Notorious Markets

It’s officially ‘Notorious Markets’ time again. Every year at this time the U.S. government, by way of the U.S. Trade Representative (USTR), publishes a list of sellers it identifies as being notorious markets. This notorious markets list identifies retailers and online sellers accused of selling counterfeits, as well as those accused of being involved in theft of intellectual property or piracy. For the second year in a row, ecommerce giant Amazon is crying foul for being featured on its notorious markets list and effectively blacklisted by the USTR.

With the years-long battle between the outgoing administration and Amazon CEO Jeff Bezos, it is no surprise that Amazon now claims the designation of five of the company’s foreign sites on the government’s “notorious markets” list in 2020 was little more than political gamesmanship. 

“Amazon has, and always will be, a trusted place to shop for authentic products. Including Amazon in this report is the continuation of a personal vendetta against Amazon, and nothing more than a desperate stunt in the final days of this administration. Amazon does more to fight counterfeiting than any other private entity we are aware of,” the company said in a release.

While the notorious markets report from the USTR has no real legal muscle, it is used as leverage, with the hope of inducing more countries and companies to embrace better enforcement of both online and brick and mortar markets. Forty online sites or companies, as well as markets in 17 countries, ranging from Argentina to Vietnam, are on the 2020 list.

“The Office of the United States Trade Representative highlights certain online and physical markets because they exemplify global counterfeiting and piracy concerns and because the scale of infringing activity in these markets can cause significant harm to U.S. intellectual property (IP) owners, consumers, and the economy,” the USTR states.

So, what does this mean for those of us in the promotional products industry? What does all this mean to you and your client, like the one you might suspect may be shopping your prices against those found online, and possibly buying fakes? I’m certain that you’ve talked with them about the dangers of buying on price alone, as well as the impact of counterfeits on both the economy, as well as potentially on your clients’ brand reputation. That said, I believe that this is an important conversation to revisit with those clients, and with all clients, on an annual basis. 

Even if your market is just around the region instead of around the world, the impact of counterfeits on the market as a whole on both suppliers and distributors can be great. Here are the basics of what I suggest you make it a point now, as a new year begins, to discuss with your clients:

• Losing sales from undercutting prices affects everyone — make it a point not to play in that arena. 

• Counterfeits can cause severe damage to the reputations of authentic brands, many of whom might well be your clients. 

• There can be major fallout from dealing with counterfeit brands, including potential legal ramifications, as well as the risk of potential injuries or even death.

• Long-term term trust is built between clients and their vendor partners over the long term. Engaging in the practice of promoting or selling counterfeit goods can have a significant impact on that trust.

• It costs time and money to fight fakes, including the cost of product recalls that are a very real possibility. There’s also expert PR assistance brought in to deal with the reputational bad publicity that is an inherent part of recalls. The risk is, most definitely, not worth the prospective gain.

These are important strategic considerations for brands and, as their trusted promotional products vendor partners, it is incumbent upon all of us to help guide them to making smart decisions and protecting their companies. “Brands have never been more vulnerable to the issues of online counterfeiting, piracy, and distribution fraud” said Red Points CEO Laura UrQuizu. In fact, Red Points is working with businesses worldwide to protect their assets across online distribution channels by using artificial intelligence and machine learning to help detect and remove counterfeits.

Finally, a “counterfeits don’t really hurt anybody” attitude is not going to cut it. The International Chamber of Commerce estimates that the global economic value of counterfeiting and piracy could reach $4.2 trillion by 2022, and put more than 5 million legitimate jobs at risk over that same time period. The ICC adds that there are serious unintended and damaging effects counterfeiting causes, like exploiting child labor and increased pollution. It’s both the unregulated manufacturing, and the large quantities of counterfeits seized by law enforcement that are often destroyed by incineration. You can position yourself as part of the solution, for yourself and for your clients, by pointing them towards responsibly-sourced products that are both good for the environment and safe for end-users.