How to Utilize AI to Combat Counterfeiting

Global Logistics, Global Trade Daily, Uncategorized

How to Utilize AI to Combat Counterfeiting

May 8th, 2023 Bernard Klein Leave a comment

Counterfeiting is a serious problem that affects many industries, particularly those that rely heavily on supply chain management. In the manufacturing industry, counterfeiting involves the production and distribution of fake products that are intended to imitate legitimate goods. One of the biggest challenges with counterfeiting is that it can be difficult to detect. Often, counterfeit products will look and feel like the real thing and may only be discovered once they have been sold and used by consumers. This not only exposes consumers to potential harm, but it can also damage the reputation of legitimate companies and manufacturers.

There are many ways in which counterfeiting can occur within the supply chain. One common method is through the use of fraudulent identification, which allows counterfeiters to obtain unauthorized access to supply chain networks. Once inside the network, they can introduce counterfeit goods into the system, often under the guise of legitimate products. Another way that counterfeiting can occur is through the manipulation of existing products. This can involve the alteration of labels, packaging, or even the product itself in order to make it appear as though it is genuine. In some cases, counterfeiters may even go so far as to replicate entire products using inferior materials or components.

In order to effectively combat counterfeiting in the supply chain and manufacturing industry, it is important to take a proactive and comprehensive approach. This might involve implementing new technologies and processes, as well as building strong relationships with key stakeholders. By doing so, manufacturers can help to protect their customers, their reputation, and their bottom line. Advancements in technology have provided another strong element in the fight against counterfeiting. There are a variety of ways that technology can be used to allow both manufacturers and consumers ensure they are buying and selling authentic products.

One strategy that manufacturers and supply chain managers can employ, to combat counterfeiting, is to invest in robust authentication and verification technologies that can help to detect counterfeit products. This might include using unique identifiers, such as serial numbers or barcodes, that can be tracked and verified throughout the supply chain. Another important strategy is to establish strong relationships with suppliers and other partners within the supply chain. By working closely with these stakeholders, manufacturers can gain greater visibility into their operations, and can more effectively identify and address potential risks related to counterfeiting. A third approach to combating counterfeiting is to educate consumers on how to identify and avoid counterfeit products. This can be done through various channels, such as product packaging, social media campaigns, and informational websites. Finally, manufacturers can work with law enforcement agencies to investigate and prosecute those involved in the production and distribution of counterfeit products. By taking legal action against counterfeiters, manufacturers can send a clear message that counterfeiting will not be tolerated.

One key aspect of combatting counterfeiting is by utilizing technology. Many companies have been implementing a robust tracking and tracing system in the supply chain, which can help to identify the source of counterfeit products and prevent them from entering the market. This can involve using serialization, unique identifiers, and other advanced technologies to track products from the point of origin to the end consumer. By implementing a comprehensive tracking system, manufacturers can quickly identify and isolate any counterfeit products that are detected in the supply chain, minimizing the potential impact on consumers and the company’s reputation.

Advancements in technology have also greatly impacted the ways that consumers themselves are able to authenticate products. For example, some brands now use blockchain technology to track the entire supply chain of their products, from raw materials to finished goods. This provides a secure and transparent way for consumers to verify the authenticity of their purchases. Additionally, some companies have developed smartphone apps that allow consumers to scan product codes or labels to instantly verify their authenticity. These tools make it easier than ever for consumers to make informed purchasing decisions and avoid counterfeit products. Another way that technology has impacted authentication is through the use of advanced security features, such as holograms, RFID tags, and smart labels. These features can be embedded within products or packaging to provide unique identifiers that are difficult for counterfeiters to replicate. Finally, some companies are exploring the use of digital fingerprints and other biometric data to further enhance product authentication. As technology continues to evolve, we can expect to see even more innovative solutions for authenticating products and protecting consumers from counterfeit goods.

Another important way that technology has impacted authentication is through the use of artificial intelligence and machine learning. There are several ways that AI can help consumers identify counterfeit goods. AI can help consumers identify counterfeit products by analyzing various data points and patterns to quickly and accurately distinguish authentic products from counterfeit ones. AI algorithms can also compare product codes or labels to instantly verify their authenticity. This can help brands and retailers to proactively detect and prevent the distribution of counterfeit goods. This also makes it easier for consumers to make informed purchasing decisions and avoid fake products that might be harmful or of inferior quality.

Another method is to use machine learning algorithms to analyze product data and detect patterns that indicate counterfeit activity. This can involve analyzing product images, descriptions, and other data to identify anomalies that suggest a product is not genuine.

Additionally, AI-powered chatbots can assist consumers in real-time by providing them with information about a product’s history, authenticity, and other key factors. AI-powered chatbots can use natural language processing (NLP) to understand and respond to consumer inquiries about a product’s authenticity. These chatbots can access a variety of data sources, including blockchain records, to provide consumers with real-time information about a product’s origin, production history, and other key details. By using AI-powered chatbots, consumers can quickly and easily get the information they need to make informed purchasing decisions, reducing their risk of buying counterfeit goods. Additionally, chatbots can provide personalized recommendations and deals based on a user’s shopping habits, further enhancing the shopping experience. By leveraging the power of AI, consumers can become more informed about the products they are buying, reducing their risk of falling victim to counterfeiters.

Overall, preventing and detecting counterfeiting requires a multifaceted approach that involves the use of technology, strong relationships with suppliers and partners, education for consumers, and collaboration with law enforcement agencies. With these strategies in place, manufacturers and supply chain managers can better safeguard their products and reputation from the negative effects of counterfeiting. Technology, specifically advancements in AI technology, has made it easier for consumers to verify the authenticity of products and has helped to protect both individuals and businesses from the harmful effects of counterfeiting. Utilizing all these resources and with increased help and sophistication of AI methods, manufacturers and consumers can be confident that they are buying genuine products and are protected from the risks associated with counterfeiting.

Bernard Klein is the president of Almont Group Inc. A dedicated father of three, he finds time to run and box while running a successful company that helps clients’ source goods overseas.

Archives, Global Trade Daily, International Trade

Guards Needed in the Group Chat: PPE and Counterfeiters

January 29th, 2021 Bernard Klein Leave a comment

WhatsApp is great. It’s so great, in fact, that it is the dominant messaging application in over 169 countries. If you’re one of its 2 billion users, you know the edge it has over other messaging apps. WhatsApp is appealing for several reasons: it has an easy-to-use interface; users can send messages, photos, video, and voice notes, and make voice calls; and perhaps most importantly, all of this is free.

Additionally, there are a host of features that appeal to businesspeople. Since WhatsApp works on Wi-Fi, it supports messaging and calling anywhere on the planet that a Wi-Fi connection exists. WhatsApp is platform agnostic. This eliminates the need for users to share the same operating system and connects any users on any smartphone, desktop, or laptop (contrast this with Apple’s iMessage, for example, which only allows iMessages to be transmitted between Apple devices). The ease of making connections via WhatsApp has facilitated relationships and potential partnerships between people that may have previously not been possible.

Separate from its features and connectivity, two primary advantages of WhatsApp are its speed and security. WhatsApp requires less bandwidth than other messaging apps. This means messages, photos, video, and voice notes are transmitted quickly. As the old adage “time is money” remains true, this gives WhatsApp a distinct advantage. Finally, WhatsApp provides end-to-end encryption of content. This means that only the sender and recipient can see messages and content.

WhatsApp’s speed and security advantages have come into play heavily during the worldwide pandemic. The United States is the largest importer of face masks, eye protection, and medical gloves, otherwise known as Personal Protective Equipment (PPE). However, it has experienced and continues to confront severe shortages. This is due in part to the overwhelming demand shock triggered by an acute need in healthcare and panicked marketplace behavior that depleted domestic PPE inventories. The interruptions in the global supply chain caused by covid only served to amplify this problem.

When PPE does become available, buyers are in a desperate race to acquire this very limited commodity. They have contracts to fulfill and end-users that have to be served. This is where WhatsApp helps buyers maintain an edge over their competitors. WhatsApp ensures that buyers and sellers have instantaneous access to the information regarding the availability of and demand for PPE, and can connect users from around the globe. There are a plethora of WhatsApp groups devoted entirely to the buying and selling of PPE. When sellers procure PPE, they post this information on these WhatsApp group chats. It’s a first-come, first-served arena, where the first buyer to purchase PPE that becomes available receives these coveted items.

A downside to the free-flowing information regarding PPE on WhatsApp is that this time crunch, pressure, and restricted supply in the PPE marketplace makes these WhatsApp groups a perfect breeding ground for counterfeiters. Sellers will post offers to sell PPE, claiming, for example, that the items are genuine 3M products. At times, sellers are aware that the items are counterfeit, but will make the claim genuine. Other times, the seller has been duped by a supply chain partner and is unknowingly offering counterfeit items. Finally, there are outright scammers who offer genuine products, take buyers’ money, but ultimately never produce the item. Buyers are not totally unaware of these pitfalls. However, they have contracts to fulfill. They must procure PPE for their customers. This has led to certain buyers being unable to employ meticulous business practices. In other words, when PPE is offered on the WhatsApp groups, buyers will often rush to obtain the product without doing adequate due diligence as to its provenance and authenticity.

Why is this such a big deal, you ask? Some PPE is better than no PPE, right? Not so fast. There is a counterfeiting issue as well as a healthcare issue to be considered. Counterfeiters do not operate under regulations. The products they produce are often of poor quality and do not work as advertised. As they are not regulated, they may use harmful, toxic, and dangerous chemicals in their materials. The profits from counterfeit products often go to fund criminal or terrorist organizations who trade in illegal drugs, child labor, human trafficking, and more. When money is funneled to counterfeiters as opposed to genuine brands, the genuine brand loses potential billions in revenue. This lost revenue has many trickle-down effects, such as forcing companies to make layoffs, resulting in increased unemployment. While some employees may re-enter the workforce, a significant number do so at a decreased salary, which can have an obvious devastating effect on personal financial situations, and others simply do not find work.

Further, as companies harmed by counterfeiters make less profit, they pay fewer taxes. These taxes are part of the reasons we enjoy clean cities, well-funded schools, healthcare, and protections such as police and firefighters. And as companies recognize that they are being targeted by counterfeiters, they dedicate time and money to fighting this threat. Money invested into anti-counterfeiting measures and legal battles diverts funds that could otherwise be spent on research, product development, and marketing, and can also result in price increases for consumers. The end result is one that impacts the company is potential lost sales as well as the consumer. A company focused on defense against counterfeiters does not devote its resources to creating new, exciting and beneficial products for consumers.

Now consider the effects of counterfeit PPE products. We can all agree that health care providers and other front-line workers are heroes. They are the individuals disregarding the possibly deadly effects of coronavirus to do their jobs and help those in need. They are the ones in the hospitals dealing with critically ill patients, in nursing homes and long-term residential facilities helping to care for the oldest and most vulnerable among us. They are the police officers, firefighters, and paramedics, who are often the first to respond to emergencies and expose themselves to patients in need of assistance. As they are doing their jobs and sacrificing so much for the rest of us, they rely on PPE to provide them with a layer of protection against this deadly virus.

Now consider when a first responder or health care worker is unknowingly using counterfeit PPE. Counterfeit products are often of inferior quality. As such, it will not operate as expected and will not protect the wearer or others from covid as effectively. In fact, it may be made of toxic chemicals and materials that will, instead of protecting the wearer, cause it harm. This can range from the asymptomatic transmission of the disease to vulnerable individuals, to long-term health effects to death. Now more than ever, as we rely on masks, hand sanitizers, and wipes to combat covid, counterfeit PPE presents a clear and present danger to public health and safety and must be combatted vigorously.

There are several steps that buyers can take to ensure they are buying genuine products and avoid contributing to the problems of counterfeit PPE. Best practices are those research and acquisition procedures that should be utilized at all times. This includes doing research regarding offers. Is the seller a genuine authorized manufacturer or seller? Can he or she prove this legitimacy? You can reach out directly to the manufacturer to verify this information. Additionally, buyers should request documentation that supports the seller’s claim and examine it closely for authenticity. If a seller balks at providing this information, it is a distinct indication of fraud.

Business owners often rely on instincts regarding the honesty and authenticity of sellers. However, instinct alone is not a solid scheme. Buyers must remain informed and abreast of developments in productions, supply, and fraud. Buyers can subscribe to Google alerts to ensure timely reception of this data. They can compare this knowledge to the quantities and offers in WhatsApp groups. Is the seller offering an unusually large quantity that does not match what companies are stating is available? Are the terms of payment or delivery atypical and do not line up with projected prices and delivery timelines offered by the official press? Can the seller provide a resume and references that will vouch for his reliability? Even better, do business owners you know personally have had positive experiences with the seller? If a seller is unable to come up with verifiable references or has a less than stellar resume, they may likely be a scammer.

Finally, physical examination of a sampling of the product is a simple way to verify authenticity. Products that come in questionable packaging, are missing lot numbers, omit manufacturer’s information, contain misspellings, or are misaligned are very likely fakes. If the product is of poor quality, is inconsistent from one sample to another, or has atypical design elements, it can also be assumed to be counterfeit. Finally, a lack of certification or approval label on or within the packaging, as well as an abbreviated form on the product itself, is an unmistakable indicator of a counterfeit PPE product. More information is available from the National Personal Protective Technology Laboratory, which is a specialized group within the CDC that has made available on its website excellent materials and clear guidelines on how to look out for potential counterfeits.

As covid continues to rage across the planet, PPE remains a top priority for countries around the world. While the supply of PPE has somewhat improved from the earliest, darkest days of the pandemic, it continues to remain a product in high demand with limited supply. WhatsApp groups are still a fantastic way to receive information about available products and can give buyers an edge over other competitors. However, it also continues to be a platform for counterfeiters who persist in their efforts to offload fake products, which, in turn, put users, business owners, and genuine brands at risk. The smart business owner can continue to utilize WhatsApp to his advantage but must take precautions and remain vigilant in guarding against the threat of counterfeit PPE.

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Bernard Klein is the president of Almont Group Inc. A dedicated father of three, he finds time to run and box while running a successful company that helps clients’ source goods overseas.

Archives, Global Trade Daily, International Trade

Social Media Solution to Counterfeit Culture

January 8th, 2021 Bernard Klein Leave a comment

Like so many of my peers, bored and stuck at home during the pandemic, I downloaded Tiktok. As I scrolled through the (admittedly addictive) videos of comedic bits and I came across one Tiktok that gave me pause. In the video, an unseen user unboxes a “Louis Vuitton” handbag. But this handbag was not a real Louis Vuitton bag (which could range in price from hundreds to thousands of dollars) but, actually, a “dupe”. The video shows the authentic-looking shopping bag, box, ribbons, dust bag, and even fake receipts and certificates. The bag looks real, with logos, stitching, pattern, and design all intact. Following the hashtag, I discovered hundreds of other videos where users brag about and display their designer “dupes”. These items ranged from shoes to bags, accessories, jewelry, and even a water bottle!

It’s fairly easy to figure out the appeal of designer “dupes”. Millennials and Gen Z are both fully immersed in social media. They strive to create an online profile that is happy, successful, and affluent. Affluence is defined by vacations, cars, shopping, and status symbols. These status symbols vary from group to group, but we all are aware of the particular items and brands that indicate status. And we all want those items, both just to have them but also to show them off. The problem is, we can’t all afford them.

Enter the dupe. These knock-off and counterfeit items look identical to the real thing, but they are sold at a fraction of the cost. To the millennial or Gen Z buyer, it’s a great deal. They get their status symbol, show off to their friends online and in-person and maintain their image…all at a low, low cost! The best part, buyers figure, is that no one is getting hurt. That’s the part they get wrong.

Counterfeit products are often produced in factories run by organized crime. People working in those factories are subject to dismal, substandard working conditions. They work long, hard hours, and do not earn a living wage. These dangerous conditions and long hours can only be compared to sweatshops, long outlawed in the USA. Children are often employed at these sweatshops, forced to work at deadly jobs in unsafe environments. With no regulations, toxic, cancerous, and harmful chemicals are often used in the production of counterfeit goods. The proceeds of counterfeit goods are used to fund human trafficking, drug trafficking, sex trafficking, and terrorist groups. Additionally, when consumers buy counterfeit products instead of purchasing from the genuine manufacturer, governments lose the tax revenue they would obtain from sales by the genuine manufacturer. These lost tax dollars could have been used to fund programs and changes in local communities that could improve the living conditions of the same people working to manufacture counterfeits.

Millennials and Gen Z are the “woke” generation. This is the consumer who is conscientious, educated, and willing to take a stand. They want to know the sources of what they buy and the policies of the brands they support.

When these consumers discover a brand or a company that has policies and procedures that align with their values, and they throw their support behind the brand, they can take a business from a small startup in a home to an IPO. Alternatively, should they discover that a company is violating their values or is dishonest in its practices, this generation of consumers can rain down fury. It takes one person to start a conversation that can mushroom into a movement that changes companies, leadership, and society as a whole. This woke generation—that seeks out information and is willing to fight for their values—seems at odds with the counterfeit culture. Why are they willing to buy an item that supports criminal ventures and the subjugation of workers? Why are they willing to use products containing chemicals that are potentially harmful both to workers and themselves?

Most brands spend thousands of dollars protecting their products’ authenticity as they move through the supply chain. They use covert, forensic, and digital strategies to detect counterfeit goods. They use tamper-proof seals, holograms, barcodes, security tags, QR codes, and micro markers, among other tactics. They train law enforcement agents to detect and seize fake products. They employ security experts to assess and manage risks. They engage lawyers to battle counterfeiters in the justice system.

For all the efforts expended and all the money spent, the one group businesses fail to engage is the consumer. Most companies do not make educating the consumer on the dangers of buying counterfeit goods a part of their strategy. These consumers, who are otherwise hyper-aware of product characteristics, may be totally unaware that a counterfeit purchase could be completely at odds with their otherwise conscientious buying habits.

To quote Michael Bierut, “The problem contains the solution.” Just as consumers may take to social media to show off a counterfeit purchase, social media can also be harnessed in the fight against counterfeit culture. Social media reaches more users than traditional advertising. It can be impactful, thoughtful, exciting, and memorable. Companies should take a two-pronged approach. First, companies should use social media to highlight the steps they are taking to improve their brand. Posting on the company’s social media pages, tagging other influential community members and supporters, and reposting messages that align with the company’s values are all excellent ways to position your brand as one that millennials and Gen Z can fully support.

The second tactic companies can employ is to utilize social media to educate consumers about the impact their counterfeit purchases can have on society. Companies can inform social media users of the effects their buys have and how they violate their conscientious purchasing habits by highlighting specific cases where human rights were violated, children exploited, toxins used, and companies or criminal organizations that are funded by counterfeit monies, among other harms.

The counterfeit culture, so casually and extensively displayed and flaunted on social media, can be countered. The consumer today is one that is willing to change. They will change their buying habits to support a brand that they connect with, is authentic, and has procedures and policies that line up with their own values. They will mobilize their friends and family to discourage practices that are distasteful, harmful, and detrimental to society. By harnessing the power of social media to connect with their consumer, companies can tap into that power, force, and energy to combat counterfeiters everywhere.

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Bernard Klein is the president of Almont Group Inc. A dedicated father of three, he finds time to run and box while running a successful company that helps clients’ source goods overseas.

How to Utilize AI to Combat Counterfeiting

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