One of the most common questions I’m asked when teaching is, “How do I stop people from copying my product?” The fear of getting copied is so great, that I see many people not taking steps to make their product in the first place, because they’re so convinced it will be knocked off!
For better or worse, imitation is a fact of life, and it’s probably not going away anytime soon. Yes, legal measures such as copyrights, trademarks and patents will help prevent blatant replication and allow you to go after anyone causing harm on your business, but if you are a new entrepreneur with limited resources, it can be hard to reach all corners of the globe. Even if you do have the staff and bankroll to investigate and prosecute knock-offs wherever they pop up, it still doesn’t mean that you’ll prevent all copying. Do you think the big handbag and fashion brands aren’t actively pursuing the people that imitate their goods? They are!! But as the Director of Production at a multinational apparel company once told me, trying to eliminate illegal knock-offs is like a game of Whack a Mole…the second you successfully bash one, another appears in it’s place.
So what to do? While copying is a reality, the following three approaches can help you to both minimize imitation and maximize your popularity with customers over any other competing brand.
Tighten Material Controls
You can’t monitor the whole world, but you can monitor your suppliers. And when it comes to imitation, they are the ones that you want to be most concerned with. An imitator making a cheap knock-off product is one thing. A supplier who funnels your actual goods ‘out the back door,’ and then sells them on the black market is another problem entirely.
To prevent this, it’s important to keep tight control over the actual quantity produced compared to the final quantity shipped. If 5,000 units were produced and only 4,500 shipped, you know you have a problem! Monitoring this is more difficult to do if your assembly supplier is the one ordering the raw material, as you can’t be certain that they aren’t ordering extra for a ‘back door lot.’ The most secure way to produce is to source and order your own materials – and ship just enough for the production quantity you plan to produce. You can even request vendors to blind ship the materials, so that the final supplier does not know their origin.
Break-Up Production
For those who need to be very discreet when it comes to producing their product (high-tech or disruptive items in particular), breaking up production so that no one supplier has enough information to produce your goods is a great way to protect intellectual property.
Say your product has three main components – A, B, and C. You would intentionally produce each of these components with separate suppliers, and then ship A, B and C to a fourth party (D) to assemble. D doesn’t have specs or instructions to make any of the individual parts, and the suppliers making A, B, and C don’t even know that the other exists!
You can also take it one step further by packaging or labeling your goods at a separate location (E). While the E supplier could potentially siphon off finished product, you would have an exact count of the quantity shipped to them and could ensure that this same quantity was shipped out.
Develop a Strong Brand
The best and most lasting way to prevent copying and rise above the competition is to develop a rock solid brand identity. This will encourage customers to seek out the ‘real thing’ instead of accepting a substitute. Your customer service strategy is a big part of this, especially for those with products that require education and maintenance.
People can easily copy a physical item or function, but they will have a much harder time replicating an entire brand identity. Building a rich, strong brand is the best long-term strategy for combating imitation and knock-offs in the marketplace.
