BrainTrust Query: Fake Products Provide More Than Headaches for Consumers and Independent Retailers
Commentary by Doron
Levy, president, Captus Business Consulting
report on the CBS Early Show on December 18th
about the danger of fake goods, especially in the seasonal and electronics
categories. The report talks about the danger of selling uncertified electronic
items such as extension cords and Christmas lights.
In true exposé style, Susan Koeppen tags along with Maryland Fire
Marshals to see if retailers carry these goods. Their first three stops netted
goods with no or fake certification labels. The merchants that made it on camera
complied with authorities and took down the sub-standard merchandise without
incident. Ms. Koeppen ends her report suggesting that consumers can protect
themselves by shopping at well known retailers and avoiding small mom and pop
shops. Small merchants should take note of this as there are an ongoing quality
issues with discount products made in China and elsewhere in the Asian
So whose fault
is this? Who is responsible for selling products that can turn your home
into a horrific fireball? Independent discounters and dollar stores purchase
their inventory from distributors that source their products from other
distributors overseas. Unfortunately for merchants, there is little support
and training. Retailers are on their own when it comes to purchasing these
types of electronic goods from this type of distribution channel.
remember the great lead crayon scare dollar stores were contending with
in the mid 90’s? Certain lines of crayons contained unacceptable amounts
of lead and a recall was announced by federal agencies. Distributors and
wholesalers washed their hands of the issue and left merchants to deal
with this massive recall. Owners (some with huge language barriers) struggled
to understand what was happening and what had to be done. I was working
for a regional franchise in the San Diego area at the time. I can remember
drafting a memo and having it translated into four different languages.
A quick call to some of my clients revealed most didn’t know what or who
Underwriter’s Laboratory was.
merchants are at a huge disadvantage when it comes to purchasing inventory.
While big box can enjoy dealing with vendors directly, most independent
merchants are acquiring inventory through distributors who do not provide
the necessary training and support to their clients. This increases the
chance of fake and sub-standard merchandise making it on the shelf. Retailers
are not without responsibility though and must do a better job of understanding
the products they carry.
Questions: Are independent retailers at a huge disadvantage when it comes
to assuring their inventory isn’t counterfeit or sub-standard? What steps
could they be taking to assure the public of the quality of their merchandise?
Should government agencies or even wholesalers and distributors provide
more resources and training to independent merchants?