Counterfeiting or duplication is a growing threat which is devouring different industries. Every year companies lose millions of dollars due to the sale of duplicate products. Duplication has entered into every sector and is going to become $1.90 -$2.81 trillion industry by 2022 according to a report by KPMG and FICCI.
Over the years organizations have tried to curb counterfeiting but their efforts have turned futile. In addition, the added costs in fighting fakes come as an extra burden. Besides these issues, there are a whole lot of challenges faced by a company or organization due to duplication. Let’s discuss them in detail.
Loss of sales revenue and profit margin: Sales and profit margins are the veins and nerves of any organization. A company’s success is determined by the number of sales it has earned in a specific time frame. A good number of sales is a visible indicator of a company’s wellbeing and vice-versa. The sale of duplicate items leads to a drop-down in the sale of a company’s products. If it goes unchecked, then it can lead to a complete downfall of the company. Due to multiple sale locations of the product, it is quite hard for a company to trace the manufacturing location of counterfeits.
Poor brand and product image: No wonder, the sale of counterfeits lead to a tarnished image of the brand and its products. The sale cheap fakes lead to a false perception among consumers regarding the quality of the product and the brand. Unaware consumers often think that they are buying original products but instead, they receive fakes.
Added cost on fighting fakes: Companies have to incorporate different strategies for fighting counterfeiting of their products. This comes in the form of added costs for the organization already facing the problem of duplication.