Putting the Brakes on Gray Market and Counterfeit Goods

Completely stopping the flow of fake or illegally obtained high-tech products may not be possible. But Cisco’s Ram Manchi, through his work at AGMA, is doing what he can to slow it down.

a little easier to discuss some of the issues we’re trying to tackle, which are slightly different from the issues experienced by the pharma or automotive industries. AGMA has also reached out to some of the other trade associations to understand more about their efforts, and some of the best practices of each association are applicable across industries.

CSO: What are some best practices that any company can do? What are the first three things you’d recommend?

Manchi: While gray market and counterfeit products could possibly be an issue that can never be eliminated entirely, companies and the industry can significantly contain the magnitude through constant risk mitigation efforts. Although these efforts may require some investment and cost, ignoring or underestimating the issue could certainly compound and expand the problem, eventually making it unmanageable.

Companies could start off with an initial assessment of how the problem is impacting them, and if so, how and to what extent. To achieve this, it significantly helps to have an understanding of their "product and market" profile. This includes market potential for the product, competition, specific geographic needs, distribution models and serviceability. Analyze any abnormalities (spikes in demand, sales, discounts, service claims, product failure rates) to find any questionable trends. Also ensure that the terms and conditions on channel sales contracts are well defined, and if necessary, enhance the contractual language. Monitor broker and product trading websites to monitor price inconsistencies as well.

CSO: What is the biggest challenge?

Manchi: Education. There is a lack of awareness, and sometimes that means companies see the problem as smaller than it actually is. Most companies operate in a trust model and believe their channels and customers value their product and operate ethically. Convincing management of the criticality of the issue and how to invest in addressing the issue is one of the biggest challenges for our members.

Associate Staff Writer Katherine Walsh can be reached at kwalsh@cxo.com.