BrainTrust Query: Fake Products Provide More Than Headaches for Consumers and Independent Retailers
Interesting report on the CBS Early Show on December 18th about the danger of fake goods, especially in the seasonal and electronics categories. The report talks about the danger of selling uncertified electronic items such as extension cords and Christmas lights.
In true exposé style, Susan Koeppen tags along with Maryland Fire Marshals to see if retailers carry these goods. Their first three stops netted goods with no or fake certification labels. The merchants that made it on camera complied with authorities and took down the sub-standard merchandise without incident. Ms. Koeppen ends her report suggesting that consumers can protect themselves by shopping at well known retailers and avoiding small mom and pop shops. Small merchants should take note of this as there are an ongoing quality issues with discount products made in China and elsewhere in the Asian Rim.
So whose fault is this? Who is responsible for selling products that can turn your home into a horrific fireball? Independent discounters and dollar stores purchase their inventory from distributors that source their products from other distributors overseas. Unfortunately for merchants, there is little support and training. Retailers are on their own when it comes to purchasing these types of electronic goods from this type of distribution channel.
Does anyone remember the great lead crayon scare dollar stores were contending with in the mid 90's? Certain lines of crayons contained unacceptable amounts of lead and a recall was announced by federal agencies. Distributors and wholesalers washed their hands of the issue and left merchants to deal with this massive recall. Owners (some with huge language barriers) struggled to understand what was happening and what had to be done. I was working for a regional franchise in the San Diego area at the time. I can remember drafting a memo and having it translated into four different languages. A quick call to some of my clients revealed most didn't know what or who Underwriter's Laboratory was.
Independent merchants are at a huge disadvantage when it comes to purchasing inventory. While big box can enjoy dealing with vendors directly, most independent merchants are acquiring inventory through distributors who do not provide the necessary training and support to their clients. This increases the chance of fake and sub-standard merchandise making it on the shelf. Retailers are not without responsibility though and must do a better job of understanding the products they carry.
Discussion Questions: Are independent retailers at a huge disadvantage when it comes to assuring their inventory isn't counterfeit or sub-standard? What steps could they be taking to assure the public of the quality of their merchandise? Should government agencies or even wholesalers and distributors provide more resources and training to independent merchants?