Guido De Terenza here to complete my guest stint on this blog.  And, again, here to thank those manufacturers out there who not only aren't stopping counterfeiting, but they're paying me to counterfeit their products. Let's call this blog Counterfeit Math 101 and find out how many times the cost of the product you're losing.

First off, a big hand to those of you out there who can answer this question: Is counterfeiting and the loss of present and future sales ever factored into the justification to offshore jobs?

The answer: no.

From software, to integrated circuits, to HP inkjet cartridges, to your product. If you make money off it, it's being counterfeited. And sometimes, you're asking, even paying, the counterfeiters. Ever heard of OEM? ODM? Original Equipment Manufacturer? Original Design Manufacturer? That's when you outsource your product manufacturing or even its design to some company, preferably thousands of miles away from the employees you're using to train them--all to save on cost and stay competitive.

Maybe this works sometimes, but in my experience in organized crime, it is simply a braindead, next-2-quarters strategy. Guess what those OEM/ODM folks do? They work assiduously for you, 9 to 5, producing your products. Then they work a second and third shift, still producing the exact same products, but putting them into channels you had no idea (or intention) of ever going into...don't believe me? Why don't you scour the internet, and find out who's selling your product. Now try to trace them back to your sales force/sales channels.  Good luck.

If you want to manufacture overseas, hey, be my guest. I like the flat earth. It helps me globalize my money laundering, I mean, business operations. But if I were a brand owner, I'd make sure those overseas folks were vested in my company. If they're not, they're bound to spoof your company.

Loss of profits due to counterfeiting? Let me count the ways...

1. Loss of sale (counterfeit replaces your legitimate brand sale)

2. Loss of retailer recommendation (retailer won't recommend your product because she knows you'll find a cheaper price somewhere else, and so direct you to your [less counterfeited] competitor)

3. Loss of customer referral (customer either gets an inferior product, or gets a legitimate product through a non-legitimate channel, and so can't register the product, get product support, etc.)

4. Return (customer returns the counterfeit product)

5. Loss of channel (you can't enter channels that already think they're selling your product)

6. Loss of future sales to the customer (customer will move to a product they're more confident is legit)

7. Loss of brand value through perceived inferior quality (word gets out...ever heard of a blog?)

You can see that for inferior counterfeits, you pay several times over. But the same is true for high quality counterfeits. You lose so many ways. So, if counterfeiting really is 7-10% of world trade, your cost could be 30-40% of your margin due to all these factors above.

Would you turn down the opportunity to increase your margin by a third? Apparently so, and that is why I am in business.

Well, I'd like to say more, but I've got a counterfeiting business to run. So, I'll leave this blog back in Steve's hands. Till then, thanks for paying me to steal your brand.

--Guido