If you have ever bought a nice designer bag for less than half its price at a shady corner store then we’re both pretty sure that you own a counterfeit product. But the manufacturing and distribution of counterfeit products nowadays are far more evolved than just selling fake products from a shady corner store. These fraudulent ways of money making are very subtle and it’s almost impossible to distinguish the genuine from the counterfeits. This is not only a problem for the customer. No, the delicate ways of falsification make it even difficult for the seller to make the distinction between a real and a fake product, if they even check the products at all.

Let’s go through some of these fraudulent methods of the dark side of manufacturing.



1. Official retailers sell fake products

Who hasn’t bought a fake Michael Kors bag or that shiny Versace towel on a vacation? Well that was a conscious decision to buy a corrupt product that doesn’t live up to the standards of the brand. Truth is that you’ve probably also bought a fake product when you had the belief that you were buying the real deal. The actual problem is that fake products are even sold by official retailers. We see more and more counterfeit goods that are an exact replica. This makes it almost impossible to distinguish real from fake. Even store owners and salespersons are often not able to determine what is real, because there is no waterproof way to insure authenticity. Recently, Fox news revealed the results of an 11-month investigation on a popular luxury store on fairfax selling well-known streetwear brands. The Los Angeles based store sold counterfeit products from highly popular brands like Rhude, A bathing ape and Fear of god. This even led to an altercation in front of the store when misguided consumers heard about the news. The sales of counterfeit goods seem to happen more often in stores, but even more so online. Online marketplaces like Ebay, Amazon and Alibaba have faced multiple cases of accusation for hosting the sales of counterfeit goods.

2. Midnight shifts

Midnight shifts, also known as Ghost shifts are common phenomena that refer to the manufacturing company taking the intellectual property of the brand to make some products for their own benefit. You might have the belief that fake products are good rip-offs made in a factory next to the factory that makes the actual product. In fact, most of the time the fake product is made in the same company in a illegitimate, fraudulent way. Just imagine you are the CEO of a brand, you give your production partner the order to produce 10.000 brand new bags. The manufacturing partner makes the 10.000 bags plus an extra 10.000 bags for his own, after all you were the one that gave them the recipe. This happens a lot more often than we realise and it’s hardly traceable. So while you’re trying to launch a new product, your “partner” is out there selling copies of your product to sponsor criminal activity.



3. Parallel import

parallel import, also known as arbitrage is used by internal parts of brands to misguide both the customer and the brand. Products are often sold at different prices in different regions. Let’s say that you’re a store owner in Paris. You’re products are sold for higher prices than the same product in China. So what happens with parallel import is that the store owner in Paris buys the products from the Chinese market and then sells it at the European price. This happens under the radar of the brand and thus the owner of the intellectual property, and is therefore also at the expense of the brand.



Most of the products that go through consumer traffic are protected by their intellectual property rights. But these rights do not deal with counterfeiting. For example, Trademark logos can be easily printed on fake products.



Absolute is the only way

The message is clear: If you buy a product that is valuable make sure that you check if the product is authentic. Unfortunately, most products are not equipped with a component that proves the authenticity of the product. But the future is promising. Blockchain technology might offer a solution to this problem. Seal developed the technology that enables customers and distributors to easily and effectively verify the authenticity of any product. The system Seal uses is based on the combination and NFC chips which are integrated to the Seal Network blockchain. By simply scanning the NFC chip with the Seal app the consumer can be sure that he is purchasing a piece of genuine creation.

A well-informed customer can hardly be confused. Let’s enable each other to enjoy genuine creation and actually support the brands that we appreciate.