Electronic Retailer - July 2011 - 37

increase your manufacturing costs. An experienced sourcing agent will know precisely who is executing the actual production. If the deal is being outsourced to one or more other players, you’ll not only pay more, you’ll have less and less control over who is producing your product. Obviously this ambiguity increases the risk of counterfeiting.

Preemptive Measures
Despite doing your level best to choose the right sourcing agent, once a marketer has a successful product, it is inevitable that it will be counterfeited. Unfortunately, that means it will be forced to spend significant resources combating the thievery. By choosing the right partners on the front end of the manufacturing process, a marketer can at least begin to isolate the source of the fake goods. It can then focus on combating counterfeiters through a variety of tactics that vary from securing local trademarks, to embedding products with unique technology that is not easy to replicate, to buying its own products from online sources to determine their authenticity and, if necessary, track down the source of bogus goods. The decision to choose your partners wisely is echoed by Greg Sater, an attorney at Rutter Hobbs & Davidoff, who specializes in using legal measures to combat counterfeiting. Regarding the fraudulent practice, Sater comments, “You’re going to have strangers doing it to you, so the last thing you want is to discover that people you thought were your friends are doing it to you, too.” Steven Feinberg is the CEO of SF Global Sourcing (www.sfglobalsourcing.com) and the chair-elect of the ERA Board of Directors. His company specializes in global sourcing of intellectual property via CDs and DVDs, value-added packaging and all of the elements that comprise an offer by leveraging a worldwide partner network. Steven can be reached at 1-855-SF-GLOBAL or steven@sfglobalsourcing.com. 37

let a few pennies put you in harm’s way. Why? Because if all you are trading on is price, in an environment where counterfeiting is this rampant, your so-called partner will be too tempted to take the next, more profitable deal that comes along. An experienced sourcing partner will strike a balance between securing a manufacturing partner with integrity that also provides a solid value. 3. Has been around. The problem with the global sourcing game is that anyone can hang up a shingle and claim they source product. Make sure the partner you choose has a solid reputation and longevity. Global sourcing is a complex business with many intricacies and subtleties, and there is no substitute for experience. 4. Avoids complacency. No matter the sense of trust, it is still incumbent that your sourcing agent has “boots on the ground” and maintains a physical presence at the facility.

Product should be spot-checked on a regular basis to ensure it is being built to specifications. This needs to occur in the beginning of the process and then again later, and again, without notice if necessary, to make sure that there is full compliance and no compromising of materials or construction. 5. Checks security. An experienced sourcing agent will know what sort of security measures are in place to make sure that your product doesn’t get backdoored. This includes staff monitoring to ensure a single bad apple isn’t doing you wrong. A further indication of good management practices is adherence to standards and certification from the likes of ISO 9000. 6. Knows the lay of the land. One thing you want to avoid is a bunch of middlemen taking margin that

July 2011 | electronicRETAILER

Electronic Retailer - July 2011

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