. In most cases the brand name is removed, but the artwork and designs are identical. So which is the legitimate bag? Which is the legitimate manufacturer? Is the true owner of the product being compensated? Which are counterfeits and which are real?
Regardless of the answer, the reality is that each of these offshore manufacturers are marketing the US branded product back into the US market at varying prices and without the knowledge of the US company which is the true owner. Clearly, regardless of their corporate size, the true owner of the product is the ultimate loser.
So what to do?
Trust no-one! It is a sad truth but you need to protect your ideas and your supply chain. From manufacturer down to each store selling your product, you need to identify very early on how your flow of product is to work and then take steps to protect it. The more popular your product becomes the greater the risk of counterfeits and parallel imports.
Here are some simple steps to protect yourself:
1) File patents, trademarks, and copyrights where possible and prior to your product or new designs being released;
2) If you need to use a third party or foreign manufacturer, do it under a tight supply contract;
3) Use independent foreign oversight companies to check up on your manufacturer. This is a great quality control step as well;
4) Be vigilant in watching foreign supplier sites to identify copies early and take necessary steps where you see your product being offered by unknown sources;
5) Clearly identify to your wholesale accounts where they purchase legitimate product and request they notify you of product offers from third parties;
6) Watch US based websites to identify companies who you don’t recognize retailing or marketing your products;
7) Be willing to use US laws to enforce your brand ownership rights; and
8) Implement low cost brand protection labeling or anti-counterfeit measures early on to send a clear message to all parties that brand protection is a serious matter for you.
These are just a few simple steps. They won’t always prevent the counterfeit from occurring, but they will provide you tools to identify the problem early on and act on it.
The bottom line - the more popular your product becomes the more the counterfeiter will seek it out. So be proactive and in doing so protect your brand and your future sales.
Learn more about the author, Stuart Cutler.
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- parallel importing
- product forgery
- brand protection
- parallel imports
- counterfeit products