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Supply Chain Management

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.


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