Sales, Counterfeit Products, Exporting and Trafficking

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Introduction:

Counterfeiting of products is consumer fraud where products often of inferior quality are manufactured and sold under a brand name without authorization from the owner of the brand. Over the past two decades counterfeit products have been increasing at a high rate with counterfeiting shown to cost the U.S. Economy between $200 billion to $250 billion annually and also responsible for the loss of more than 750,000 American jobs and posing a serious threat to the safety and health of the public. Counterfeits costs companies billions of dollars and despite strict regulations in the global economy over counterfeiting, the practice has not dropped but has become even more rampant (International trade Administration, 2011). This paper analyses how counterfeiting affects the way goods are sold by looking at how a company can experiences a drop in sales, how counterfeit products affect the real product, how a company can rid of Counterfeiters, and why China is the main exporter of counterfeit goods. It also analyses the process of trafficking.

How a company experiences a drop in sales and how counterfeit products affect the real product:

Counterfeiting affects the sales of a company as it steals sales that would have been made to the company. When a consumer purchases a counterfeit product believing that the product is authentic, the money received for the products goes to the counterfeiters rather than the real company owning the brand under which the product is sold. Companies invest millions of dollars in developing their intellectual property and trademarks through research and development and establishing their brands in the markets. Illegitimate products riding on their brands therefore costs the companies a lot of money whereby though the brand is selling in the market, in the real sense their products is performing dismally with the sales not able to cover the costs of developing and establishing the brand in the market. In essence, companies are covering the marketing costs for the counterfeit manufactures who simply ride along and offer products at a lower price that the authentic product. Aside from that, companies can also loose sales where substandard counterfeit products damage the market place equity of a brand by hurting ...