How Can Counterfeit Products Harm You?
The world we live in today is saturated with brands. Every brand has its own unique image and message; often recognizable from afar. Despite enhanced brand awareness, the business of counterfeit products is one of the largest underground industries in the world. And it continues to grow. These businesses incur a low overhead cost while enjoying high profits. Obviously, there are efforts underway to shut them down, but the network is too large to make it happen within a short period of time. Instead, better technologies and awareness campaigns are being run so the consumers can avoid such products. Another reason for the inability of stopping such distributors is their aggressive behavior. The best course of action seems to educate the consumers against them, so the industry automatically suffers economically and fades away.
Harmful Effects of Counterfeit Products
For the average consumer, counterfeiting may be limited to watches, handbags or paintings. However, the actual network is far and wide. In fact, one of the biggest problems of the present is mock medicines. Additionally, counterfeit products feature electronics, software, clothing, etc.
Here is how the counterfeit industry is negatively affecting everyone involved in the business industries:
- The American businesses lose billions in revenues each year. The reason is that fraudulent distributors sell lesser goods, which don’t perform well. This reduces the sales for the original products; driving actual brands into incurring losses. It also unfairly impacts the repute of the brands.
- Counterfeit products negatively impact the overall economy of the country. The knock-off products are cheaper. This allows the competitors of the original brands to steal their intellectual property without complying with quality standards, paying taxes, and meeting other required regulations.
- Original brands are liable to pay taxes, which are then used for public interest like building roads, schools, etc. Less public money means there will be lesser facilities for the improvement of the quality of life.
- Not only brands lose revenue due to counterfeiting but employees lose jobs. While some will be able to find new jobs, a large number either can’t find sufficient jobs or remain unemployed for long periods of time.
- The production of counterfeit products also negatively impacts the e-commerce industry. The Internet is one of the major players in selling and buying of knock-offs. People are likely to avoid online buying if they are not sure of the authenticity.
- One of the major problems due to the counterfeit industry is the fake medicines. It is highly threatening to the health and safety of the people. Additionally, it lowers the revenues of the drug manufacturers, which lowers their funding for further research regarding health issues plaguing our communities. Even more, the network of fake medicines undermines the repute of health and safety authorities.
The Blockchain technology can be used for the prevention of counterfeit products. It can help both brands and consumers to track the lifecycle of any product. It may take a few years to implement this technology, but it will prove to be highly effective.