In 2016, Trisha Torres, vice president of a small Rhode Island-based company called Aspects, received a troubling call from a customer. The customer had bought an Aspects hummingbird feeder from Amazon, but the product wasn’t working as expected. When Torres investigated further, she discovered the feeder was a fake. It looked like her company’s product, carried the Aspects name, and even included their phone number. Yet, it was a poorly made replica imitating their high-quality product. And this was just the tip of the iceberg.
Despite Aspects’ 40-year history of being in business, the brand found itself dealing with a wave of counterfeits that flooded online platforms with such fake versions of their product. Over the years, these fakes cost the company an estimated $1.5 million in lost sales.
This nightmare scenario isn’t unique to Aspects. It highlights a disturbing trend: fake goods are no longer a problem just for big, luxury brands. It’s hitting businesses of all sizes, and it’s spreading like wildfire.
Counterfeiting: Not just for big brands anymore
At first, counterfeiting seemed like a problem that only affected big companies—luxury fashion labels, high-end tech products, and sneakers with famous logos. But the landscape has changed. Now, counterfeiters are targeting small and medium-sized businesses (SMEs), especially those with something unique to offer.
SMEs are particularly vulnerable to the impacts of counterfeiting. A report by the European Union Intellectual Property Office (EUIPO) and the Organisation for Economic Co-operation and Development (OECD) highlights that SMEs whose intellectual property rights are infringed by counterfeiters are 34% less likely to survive as a business after five years compared to those that are not affected by counterfeiting.
Smaller brands often lack the legal resources to protect their intellectual property or the marketing budgets to fight against the myriad of fake ads. A counterfeit product may be sold for much lower prices, enticing customers who don’t realize they’re being scammed. Once a fake product hits the market, it can erode trust, leading to lower sales and a damaged reputation that can be difficult to recover.
How fake products spread across the internet
Fake products are spreading faster than ever, and online counterfeiters are getting smarter about how they do it. One of the easiest ways they deceive buyers is through fake social media accounts. These accounts often look identical to those of well-known brands, promoting exclusive, limited-time deals that create a false sense of urgency, prompting customers to make quick purchases. Once the deals are over, these pages are often shut down and quickly replaced by new ones.
Another method is typo-squatting, where counterfeiters create a domain name that looks almost identical to the real one but with slight differences, like “officialbrand.com” becoming “officalbrand.com.” These small changes are enough to fool customers who may not notice the misspelling, but can lead them to fake websites where they unknowingly purchase counterfeit products.
Online marketplaces provide yet another opportunity for counterfeiters to take advantage of unsuspecting consumers. By creating fake store pages, they can easily post counterfeit products that mimic those of legitimate brands, often with attractive prices. These fake listings blend in with the real ones, making it difficult for customers to differentiate between what’s authentic and what’s a fake.
How small businesses can safeguard themselves
While it might feel overwhelming, there are several steps small business owners can take to protect their brand and mitigate the risk of counterfeiting.
Trademark your brand and best-selling products
The first step in protecting your business from counterfeiters is to register your trademarks. Trademarks protect your brand name, logo, and even product names from unauthorized use. With a registered trademark, you have legal grounds to stop counterfeiters from selling fake versions of your products and can take legal action if needed. Having a trademark also makes it easier to prove that a product is counterfeit and not a legitimate item from your business.
Before committing to a full registration, you can easily submit your mark for a free lawyer’s check, to ensure you have the highest chance of a successful registration.
Monitor your brand online
Brand monitoring is essential for staying on top of counterfeiting issues. Regularly monitor online marketplaces, social media platforms, and the web for counterfeit listings. There are several tools available for brand monitoring, such as Google Alerts, that can help you track when your brand name appears online. Dedicated services like Trama offer an easier solution that scans key platforms for misuse and can provide tailored recommendations on how to address any infringements it finds.
Use brand protection tools on marketplaces
Online platforms like Amazon, eBay, and Etsy offer brand protection programs to help businesses fight counterfeiting. These programs allow you to report counterfeit listings and get them removed quickly. In many cases, you can also enroll your products in these platforms’ trademark programs, which automatically detect counterfeit listings and flag them for review.