The majority of the world’s consumer electronic goods are produced in China, so it should come as little surprise that about 75 percent of all fake goods come from there as well. Counterfeit goods already constituted a major issue before 2020, but the COVID-19 pandemic made things infinitely worse.

During the pandemic, containers piled up at shipyards because there weren’t enough dockworkers available to unload them – and just as things appeared to be improving, a major semiconductor shortage further impaired manufacturers’ ability to meet the demand for electronic products. Manufacturers faced higher costs for almost everything, and those costs were inevitably passed on to distributors, retailers and consumers.

Although things seem to be looking up for manufacturers and distributors these days in terms of their ability to obtain supplies and finished products, prices seem to have risen to “new normal” levels that remain higher than they were before the pandemic. For example, although fuel prices have decreased from the levels that they reached in 2022 after Russia invaded Ukraine, the overall cost of ocean shipment is about the same now as it was two years ago. The end result is that distributors have to charge higher prices, and those prices inevitably filter down to retailers and consumers.

If you operate a business in the retail sector, you’ve already witnessed the consequence of the supply chain disruptions and higher manufacturing and shipping costs firsthand over the past few years. The consequence is a massively increased proliferation of fake goods. You probably receive an email almost every day from a distributor or wholesaler you’ve never heard of that claims to offer products at far lower than what you’re currently paying. There’s a good chance that something fishy is going on.

So, how can you identify a distributor that claims to offer a solution for your supply chain issues but is in reality just peddling fake products – and why should you be worried about purchasing counterfeit goods in the first place? In this guide, we’ll explain everything that you need to know.

Understand the Importance of Avoiding Counterfeit Products

In order to avoid buying fake products from a distributor or wholesaler, the first step is to understand why sourcing counterfeit goods is such a major problem for a retailer in the first place. Here are the three biggest reasons why selling authentic goods is so important.

• Counterfeit goods are likely to be inferior to the official versions of those products, and your customers won’t have a good experience with them. You’ll experience increased customer churn as people decide not to buy from you again.
• If your business is found to be selling fake products, it’ll hurt your reputation. It could be difficult to recover from that kind of damage.
• If you sell fake products that are unsafe to use and end up injuring your customers, your business could be held liable for the damages.

Know What Brands Are Most Heavily Counterfeited

The first way to avoid sourcing counterfeit products for your retail business is by arming yourself with knowledge. You need to know which brands are most heavily counterfeited in your industry and what products from those brands are typically faked. For example, Apple is one of the most heavily counterfeited brands in the computer and phone industries. Geek Bar is one of the biggest victims of counterfeiting in the vaping industry. No one makes fake versions of brands that people have never heard of because there’s no consumer demand for those brands.

It’s also important to remember that when it comes to things like fake Apple products, factories aren’t actually producing counterfeit iPhones. They’re making accessories like fake phone cases and charging bricks. Counterfeiters like to choose products that are inexpensive, disposable or frequently replaced because consumers aren’t likely to examine those types of products closely. Duracell batteries, for instance, are very heavily counterfeited.

Evaluate Distributors Carefully Before Working with Them

When evaluating a distributor that you’re potentially interested in working with, it’s important to use a critical eye – particularly if their price structure is so attractive that it seems too good to be true. Here are some of the key things that you should consider before placing an order if you want to avoid fake products.

• Do you know where the distributor is located? Does Google have a Street View photo that you can look at to confirm the address is real?
• Does the distributor provide multiple contact methods that you can use? Do you know the name and contact information of your personal sales rep?
• Can you obtain testimonials from other business owners who have worked with that distributor?
• Is the distributor willing to send sample products that you can use to verify quality and authenticity?

Know the Official Suppliers for the Brands You Carry

If you want to carry products made by a specific brand, it shouldn’t be too hard to confirm who that brand’s official distributors are because the brand’s website should have a list. You can probably find it on the website under a link with a title like “Partners,” “Distributors,” “Suppliers” or “Where to Buy.” If you’re not sure about a particular distributor, contact the brand and ask if they’re an official partner. This is usually a nearly fool-proof way to ensure that the products you’re buying will be authentic.

Inspect Shipments Before Signing for Them

The final way to ensure that you’re not getting fake products from a distributor is by examining them yourself – and you should always examine a shipment before signing off on it. As you check the goods, here are some of the things that you should look for.

• Poor packaging quality: Fake goods are often packaged in flimsy boxes that have washed-out colors and blurry text.
• Poor fit and finish: Fake products aren’t produced according to the same standards as authentic products and may have parts that rattle or don’t fit together properly.
• Product mismatch: If the product inside the box doesn’t match the picture shown on the outside of the box, that’s a major red flag.
• Anti-counterfeiting code: Many types of products have anti-counterfeiting codes on their outer boxes, and you should do a spot check before approving the shipment. Go to the manufacturer’s website and check a few of the codes on the boxes. If the codes are all different from one another and all pass, the products are likely to be authentic.