Counterfeit sales—easier than ever to perpetrate through online auctions, B2B exchanges, and eCommerce sites—now comprise between 5 and 7 percent of world trade, posing a serious threat to your revenues, channel relationships and bottom line. Fortunately, it's possible to choke off these illicit sales by addressing both the criminals' promotional efforts and their distribution channels. Read this guide to learn seven best practices to combat counterfeit sales online.
What's unique about online counterfeit sales is the power of the promotional channel, where counterfeiters perpetrate a wide range of online brand scams—paid search scams, cybersquatting, spam and others—to lure consumers away from legitimate sellers.
White Paper Seven Best Practices for Fighting Counterfeit September 2010 Sales Online
Executive Summary
1Counterfeit sales represent 5 to 7 percent of world merchandise trade today . The damage these sales do to rightful brand owners goes well beyond revenues and profits: numerous reports have suggested that counterfeit and piracy trade supports terrorism, organized crime and other threats to both national security and human rights. Now, the Internet's rapid growth-along with its instant global reach and anonymity-has significantly escalated the situation.
An entire online supply chain, parallel to legitimate distribution channels, has flourished around counterfeit goods. Online B2B exchanges, in addition to eCommerce sites-many promoted via social media and search engines-commonly traffic in counterfeit goods. Fake products acquired on wholesale sites are sold on auction sites, or at flea markets and shops in the physical world.
Deceptive use of proven marketing techniques-paid search ads, search engine optimization, unsolicited email, the use of branded terms in domain names and more-are important parts of this illicit ecosystem, as savvy counterfeiters apply marketing best practices.
Fortunately, brand owners can adopt their own proven best practices to successfully combat online counterfeit sales. Technology exists for identifying and quantifying worldwide online counterfeiting activity-in both promotion and distribution-as it affects a specific brand. Once visible, infringement can be prioritized and attacked. Unlike anti-counterfeiting strategies in the physical world, however, a two-pronged approach is necessary: brand owners must choke off counterfeit sales at both promotional and distribution points.
The battle against online counterfeit sales can be won. With billions in revenues, critical customer loyalty, and even public safety and human rights at stake, it must.White Paper: Fighting Counterfeit Sales Online
Contents
Counterfeiting: A Growing Online Threat ..................................... 3
Counterfeiting's Real Cost to Business ................................... 3
How Counterfeiting Thrives Online ............................................... 4
Beating Back Counterfeiters Online: Seven Best Practices....... 5
Conclusion: The Fight Is Yours to Win ......................................... 9
2White Paper: Fighting Counterfeit Sales Online
Counterfeiting: A Growing Online Threat
"If you can make it, you can fake it." Unfortunately, the old saying is all too true. Sales of counterfeit goods affect a wide range of industries, from high-margin luxury and technology goods to low-margin consumer goods like batteries, shampoo, gasoline and food.
The problem is growing, in part because the volume of fake goods produced is rapidly increasing-especially in countries like China, where manufacturing capacities continue to skyrocket (89 percent of seized counterfeit products 2originate there).
This growth in supply helps fuel the exploding demand-especially online. The Internet's rapid growth-along with its instant global reach and anonymity-has significantly escalated the situation, moving the sale of counterfeit goods from the local street corner to a global marketplace. Because criminals can quickly and easily set up eCommerce storefronts or place listings on B2B exchanges and on auction sites-with only minor expense-their activities will likely cost legitimate businesses $135 billion in lost revenue this year.
Counterfeiting's Real Cost to Business
According to the secretary general of the ICC, multinational manufacturers lose 3roughly ten percent of their top-line revenue to counterfeiters -but the impacts go well beyond the revenue hit. For some companies, perceived brand value suffers when knock-offs become plentiful. Brands may even lose representation in distribution channels when resellers and affiliates see a reduction in demand due to competition from fakes. Additionally, the availability of cheaper, albeit fake alternatives can exert downward pressure on legitimate brand pricing.
Other impacts include product safety issues-especially in pharmaceutical, automotive, aviation, healthcare electronics and similar industries-accompanied by increased legal liability risks. And as consumers experience quality problems with fake goods, the legitimate brand's ... [download for more]
