While it’s not likely that you are sourcing products that fail on all three counts in the news right now, fake, prison-made, or products that include restricted substances, it IS, of course, possible. You should be so lucky.
We’ve talked before about the difference between gray market and counterfeit goods. While gray market items imported into the U.S. are not necessarily counterfeit, and while it’s not illegal for you to source them, they are still being imported without the consent of the trademark holder. That means they could be manufactured to standards lower than expected by your clients in the U.S. market. As for the absolute fakes, new research by MarkMonitor reveals that nearly a quarter of consumers are now unknowingly receiving counterfeit goods. The research found that not only did 45 percent of consumers express concern about unknowingly buying a counterfeit product, nearly all of them (91 percent) said they wouldn’t knowingly purchase a product that was. Remember, your clients are consumers, too. If your client doesn’t want to purchase a fake, the last thing you want to do is help them unwittingly do just that. Counterfeiters can reduce legitimate sales, mute brand exclusivity, and hurt brand goodwill. Are your clients buying online, when they’re not buying from you? According to Statista, global e-retail sales were $2.3 trillion in 2017, and it will be in the range of $4.48 trillion by 2021.
How would you respond if your client found a note from a prison worker in a bag you sourced for them? Sounds crazy, I know, but it happens. And it could happen to you if you are sourcing directly from China. In more than a few instances, a note allegedly detailing deplorable working conditions has been found in a handbag purchased at a big box retailer. Whether it’s Walmart, Saks Fifth Avenue, Zara or even an SOS letter in Halloween decorations last year at Kmart, the messages are hauntingly similar. The note is purportedly from a Chinese worker performing forced labor under horrific conditions and written in hope the American consumer who finds it will publicize the situation. Found inside a purse purchased at Walmart, the note that went viral from a Facebook post translated to: “Inmates at the Yingshan Prison in Guangxi, China work 14 hours a day and are not allowed to rest at noon. We have to work overtime until midnight. People are beaten for not finishing their work. There’s no salt and oil in our meals. The boss pays prisoners 2,000 yuan every month. The food is all consumed by the prison guards. Sick inmates who need medicine get their pay deducted. Being imprisoned in China cannot be compared to a horse, cow, goat, pig, or dog in America.”
What caught our eye this time is a lengthy expose by a reporter for online media outlet Vox, who actually traveled to the prison named in the letter. The story appears to be a catalyst for Walmart to come to terms with the problem of forced prison labor in its supply chain. Originally, a Walmart spokesperson told NBC affiliate KVOA that the company was unable to comment because it had “no way to verify the origin of the letter.” Vox contributor Rossalyn A. Warren traveled to Guilin City in the Guangxi region of southern China. When Warren spoke with residents who lived near the facility, she confirmed that the prison did exist, and that it indeed forced inmates to make products. Trucks from Guangdong Province would regularly drive fabric in and out of the prison. When Warren contacted Walmart for the story, the company informed her that it launched an internal investigation following the news of the letter.
In a statement published by Vox, Walmart said, “Through our investigation into this matter, we found the supplier’s factory sent purses to be made at other factories in the region that were not disclosed to us. The supplier failed to follow our standards, so we stopped doing business with them. We take allegations like this seriously, and we are committed to a responsible and transparent supply chain. There are consequences for our suppliers when our standards are not followed.” Walmart didn’t say whether or not the supplier had contracted with the Yingshan prison.
How does this impact you and your customers? You likely know that supply chains that lead from Chinese factories are anything but transparent. If you choose to do business with Chinese factories, it’s imperative to work to get the information necessary to validate every link in the supply chain and avoid becoming an unwilling part of the slave labor economy. Chinese manufacturers openly advertise the use of prisoners for labor, as documented in an April 2018 report by the World Organization to Investigate the Persecution of Falun Gong (WOIPFG). The organization has documented numerous cases where practitioners of Falun Gong, a spiritual meditation practice that is banned and severely persecuted by Beijing since 1999, were sentenced to forced labor camps or prisons where detainees were forced to make products for export. This is an important issue for promotional product distributors, and you need be aware of, and get involved in the solution.
Finally, while you may recognize Amazon as a growing competitor, it’s important to acknowledge the power of the brand’s influence when it comes to product safety in general. As part of Amazon’s commitment to responsible sourcing, Amazon has just posted its chemicals policy, which includes its first Restricted Substance List (RSL). Amazon defines chemicals of concern as those chemicals that: (1) meet the criteria for classification as a carcinogen, mutagen, reproductive, or other systemic toxicant; or (2) are persistent, bio-accumulative, and toxic. Amazon has chosen to focus on chemicals “based on product type, customer concerns, and the availability of safer alternatives.” The initial list of chemicals of concern included on the RSL are chemicals to avoid in Amazon-owned Private Brand Baby, Household Cleaning, Personal Care, and Beauty products in the U.S.
What is important to our industry is the fact that we closely follow retail trends, and as Amazon expands the policy to additional brands and product categories, it won’t be long until we see the effect on promo products you’re sourcing. Equally as important, don’t miss the implications here and the competitive advantage Amazon is working to establish with regard to its Amazon-owned privately branded products. Here is a direct quote from their Sustainability Policy:
Amazon strives to be the earth’s most customer-centric company. We are committed to developing high-quality and affordable Private Brand products that customers love.
Amazon is planting its flag in sustainability with regard to its private brand products. If customers have to make a choice between products viewed as safe and sustainable compared to tossing the dice in terms of the supply chain—well, as I’ve discussed many times before in this column, I’m pretty sure where the decision is going to fall. If you’re not putting supply chain sustainability at the top of your priority list, it seems to me like a great time to start.
Jeff Jacobs has been an expert in building brands and brand stewardship for 40 years, working in commercial television, Hollywood film and home video, publishing, and promotional brand merchandise. He’s a staunch advocate of consumer product safety and has a deep passion and belief regarding the issues surrounding compliance and corporate social responsibility. He retired as executive director of Quality Certification Alliance, the only non-profit dedicated to helping suppliers provide safe and compliant promotional products. Before that, he was director of brand merchandise for Michelin. You can find him volunteering as a Guardian ad Litem, traveling the world with his lovely wife, or enjoying a cigar at his favorite local cigar shop. Connect with Jeff on Twitter, LinkedIn, or Instagram, or reach out to him at jacobs.jeffreyp@gmail.com.