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Supply Chain Management

May 2010 - Posts

  • Avoid Counterfeit Goods in Your Retail or Wholesale Business

    For businesspeople in search of the best deal on inventory for their retail stores or warehouses, the temptation to cut costs by stocking "knock-offs" of major brands like Nike and Adidas may weigh heavy in your mind. After all, the untrained eye is not likely to distinguish the genuine article from a near replica, right? It's possible you won't receive complaints from consumers, but dealing in replicas and counterfeit goods is a practice best avoided if you want to run a legitimate, honest business.


    There Are No "Safe Bets" With Counterfeit Merchandise


    Often cheaper to produce, falsified toys, clothing, and other items designed to look like those of major brands typically sell at a reduced wholesale price. A buyer interested in maintaining stock to satisfy high demand for certain brands, while savvy 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 fall apart immediately, what is the problem?


    For one, the manufacture of replicated items is illegal. When you purchase goods 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 businesses to have ties to other illegal activity - drug trafficking and terrorism - and your association makes you a guilty party at one level.


    Also, consider where and how fakes are produced. Because these products are made cheaply and priced to move, they are regularly assembled under poor working conditions, not unlike a sweatshop. The possibility of toxicity like lead paint and metal fillings in the materials is high, and with foodstuffs promoted under a false label one may find ingredients proven to be poisonous.


    Spotting Fakes and Working Toward Legitimate Connections in Trade


    Depending on the manufacturer, some fake products are simple to spot. Some clues to help you discern counterfeits from genuine brands include:


    • Proof of authenticity: A reputable manufacturer will produce a certificate of authenticity (COA) or OEM/ODM certification papers if asked. Anybody who hedges on this information is likely one 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 hunt the best prices for goods, sales too low for the product quality could serve as a warning that what you are buying may be falsely labeled.
    • "Garage" and "Flea Market" sales: A reputable vendor won't deal from the trunk of a car or a garage stuffed with boxes. If you seek quality inventory, work with traders with a legitimate office or warehouse.
    • Poor packaging: While it's not uncommon for goods to sustain minor damage during transportation, you'll want to study the packaging. If boxes don't look right, or adhesive and blister packs appear fragile or brittle, chances are not much care went into wrapping the products. Such disregard may suggest the goods you're buying are not authentic anyway.
    • Brand names out of place: Certain brands, like Gucci, will only distribute their seconds and discount merchandise through their own factory outlets. If you see "sale" items from big names in another retail outfit, chances are they are not real.
    • Poor or no return policies: A reputable vendor is always willing to work with you if you're not satisfied with product. If you find you are dealing with "as is" or "no refund" terms, take this as caution to look elsewhere for merchandise. When dealing online, look for buyer protection information to ensure you won't get ripped off.
    • Missing parts/accessories: Usually when you buy a purse or watch, the items come with presentation boxes, liners, or dust bags to add extra protection. Hastily counterfeited items may be missing these finishing touches, so if you don't see any extra care made in presentation be warned.
    • Other errors: Are words misspelled on labels? Are warnings and instructions missing from packages? If it appears some corners have been cut, chances are you are dealing with fake goods.


    Forging connections with legitimate traders not only guarantees stellar inventory for you, but it 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 your repeat business. Cutting corners through fake merchandise increases the risk of consumers cutting you from their business.

  • Building a Global Supply Chain Can Expand Your Market and Improve Your Risk Management

    As a retailer or wholesaler of goods, your success lies in providing the products you offer to customers in a timely manner, and maintaining strong connections with this base of buyers. Whether your business is clothing, antiques, food, or household items, you know it's important to keep inventory ready, and be prepared for any issues involving transportation and manufacturing. Growing your supply chain through networking with globally-based traders rather than keeping business with one or two vendors can help reduce the risk management in your work.


    Risk Management and Your Company


    Risk management describes the effect of uncertainty on work objectives, positive or negative. Every line of work - manual labor, clerical, financial, etc. - comes with its unique risks. Where global trade is concerned, a retailer or wholesaler may encounter issues with shipping and customs, or damage to goods in transit. Recent events like the eruption of an Icelandic volcano and BP's oil spill in the Gulf of Mexico have assuredly affected global trade for certain parts of the world. In business, one cannot expect when natural or man-made disasters may occur and effect supply and demand, but it's always important to anticipate the possibilities.


    In risk management, you are responsible for assessing what events are capable of threatening your business. Suppliers and traders based in areas of political unrest, or with mediocre transit are certain to affect the timeliness of your deadlines with your customers, but if these vendors provide particular products you need you may find it difficult to drop them altogether. Expanding your supply chain to include similar manufacturers and distributors, however, widens the door and provides more solutions. If you are unable to get the goods you need directly from one source, you can create the option to buy from a similar company, or work through another vendor who is able to make that direct connection.


    Market Expansion - Grow Your Customer Base


    Think about your current reach. Have you experienced a slowdown in sales with your localized brick and mortar store? Do you have an online shopping cart but wish to do more to reach a market beyond your city's borders? Building a larger supply chain can help you accomplish that, and you don't necessarily have to import more inventory to your warehouse.


    Research suppliers that store goods for you, or else in warehouses at different points on the globe. Finding the right vendors able to drop-ship items to customers can increase your businesses, and in turn gain a higher level of brand recognition. Whether you expand your website presence to allow for overseas shipping to customers, or grow a following through an eBay and Etsy store, the ability to drop-ship offers limitless potential to how you do business.


    The greater your supply chain, the better you can optimize your company's risk management and global reach. Bigger profits are had when your business grows, and as you research the opportunities you'll see just how quickly they can improve.