Deal With Counterfeiting In The Supply Chain Using These 4 Strategies

The trend of counterfeits in the supply chain has become a big problem and only gets worse with time. The expansion of markets and opportunities has unfortunately encouraged the growth of counterfeit goods and the theft of companies’ intellectual property too. False labelling of products, fake materials and components used to make products, and the inappropriate use of another’s trademark are all just a few examples of how counterfeit goods and the theft of intellectual property destroys the company and customers.

You may be wondering if your company has a counterfeit problem or not and the questions that will help you answer that are:

  • Do you have a well-known or emerging brand?
  • Does your product have a high profit margin?
  • Is there an unexplained increase in returns or customer complaints?
  • Does your brand have a market share where you are not even doing business?
  • Have you lost market share in a particular region for a well-known product?

Answering “yes” to one or more of these questions puts you in a place where you are most likely encountering a counterfeit issue. Noting that your company has this problem is the first step and that is then closely followed by a strategic plan that includes a multifaceted anti-counterfeit program. This program should have four major attributes, and these are education, partnership, practical measures and enforcement.


Education serves as awareness of the dangers of using counterfeit products and assists others to understand the distinctive qualities of the company’s products a bit better. An example of this would be to put up information on the company’s website that educates consumers and explains how to identify and avoid counterfeit goods. The organization can also provide border control, police and distributers with product authentication training that will teach them how to recognize counterfeit products.

Teaching consumers about the company’s products, reminding them of the intellectual property rights and the potential consequences of using fake goods such as infringement actions, will try diminish the urge to use counterfeit goods. Education can facilitate answers to frequently asked questions, tips on how to spot fake goods and contact details of a source that will answer any queries raised by consumers. This all allows companies to take control in preventing the purchase of counterfeit goods.


Building a partnership with enforcement, taxing agencies and the police enables companies to wage a fight against counterfeit goods. As mentioned, businesses can provide training that extends tips on how to identify a fake product & from then on can also give enforcement agencies samples of their legitimate products to assist with the work.

Allowing the use of the company’s labs or facilities propels the training and education of enforcement agencies, industry organizations and clients forward. This creates improved working relationships and also gives ground to the showcase of your products and their unique features.

Secondly, working hand in hand with industry organizations can help the company ensure authenticity of the supplied raw materials and component parts. Organizations can discourage fake products by making use of well-known suppliers with whom there’s consistent confidentiality with. There should also be supply agreements in place, along with spot audits. Competitors are also parties you should consider joining forces with too so there’s a presented business front against counterfeiting. This could mean reducing legal expenses by fighting forgers together in court.

Lastly, local recycling organizations may help you come up with programs encouraging deterring counterfeit goods. These recycling programs will ensure packaging is recycled and not reused by counterfeiters.

Practical Measures

Practical measures can be taken to emphasize anti-counterfeiting procedures. Technology is the best way to fight counterfeits. What can be included can be smart cards, holographic images, colour-shifting inks, RFID tags, UV inks, digital decoding, electronic tax verification systems, unique identification codes on packages that match the code on the packaged goods, and tracking and tracing systems. Paper tickets and cardboard passes that have a high risk of being duplicated could be replaced with smart cards. Holographic imaging, colour-shifting inks and UV inks are methods used to prevent counterfeit currency. RFID tags that have unique physical characteristics can be embedded in products for secure identification purpose and marketing. Companies that deal with medication intended for human use normally have a track-and-trace system that tracks and provides serial numbers to sealable packages. This system enables manufacturers to know where a package has been sold or delivered.

Other practical steps you can take are checking in with the company’s agents, distributors, suppliers and important role players who know about local conditions of the goods and services being dealt with. They can help identify potential risk for counterfeiting and can come up with preventative measures. Manufacturers are always in the best position to immediately recognize fake goods. Additionally, you can also establish audit controls to ensure the supplier is not an enabler too; set up a product purchase program for purchasing samples on a random basis to help identify problems; monitor the internet for potential sale of the fake products; follow up on quality control issues to identify such goods; and have a product library in place that has marketing materials and products for potential use in future infringement actions.


The last component is enforcement. This means registering your intellectual property like your trademarks, and recording the trademarks with the appropriate customs agencies. Offer support too to law enforcement and regulatory agencies with training that assists in finding and stopping counterfeit goods. Notify the counterfeiters when fake products are found out and take court action against them to protect the company’s brand and products.


Take note of our Checklist: Four Items To Spot Supplier Risk During Pickups and Deliveries.


Source: supplychainminded