Retailers and consumers who think they’re scoring unbelievable online deals on archery products are probably right about one thing: The deal isn’t believable. In fact, if they’re buying counterfeit products, they could even be complicit in criminal retailing.
Counterfeiters have grown increasingly bold the past few years as they collect or photograph samples of well-known sights, broadheads, arrow rests and other accessories. They reverse-engineer and manufacture knockoffs for “factory-direct” sales to retailers and consumers at prices far lower than name-brand originals.
They often sell their bogus products through online retailing powerhouses like eBay, Amazon and Alibaba, as well as through direct email or traditional mail solicitations using fliers and brochures. After the products arrive in the United States, they’re often delivered to homes and businesses by the U.S. Postal Service and identified as gifts. Therefore, counterfeiters pay no federal excise taxes on their products, which gives them further advantages over legitimate manufacturers while depriving revenues for state and federal wildlife management.
Where are the counterfeiters from? Some estimates say 70 percent of counterfeit products originate in China. Further, 87 percent of the total value lost to counterfeiting originates in India, China, Hong Kong, Taiwan and Korea.
How large is the problem and how much is it costing archery manufacturers and retailers? That’s often difficult to say — until a company tries stopping the thieves. Perhaps the most easily calculated costs are for services paid to watchdogs that monitor competitors and online retailers 24/7 to enforce compliance with trademarks, intellectual property, minimum-advertised-price guidelines and copyrights on product images and printed materials. Patents can be difficult to enforce unless a manufacturer can be identified and government regulators in its home country take action.
“Getting a handle on counterfeiters is like trying to squeeze a handful of water,” said Dave Parker, director of sales and strategy for Kinsey’s. “How do you get at counterfeiters, stop them and prevent them from doing it again? And how do you not spend more than 10 times the amount of the problem itself when you try protecting your products? No one knows how many counterfeit items come into the country, and you don’t always know how they get here.
“So, where do you start? It’s frustrating,” Parker continued. “Just look at how many e-commerce websites are out there and how many are selling counterfeit products, knowingly or unknowingly. I don’t know if anyone knows what counterfeiting actually costs their company, let alone its overall impact on the industry.”
Many Companies Victimized
Among the manufacturers hit recently by counterfeiters are G5, Rage, Muzzy, Slick Trick, Trophy Ridge, New Archery Products and Flying Arrow Archery, but this list is by no means complete. Some manufacturers issue press releases and post warnings on their websites to alert retailers and consumers about the problem, but identifying counterfeits isn’t always easy for untrained eyes. Tip-offs include generic or multi-colored packages that don’t look like the manufacturers’ actual packaging. Or the products themselves come in colors never seen in the originals.
Matt Grace, president of G5, said when his company dealt with counterfeiters two to three years ago, phony packaging on the knockoff broadheads nearly exactly copied G5’s, except for typographical and other minor errors. “There’s no doubt they were trying to duplicate our broadheads,” Grace said. “They try to sell their duplicates as original products.”
In other cases, however, counterfeits are so sophisticated that manufacturers must conduct metallurgy and performance tests to separate fact from fiction. Unfortunately, educating retailers and consumers about fraud and how to detect it can educate counterfeiters more than customers.
“We don’t list what to look for in our ‘buyer-beware’ warnings, because as soon as you do, the counterfeiters change things to pass that inspection,” said Chris James, national sales manager for FeraDyne, owner of Rage, Muzzy, Tru-Fire and Nockturnal. “We post warnings on our website and Internet forums, and we tell people on the phone how to identify the problems. But it’s a lot of work.
“Some common giveaways are burn marks, rough cuts and O-ring problems,” James continued. “We also ask about colors. If it’s bright yellow, it’s not one of ours. Look at the top of the card. We put a sticker there that says Rage. Does it have an anti-theft barcode? Little things help you tell. In most cases, manufacturers can quickly determine the counterfeiters’ shortcuts.”
Infamous “Identity Theft”
Perhaps the archery industry’s most infamous counterfeiting case targeted Trophy Taker arrow rests and Sims Vibration Laboratory’s LimbSavers vibration dampeners in 2005-2006.
Jerod Lile, general manager of Trophy Taker, said he first learned of a possible problem in a phone call from Kinsey’s. Distributors such as Kinsey’s, Pape’s and others — as well as large retail outlets — were contacted by an inventory liquidator who offered Trophy Taker rests at a huge discount. In addition, the quantities offered were larger than any one operation could have realistically hoped to sell.
“Kinsey’s sent me some of the product to verify it was ours, and we looked at it,” Lile said. “We thought it was ours. It was an exact replica, right down to the clamshell, tooling and die cast for the launchers. Then I got three or four more calls from other distributors, and I asked them to send their product. This time we looked much more closely and found slight differences in the clamshell, the fasteners and the rope. We developed a worksheet showing the little differences and spread the word.”
Alan Lotton, marketing manager at Sims Vibration Laboratory, said he, too, received worried phone calls from distributors asking about offers from the same liquidator to sell large quantities of LimbSaver products at unprecedented discounts. Lotton said Sims identified the suspect products as counterfeits, but it wasn’t easy.
“They did a hell of a job knocking off our product line,” Lotton said. “A layman wouldn’t have had a clue. It didn’t work nearly as well as a true LimbSaver, but it provided some benefit. The disc that adheres to the bow limbs was the biggest problem. It would crack within a month of installation, but their packaging copied ours to the T. You needed a magnifying lens on the barcode to see it was counterfeit. The standard dealer, buyer or consumer wouldn’t have had a clue. They were very good at what they did.”
That counterfeit job was so large that Lile and Lotton assume some of those phony products are still floating around. Although several sources for this article believe the Sims/Trophy Taker case was an inside-the-industry job, no one was ever charged with a crime. Lile believes Trophy Taker lost hundreds of thousands of dollars on the scam, based on the number of individual units bought and sold by major distributors.
Lotton, meanwhile, thinks Sims lost at least $250,000, but the potential risk was at least double that. He credits Kinsey’s, Pape’s and other industry partners for raising flags and helping shut down the scheme.
“It was a long nightmare,” Lotton said. “We learned a lot. For one thing, you can’t expect much help from the FBI or Customs. When the FBI investigated, it just seemed like boiler-plate questions, and we were just one of many counterfeiting victims. The reality is, the larger you are and the more products and product lines you make, the harder it is to police the marketplace for counterfeits. It’s enormously time-consuming to even try.”
Parker estimates Kinsey’s lost “tens of thousands” of dollars in bogus sales before realizing the scam. “If they hadn’t gotten greedy and called back to sell us even more, we might not have suspected anything,” he said. “It left a mark on us. But 10 to 12 years ago, we didn’t expect counterfeiting the way we do now. It’s grown so common the past few years that we’re always watching now.”
Malcolm Snyder, vice president and director of sales and marketing for Pape’s distributors, estimates the company lost about $30,000 in the Sims/Trophy Taker case, but hasn’t had any known counterfeiting problems since.
“Counterfeiters are bypassing distributors now and going straight to retailers and consumers with their sales pitch,” Snyder said. “They know we’re onto them, and they don’t need distributors anymore, thanks to the Internet and e-commerce. Now they stick to direct sales. It’s easier for them to control the situation.”
Three Factors Spark Counterfeiting
Jay McAninch, president/CEO of the Archery Trade Association, also cites the Internet and e-commerce for counterfeiting’s proliferation. “It’s basically those two factors and the growth of overseas manufacturers with access to our markets,” McAninch said. “The problem first surfaced in the 1990s, but it didn’t take off until the Internet gave counterfeiters direct access to online shoppers.”
McAninch said counterfeiting is a worldwide problem affecting not only archery, but also drugs, cosmetics, luggage, watches, food products and other items. “We aren’t alone in this, which helps in some ways because the more industries hit by counterfeiters, the more it increases overall awareness,” McAninch said. “But in archery, our other big concern is safety. When you have people drawing counterfeit bows to shoot counterfeit arrows and broadheads from treestands made from inferior metals, something is bound to give at the worst possible time.”
Even so, unless lots of people are dying or stealing directly from their countrymen, governments apparently feel little urgency to crack down hard on present-day counterfeiters.
“There’s growing recognition that it’s a problem, but it’s almost viewed as a victimless crime,” McAninch said. “It’s extremely difficult to show how much it’s costing companies individually. Some estimates by the Chamber of Commerce say counterfeiting costs legitimate companies between 5 percent and 7 percent on the low end, and 10 percent on the high end in the global market. I saw one estimate that counterfeiters already cost legitimate companies over $600 billion in losses, and they expect the losses to exceed a trillion by 2015. In sporting goods alone, losses are estimated at $6.5 billion.”
McAninch echoed Lotton’s concern that federal agencies seem incapable or unable to pursue counterfeiters. “You get some idea how the U.S. government views counterfeiting when more than $25 billion in goods were imported by the United States in 2010, but only $155 million in goods were seized by Customs inspectors,” McAninch said. “We need trade policies that protect manufacturers from unscrupulous manufacturers overseas.”
Protecting Their Investments
As a result, some manufacturers believe they have little choice but to monitor online counterfeiting efforts and pursue counterfeiters themselves. Jack Bowman, president of Bear Archery and Trophy Ridge, said it’s company policy to enforce its trademarks and intellectual property rights.
“We take those responsibilities very seriously,” he said. “When you develop brands, trademarks and the marketing that builds their profiles, your financial investment goes into the millions very quickly. It’s very discouraging to see people take advantage of all your work and investments, and capitalize off of it by selling counterfeits. We’ve seen significant amounts of counterfeit Whisker Biscuits out there. That’s why we’ve filed suit with the International Trade Commission to position ourselves to take very strong actions to enforce our patent and trademark rights.”
Bear/Trophy Ridge works with the law firm of Woodard, Emhardt, Moriarty, McNett & Henry LLP in Indianapolis to protect itself against counterfeiters. Charles J. Meyer, a partner with that firm, said obtaining an exclusion order from the ITC will prohibit Whisker Biscuit imitations from being imported.
The firm also prefers to go after manufacturers of counterfeit goods, but that’s difficult when the manufacturer is based outside the United States. In those cases, the firm considers going after U.S.-based infringers, whether they’re retailers, distributors or even consumers, the end-users.
Bowman said his company can’t afford to let counterfeiters poach its deep investment of time, talent and resources in products like the Whisker Biscuit.
“When someone manufactures, sells or buys a product that infringes on our patents, trademarks and investments, they’re infringers,” Bowman said. “That’s a real problem, and ignorance of the law is no defense. Counterfeiters also don’t have to worry about warranty support, service support or anything else that Bear Archery provides our customers. If a consumer is injured by an inferior-quality product, the counterfeiter usually disappears. That leaves the user and/or retailer on the hook, with no responsible company to provide relief.”
Meyer said it might sound harsh to go after individual retailers or consumers, but he notes a precedent: The music industry did the same thing 15 years ago when suing Napster and individuals who illegally shared and downloaded music without compensating music publishers and the artists who created the music.
“No manufacturer wants to sue its customers,” Meyer said, “but sometimes it’s the only way to make people realize what they’re doing is illegal and harmful. Ultimately, a strong response protects consumers against inferior products. If you don’t stop counterfeiters, you destroy the incentive for legitimate manufacturers to build and develop new products. Business needs economic motivations to keep generating true innovations.
“People might ask, ‘What’s the big deal?’ but that’s a short-sighted question. It’s a big deal to provide products that are safe, innovative and supportable. You get none of those qualities in counterfeit products.”
FeraDyne also aggressively protects its interests, James said, which is why it works with Channel IQ, a company that provides online retail intelligence for manufacturers, distributors and retailers. Among Channel IQ’s primary missions is protecting clients’ brands and intellectual property by monitoring e-commerce sites for MAP, trademark and pricing policy compliance.
James said the Rage Chisel Tip broadhead was being counterfeited earlier this year. Although the bogus heads resembled the real thing, their tips often fell out, the blades were stamped and they didn’t hook correctly into the head. Previous experience with the counterfeiter taught James it was a full-time job to keep the impostor off eBay and Amazon.
“Now, anytime someone uses one of our photos on a site to advertise one of their counterfeit products, Channel IQ forces them to take it down,” James said. “They took down 400 listings of our products so far. It’s a never-ending effort.”
FeraDyne receives a weekly report from Channel IQ. “Every time [the counterfeiter] puts up a new listing, we’re able to take it down. Overseas websites are somewhat easier to monitor, but it’s harder on eBay and Amazon because there’s so many legitimate companies on those sites. That’s where MAP comes into play. If a dealer is selling under MAP on Amazon and eBay, we push to get them removed. That’s a red flag.”
James said FeraDyne’s fight against counterfeiters with Channel IQ will cost about $25,000 to $30,000 this year, but it’s tough to estimate sales losses caused by these identity thieves.
“We’ve gotten product from buyers who sent stuff to us because our products are guaranteed,” James said. “We looked at it and sent it back because it’s not ours. They can get very upset. But they bought five packs of these counterfeit heads off eBay, and now they’ve lost money on an as-is sale. It’s a frustration for customers. We have no idea how many customers we’ve lost because they blame us for the failures.
“We also know of cases where a guy sold 500 packs of counterfeits. That’s thousands of packs over the course of a year and tens of thousands of customers who will have bad experiences. We know some of them will blame us, so it’s in their best interest and ours to make it hard for people to sell counterfeits online.”
Futile Or Fruitful?
Not all manufacturers, however, are certain it helps to police the Internet and pursue counterfeiters with lawyers.
“We’ve tried to stop some of this, but it’s very costly,” said Chris Kozlik, director of engineering and new product development for New Archery Products. “And when you step back and get over the anger portion of it, we realize it has little impact on our business. We’ve had only one case where a dealer bought lots of counterfeited broadheads. After we talked with him, he stopped selling them. Although it’s upsetting to see our products being counterfeited, I don’t see a large impact on our business or our future.
“Some of it’s just a practical matter. A lot of online sites have 20- to 30-pack minimums on broadheads. Most consumers do not buy broadheads in those quantities. I have some level of small concern that a dealer would go out, buy and resell, but like I said, it’s only happened once that we know of.”
Kozlik said the situation might be different for other manufacturers, but he thinks counterfeiting will always exist. He also can’t find compelling evidence that “fighting the battle” is money well spent.
“If you’re staring down the barrel of spending $30,000 to combat this in legal arenas, I just think it’s probably more cost-effective to spend it on advertising, new product development or some other effort,” Kozlik said. “If you can quantify the loss and show it’s significant, maybe it’s the time to get mad and do something about it. Even then, you might spend years combating the problem and only put the cork into one unscrupulous source or vendor for all your efforts.”
Perhaps one way to curb the problem is a broad-based public service effort to help dealers and consumers realize counterfeiting is bad business for everyone who owns and shoots bows and arrows.
“When consumers look at a product’s label and make buying decisions based on reputations and expectations tied to that brand, they better be buying from a reputable dealer or retailer,” McAninch said. “The archery industry has a pipeline, a chain of control, that delivers quality products to consumers. If consumers expect a label to stand for something, their purchases have to come through that pipeline.
“If they go outside those channels and buy online from a manufacturer that’s piggy-backing off the reputations of legitimate companies, it’s ‘buyer beware.’ Who do they hold accountable when the product malfunctions? Who’s standing behind it? Good luck if it’s an Asian manufacturer that won’t reveal its address or officers. You’ll have a hard time ever proving who made the product.”
Studying The Impact
McAninch also hopes to work with manufacturers to get a better estimate of counterfeiting’s impact on the archery industry and create joint efforts to attack problems.
“In the coming year it’s time for us to form a larger group of manufacturers into a working group to spread the costs around,” he said. “The ATA needs to spend some money working with U.S. trade officials to look at several cases to better understand how counterfeiters affect the industry, and work together to pursue solutions.
“The more companies reporting and sharing information on this problem, the better we’ll understand its full impact on the business. The better we document and total those impacts, the more likely we’ll get the attention of Congress and trade officials to address the losses our companies suffer.”
Counterfeiters Are Copiers, Not Creators
Counterfeiters miss few chances to steal ideas and designs when seeking products to copy, manufacture and sell to unsuspecting — or opportunistic — customers. They’re masters at using today’s technology to create illusions of low-cost high performance.
It can start by simply photographing prototypes and new models at a trade show. As long as the imitation built from that photo resembles the real thing, they can probably offer a cheap enough price to sell it.
Chris James, national sales manager for FeraDyne — manufacturer of Rage broadheads, Muzzy broadheads, Tru-Fire and Nockturnal — said it’s impossible not to be suspicious whenever someone photographs products displayed in the company’s trade show booth. They’ve also had people go on FeraDyne’s website to order one pack of every broadhead listed.
“With today’s 3-D scanners and some reverse engineering, they can just take it apart and reproduce a reasonable facsimile,” he said. “That’s the kind of age we’re in.”
Chris Kozlik, director of engineering and new product development for New Archery Products, said a common accusation is that unscrupulous contractors in China make legitimate products for American companies in one part of their building while simultaneously making low-cost imitations in another.
“It’s possible you could pick an overseas vendor who’d do that, but most counterfeits come from factories that tool up specifically to knock you off,” Kozlik said. “We work with a sourcing expert overseas, Sertus Global Sourcing Solutions, to vet factories not just for quality control, but for credit and credibility as business partners. We have a ‘no-fly list’ for particular sources that can’t be trusted.”
Jack Bowman, president of Bear Archery and Trophy Ridge, said no vendor working with his company has any connection to counterfeiters that have plagued his business. “The fact is, we’re not building our products in China,” he said. “They’re not making product for us. They’re not authorized to make a single piece for us.
“With our Whisker Biscuit, 90 percent of it’s built here in the U.S. Every critical part is made here and assembled here. We buy some components, but nothing of magnitude. The [counterfeiters] simply copied us and started selling it. We weren’t asking for this to happen.”
Counterfeiters Proposition Dealers
Bill Henneman, owner of Wildcat Archery and Hunting Supply in Pooler, Georgia, and Peter Gussie, owner of Midwest Cimmarron Archery in Richmond, Illinois, know firsthand how some archery counterfeiters sell their wares.
They’ve received price lists and matching photos of suspicious inventory via email and traditional mail. The products look amazingly like the name-brand broadheads, rests, sights and releases Henneman and Gussie already stock.
“We were getting emails from one of them pretty regularly,” Henneman said. “They give this spiel that they’re based in China, they build these rests or broadheads for [specific company], and they can get me that product for $40 instead of $80. I knew it was bogus. I sent them an email and said I’m not interested.
“That didn’t stop them. At the beginning of this year, they mailed me a six-page, full-color brochure of rests, sights and broadheads. They claim all their products come down the same assembly line that makes the name-brand products. I just throw that stuff away. I don’t want products coming out their back door and into mine.
“I actually had a customer come in with one of their arrow rests. It looked exactly like [the real thing] and worked the same. It’s a $60 rest and he said he got it for $29. I recognized the name from the brochure and told him it’s a counterfeit. This is something that hurts all of us.”
Gussie agrees. “One of the biggest offenders I know is [a company] out of China that sells its counterfeit products under several names online,” he said. “They push a lot of products through eBay, Amazon and other online sites. They’ve apparently done manufacturing for companies in our industry where they learned to make the product and then started knocking it off. They’ve also knocked off products after companies sent samples for quotes.
“They contact us by mail and email regularly, trying to sell their products. They send a catalog that shows some of the blatant copies. We choose not to do business with them.”