Although we hear a lot about the problems of infringement in music publishing, I think problems centered on counterfeit music products are equally dangerous, both now and for our future. Although they’re the bane of most manufacturers, dealers seem to be less aware and, consequently, less concerned about the matter. Consumers are often in denial about it.
Knockoffs—shoddy, obvious fakes that sport crudely misleading brand logos like “Fendler” guitars or “Selma” saxophones—appear online, on Craigslist and at flea markets nationwide, boasting prices that are low enough to make anyone except newbies suspicious. Worse, though, are clone products that aim to deceive consumers into believing that they’ve bought the real thing at a bargain price. Every prominent brand in the industry shares this headache, along with its attendant nightmares of constant vigilance, ineffective litigation, and lost reputation and revenue.
It gets worse, though. Just ask companies like D’Addario, Ernie Ball and Vandoren. Anything can, and will, be counterfeited: reeds, strings, sticks, stomp boxes… the list is endless. At first, most people think, “Can it really be worth it to sell fake reeds?” To a domestic lowlife, perhaps not. However, in China, a box of poorly made reeds sells for around $2 (U.S.). Assuming that they make a profit at home, how much more lucrative is it to re-label them “Vandoren” and sell them for $18 against a legit $25? Consumers believe the real dealers are gouging them, and the fakes generate a gratifying nine times the usual return.
The doubly insidious part is that, unlike a look-alike Kate Spade bag, the counterfeit products immediately underperform or fail completely. (The fake Kate Spade might last only a couple of months, of course.) Consumers, believing they’ve bought the real thing, blame the manufacturer for poor QC, or even outright fraud.
And that’s not an exaggeration. Scroll through comments about “fake reeds” on various woodwind forums and you’ll see outright denial that such things exist, right alongside reasonable, informed education on the topic. I’ve read comments that range from completely dissing a brand’s design and quality to accusing reed makers of deliberately selling off seconds to unwitting consumers.
I know young consumers who knowingly buy knockoff fashions. (“Well, I can’t afford a real Kate Spade,” they reason). Just as they feel it’s OK to download music they “can’t afford” to buy, they have no qualms about buying look-alikes. However, they’re also quick to assign blame when they think a big ol’ corporation is ripping them off. It’s funny that, far less frequently, they think, “I bought unwisely.”
It’s not just the manufacturer’s problem, either. Dealers compete every day against street prices set by fake products. It hurts the product’s reputation, and it fosters the perception that the dealer is in the wrong, overcharging aggressively for items worth far less.
These are not “Dark Web” products—they’re everywhere. Take the example, reported by CNBC’s Ari Levy, of a product called the Forearm Forklift. Profiled on “Good Morning America,” sales, at their peak, were more than $4 million. With success, however, came the knockoffs…mostly on Amazon.
Wait…it has to be legit if it’s on Amazon, right? Oh hell no! Owner Mark Lopreiato clocked more than 100 different knockoffs on Amazon alone.
CNBC reported it this way: “Once a thriving product for movers and contractors available at a dozen big-box retailers, including Walmart, Target and AutoZone, Forearm Forklift has been ravaged over the past half-decade by counterfeiters, mostly selling on Amazon. Scores of merchants have copied the patented product, using its name, images and labels, and undercutting the real Forearm Forklift on price.”
Lopreiato says sales are down 30 percent. But wait…it gets worse. Amazon first came to him and told him he should lower his price, because the product was available cheaper at a number of Amazon storefronts. (We’re talking about a $25 item here, folks; it’s not some big-ticket, high-tech product.) When informed that the others were selling counterfeit products, Amazon dumped the policing into his lap, and he’s been playing whack-a-mole ever since.
That example should have our industry up in arms. ALL our products are being knocked off, and we’re hit three ways: manufacturers lose sales and reputation; dealers lose customers in droves; and consumers lose confidence in, and value from, almost everything we sell.
Nike, Hasbro and Cuisinart are big enough to have gotten some policing concessions from Amazon. However, most companies are left to fend for themselves, pursuing an exhausting and expensive battle.
So, what can we do? I like the approach that Birkenstock is taking. As of 2017, sales of its products will no longer be allowed on Amazon. The company will still have policing to do, but it can make the case that any listing for its products on the retail giant’s marketplace is unauthorized. Still better is Harley-Davidson’s tactic: It firmly states that any product not purchased direct from the company on its Web site, or through an authorized dealer/retailer, is a fake. Period.
That doesn’t stop the knockoffs, but it does make them easier to spot, and it sends a message to consumers: There are fakes out there, and there are steps to avoid them.
Could Amazon stop the counterfeits from showing up? I think it’s likely. How? Just aggressively vet merchants, including immediately dropping the “multi-industry” foreign superstores that sell everything from iPhone chargers, to guitars, to fashions. But that would take a chunk out of Amazon’s sales, and stockholders would be unhappy. Perhaps, once it gets down to disrupting the logistics and grocery industries (as already reported), those revenues, plus cloud services and Prime memberships, will allow Amazon to do the right thing.
Until then, I think we’d be better off shuttering Amazon (and, frankly, eBay) activity. When Lopreiato was featured on “Good Morning America,” the expected sales bump went to the knockoffs. He reported only a trickle of interest after millions of exposures nationwide.
How much are we losing by allowing sales on the online behemoths? What is it really doing to our brands, our companies and the market of music makers, especially future ones? Unless we reach a time when fraud becomes more than a shrug of Amazon’s shoulders, I think, more than anything, it’s hurting our stores and our industry.