Channel Beware: Top Five Ways To Spot Fakes

6:00 PM EDT Fri. Aug. 17, 2007
From the August 20, 2007 issue of CRN

Counterfeit hardware and software can be tough to spot. The following red flags could save VARs a whole lot of trouble and expense.

> 1. "PAY NOW, PRODUCTS LATER"
Black marketers are in it for money, so standard business practices of payment upon delivery often don't apply. "These products come filtering into the channel from brokers, not directly from someone out in the Far East," said Paul Busch, director of Ingram Micro Outlet for distribution of refurbished goods. The brokers have to pay the suppliers to get the products, so they typically require customers pay up front.

> 2. DEEP DISCOUNTS
Price often determines who wins channel opportunities—particularly when commodity goods are involved. Solution providers have to avoid the urge to take advantage of the deep discounts offered through brokers. "When a price is too good to be true, there is probably a reason," said Michael Beare, channel director of Microsoft's Genuine Software Initiative.

> 3. SPOTTY HISTORY
Solution providers need to take the time to dig into the background of companies they source products from. "I need to know who I'm dealing with and if they're reputable," said Frank Kobuszewski, vice president of the Technology Solutions Group at CXtec. Dun & Bradstreet is a good place to start.

> 4. NO PAPER TRAIL
Just as solution providers have to check the background of suppliers, they also need to be able to track the origin of products. Ask for documents that detail where the products were acquired and certify their authenticity. And looks alone don't cut it. "This stuff looks like it fell off the back of the truck," said Ken Presti of Presti Research & Consulting. "They go to great pains to make it look genuine."

> 5. SOMETHING'S FISHY
Solution providers should tap into their own experience with, and exposure to, products to determine whether everything appears on the up and up. "From a packaging standpoint, counterfeiters still have a ways to go," Beare said. "Missing documents, grammatical errors in manuals, serial number stickers stuck on the outside, and basically products that don't look right. [VARs] should look for those."

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