Effective Measures to Counter Product Counterfeiting

If statistics are to be believed then counterfeiting is a 600 billion dollar problem. It is such a big and

successful business that in the past two decades, its growth has been over 10,000 percent. Hence, the

Federal Bureau of Investigation (FBI) has termed product counterfeiting as the crime of the 21st

century. Though many people disagree, the fact of the matter is consumers have played a significant

role in the growth of product counterfeiting. Cheap prices and easy availability are the two important

factors that induce people to go for counterfeits. However, by doing so they are indirectly being part

of nefarious activities like organized crime, drug trafficking, terrorist activity and so on. Besides that,

they contribute to unemployment, child labor, budget deficits and compromising the future of the

country that they live in. Here is a look at some facts to understand the necessity of anti

counterfeiting solutions.

● Since 1982, the global trade in illegitimate goods has increased from $5.5 billion to

approximately $600 billion annually.

● Counterfeiting costs U.S. businesses $200 billion to $250 billion annually.

● U.S. companies suffer $9 billion in trade losses due to international copyright piracy.

● Counterfeit merchandise is directly responsible for the loss of more than 750,000 American

jobs.

● Approximately 5%-7% of the world trade is in counterfeit goods.

● Counterfeiting poses a threat to global health and safety.

In 2012, the Department of Homeland Security and its agencies, Customs & Border Protection (CBP)

and Immigration & Customs Enforcement (ICE) carried out 22, 848 seizures and the MSRP

(Manufacturer’s Suggested Retail Price) of the seized goods was $1.26 billion. However, it’s just the

tip of the iceberg. Though it’s difficult to nip the problem of counterfeiting in the bud, original

product manufacturers (OPMs) can put in place effective countermeasures to reduce its market’s size

and scope. Here are some of them.

● OPMs must partner with dealers, customers and customs officials to shut down the violators.

Educate customers and dealers about counterfeit products and ways to identify it.

● Starting a reward system for dealers who report counterfeit products is also a good move.

● Since a great part of counterfeiting is done online, OPMs must deploy enterprise risk

management solutions to monitor activity for any number of products globally. It picks up

pricing, discount percentages, quantities for each product and provides the data in user

configurable charts. As it quickly identifies the companies that are causing loss of revenue,

brand erosion and customer dissatisfaction, OPMs can quickly reduce the impact of product

counterfeiting on them.

With counterfeiting being the greatest menace faced by enterprises and customers alike, effective

measures in tune with those suggested above becomes highly imperative.

Read More About: brand management, gray market, Anti-Counterfeiting