For entrepreneurs looking for the best deal on inventory for their retail stores or warehouses, the temptation to cut costs by stocking “knockoffs” of major brands like Nike and Adidas may weigh heavily on your mind. After all, the untrained eye probably won’t know the genuine article from a close replica, right? You may not receive consumer complaints, but trading in replicas and counterfeit products is a practice best avoided if you want to run a legitimate and honest business.
There are no “sure bets” with counterfeit merchandise
Often cheaper to produce, counterfeit toys, clothing, and other items designed to look like those of the major brands are usually sold at a discounted wholesale price. A shopper interested in holding stock to meet the high demand for certain brands, while being smart enough to tell a real item from a fake, may wonder what the harm is in selling counterfeit goods. If the toy or radio works and doesn’t come apart right away, what’s the problem?
For one, manufacturing replicated items is illegal. When you buy products from a counterfeiter, you have already put your business at risk by dealing with a criminal or dubious organization. It is not uncommon for such companies to have links to other illegal activities (drug trafficking and terrorism) and their association makes you guilty on one level.
Also, consider where and how counterfeits are produced. Because these products are made cheaply and are priced to move, they are regularly assembled under poor working conditions, such as in a sweatshop. The possibility of toxicity such as lead paint and metal fillers in materials is high, and with food products promoted under a false label, one can find ingredients that have been shown to be poisonous.
Detect counterfeits and work towards legitimate connections in the trade
According to the manufacturer, some fake products are easy to spot. Some clues to help you distinguish counterfeits from genuine brands include:
- Proof of authenticity: A reputable manufacturer will produce a Certificate of Authenticity (COA) or OEM/ODM certification documents upon request. Anyone covered with this information is likely not to be trusted.
- Suspicious Pricing Practices: $10 for a pair of Nike shoes sounds too good to be true. While it’s natural to want to shop around for the best prices for products, sales that are too low for the quality of the product could serve as a warning that what you’re buying may be falsely labeled.
- Sales “Garage” and “Flea Market”: A reputable seller will not deal from the trunk of a car or a garage full of boxes. If you’re looking for quality inventory, work with merchants who have a legitimate office or warehouse.
- Poor packaging: While it’s not uncommon for goods to sustain minor damage in transit, you’ll want to study the packaging. If the boxes don’t look right, or if the adhesive and blister packs seem flimsy or brittle, it’s likely that not much care was taken when wrapping the products. Such contempt may suggest that the products you are buying are not authentic anyway.
- Misplaced marks: Certain brands, like Gucci, will only distribute their secondhand and discount products through their own factory outlets. If you see big name “sale” items at another retail store, chances are they aren’t the real deal.
- Poor or no return policies: A reputable supplier is always willing to work with you if you are not satisfied with the product. If you find you are dealing with “as is” or “no refund” terms, please use caution to look elsewhere for merchandise. When shopping online, look for buyer protection information to make sure you don’t get ripped off.
- Missing Parts/Accessories: Usually when you buy a bag or watch, the items come with presentation boxes, liners, or dust bags to add extra protection. Hastily counterfeit items may lack these finishing touches, so if you don’t see any extra care in presentation, beware.
- Other errors: Are there misspelled words on the labels? Are there warnings and instructions missing from the packages? If it looks like a few corners have been cut, you are probably dealing with counterfeit products.
Forging connections with legitimate merchants not only guarantees you stellar inventory, but also helps reduce the cycle of criminal activity involved in counterfeiting. Your customers will receive quality items and in turn recommend you to others and offer you their repeat business. Cutting shortcuts through fake merchandise increases the risk that consumers will put you out of business.