Counterfeits Hurt Your Brand’s Reputation

Here’s How to Fight Back

Brian Wallace, Founder & President, NowSourcing

What happens when someone steals your company’s intellectual property and uses it to create a counterfeit version of your product? It’s more common than you think – it’s a major factor behind our current trade war with China – and it costs the global economy billions of dollars each year. In 2018 alone the cost of counterfeits to the global economy topped out at $323 billion – the same as the trade surplus of China with the United States. But it’s not just a financial nightmare. Counterfeits cause injuries and deaths as well as property damage, and they also often lead to other types of crime. Counterfeits can be a serious threat to any company’s image, as consumers often don’t know that what they have purchased is a counterfeit at all.

The Image Problem Of Counterfeits

Brands work hard to establish reputations, and those reputations can be destroyed in the blink of an eye. Even when there’s no scandal, a counterfeit product can cause injury to a consumer, which can lead to lawsuits and loss of reputation. Many consumers believe that it’s the responsibility of a brand to prevent counterfeits from being sold, even on online marketplaces where third party sellers are welcome to sell.

One study found that 99% of fake iPhone chargers could not pass critical safety tests, which often led to electrical shocks and even fires. Another study found that as many as two in five supposedly name brand items for sale online were counterfeits. Electronics are probably the most counterfeited items, but things like makeup, skincare, supplements, and medications are more often counterfeited than you might think – almost a third of makeup sold online is counterfeit!

More than a quarter of consumers reported unknowingly purchasing counterfeit merchandise online, and many more never discovered their purchases were counterfeited. As much as 39% of the goods sold on online marketplaces are counterfeit – everything from replacement batteries to clothing.

So what happens when a consumer unknowingly purchases a counterfeit product, doesn’t realize it’s counterfeit, and then blames the real company when it malfunctions? Unfortunately this type of reputational damage and subsequent PR nightmare is all too common.

Who Is Responsible For Stopping Counterfeit Goods?

Many companies are reconsidering their business relations with Chinese manufacturers because of the pervasiveness of intellectual property theft, but the cat is already out of the bag for many of these companies. Counterfeit versions of their products can show up anywhere, from online marketplaces to new apps advertised on social media.

Both brands and buyers can and should take reasonable steps to ensure products aren’t counterfeit before they are purchased. Brands can monitor online marketplaces for counterfeits, and consumers can buy from reputable retailers and be wary of prices that seem too good to be true.

The internet has made it easier than ever to sell counterfeit products, and technologies such as 3D printing have made it easier than ever to produce counterfeit merchandise. It’s up to everyone to prevent those counterfeits from making it into homes and damaging the hard-earned reputations of the companies that are getting ripped off. Learn more about the cost of counterfeits from the infographic below.

Cost of Counterfeits

Source: Best Choice Reviews


Brian WallaceAbout the Author: Brian Wallace is the Founder and President of NowSourcing, an industry leading infographic design agency in Louisville, KY and Cincinnati, OH which works with companies ranging from startups to Fortune 500s. Brian runs #LinkedInLocal events, hosts the Next Action Podcast, and has been named a Google Small Business Adviser for 2016-present. Follow Brian Wallace on LinkedIn as well as Twitter.

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