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How the After-Market & Counterfeiting Are Linked

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Ariella
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Supply Network Guru
Re: The after-market and counterfeiting
Ariella   4/23/2012 6:38:18 PM
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Here's a visual representation of the range of Chinese counterfeiting http://www.techi.com/2012/04/chinese-tech-counterfeiting-visualized/

Barbara Jorgensen
User Rank
Blogger
The after-market and counterfeiting
Barbara Jorgensen   4/9/2012 1:50:20 PM
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I agree there are many aspects to this that bear some deeper examination. I can answer one of the questions: who pays? If a brand owner wants you to repair, collect, dispose of something, they pay you (in this case, the distributor) to do so. I am told, BTW, that the margins on this business are better than typical distribution margins. Why? In this case, the distributor does not own any of this equipment. In components, distributors have to buy inventory and resell it. In the after-market, they don't. Granted, collecting, refurbishing and extending credit require people, facilities and transactions, but compared with inventory, the cost is lower.

As to who is minding the store...again, the brand owner should, but then you have the government mandates as well. Maybe the EPA at some point will get involved...

 

bolaji.ojo
User Rank
Blogger
Re: Who will monitor this?
bolaji.ojo   4/7/2012 3:42:32 PM
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I agree distributors may be the obvious choice but this topic is like the many layers of an onion. As I nodded in agreement to your answer I had another question in my mind. Who will compensate distributors for this task? They are in business also to make a profit and in years past OEMs and even suppliers have been reluctant to pay them for value-added services.

Although my questions may be wrapped up in other questions, this is such an important subject for the industry that I believe the more we poke around this topic of counterfeiting, the clearer it becomes that no single party can take this burden upon itself. The government is concerned but its usual strategy is legislative but the real solution lies within the industry itself if they can speak with one voice. To do this, however, they have to see this as a common problem. I don't believe they do.

Barbara Jorgensen
User Rank
Blogger
Re: Who will monitor this?
Barbara Jorgensen   4/6/2012 8:52:49 AM
NO RATINGS

Good question! I think it is in the best interest of the company that is contracting the service--chip/component makers--to audit their collection/disposal partner to make sure the components are destroyed/recycled. On the board side, that is going to be difficult. Any number of organizations collect old electronics (a local church does it here) and no one has any idea where the stuff goes. I think ultimately, if brand owners are going to declare themselves green or compliant, they will need to track both the sales and disposal of their products. Theoretically, a serial number of ID tag should accomplish this. In reality, those thigns are probably pretty easy to take off or fake.

It seems to me that distributors--which handle components and now, products--from cradle to grave would be a good choice to oversee this process. They do it anyway--distributors track where the parts go. I think there is still a lot to be figured out, but since it is in their best interest to do the job correctly, they'd be the logical choice.

 

bolaji.ojo
User Rank
Blogger
Who will monitor this?
bolaji.ojo   4/6/2012 8:40:30 AM
NO RATINGS

Barbara, You laid out the case for the connection between counterfeiting and the after-market very well. The question that follows in my mind is this: who will police this entire system? All of the parties involved, the manufacturers of original parts, distributors, after-market parts recovery and redistributors and the counterfeiters are all in "business." To what extent can the industry police itself and who leads?



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