Authenticating Items, Here We Go Again

Regarding my previous post about Diesel jeans, I read the forum I link to and saw a quote there which I want to address here.

When you, yes you, want to know how to authenticate merchandise the most common advice you get is to take your product to the store (as in the company store, taking a Louis Vuitton to a Louis Vuitton store or even a Neiman Marcus) to have it authenticated.

I think it is a gross misconception that store sales staff are generally well versed in authenticating items. Even then, an exclusive retail store has a vested interest in refusing to authenticate items that were purchased outside of their authorized distribution channels. I know a couple people who, as a test, took authentic items into stores, said they purchased them from eBay and got vastly different reaction from sales personnel. MANY companies outright refuse to authenticate items.

I even know of some people who received a blatant "if you didn't get it from our stores, it is not authentic" from sales personnel who are now allowed to provide authentication of items.

Some companies will authenticate at the corporate level, but I think it's a misconception to expect consistent authentication from store personnel. By corporate level, I mean, that there are *some* companies who will allow you to send an item to their corporate office (usually this is the legal department, large companies have specific legal staff to deal with trademarks and counterfeit items) and they will authenticate it. They usually *will not* tell YOU how to spot counterfeit items, which is why most information regarding that comes primarily from avid consumers

If you are unsure about the authenticity of an item, do not buy it. Wholesale or retail. Because if you take a counterfeit to be authenticated and it is, in fact counterfeit, they can confiscate it. You can very well lose either way.

And let me say this for the record because I know everyone doesn't read the archives. COUNTERFEIT MERCHANDISE IS ILLEGAL. If you "copy the style" of an item, this is considered a knock off, and while it is typically a violation of copyright protection, it usually is something of little consequence. When you take a trademark and apply it to a product which is not allowed to bear that trademark, you are counterfeiting and that is a violation of Federal Law. I say this because people use the terms "knock off" and "counterfeit" interchangeably and they are not the same thing.

If I make a pair of sweats that look just like Juicy, I'm knocking them off, the minute I put a "Juicy Couture" label in them, I'm breaking the law.

I Stand Corrected

Today, a moderator of a forum for denim aficionados emailed me the following, and I thought I would share it with you all. For information, but also because the forum looks like a great place.

Before I share his quote, I do want to give you two caveats:

1- Sometimes information I provide becomes dated as things evolve and change
2- Please don't take this as an invitation to start sourcing products outside of their normal distribution channels. I have to say this because most of the readers of my website and blog, by and large, are people who are planning to buy product in some measurable quantity and resell it. Because of that, I try to keep you on the straight and narrow, not in the gray area. So *just because* there are some Diesel jeans made outside of Italy, doesn't mean that Pakistanian factory that emailed you with an offer of 1000 pair is legit :)

Saw your blog - as an FYI, there are diesel jeans which are made outside of
italy. Generally speaking, these are the more 'couture' lines or denim jeans
which are not a part of the standard 'denim' line. I've seen jeans on the
rack in diesel stores with microstitched tags which say "Made in Morocco"
and "Made in Romania." Diesel has manufacturing facilities for other items
in Hong Kong and India, which is why the market for fakes of things which
are made there (shirts, shoes, etc) is much larger than that for jeans. Its
also why you see a lot of fake diesel jeans coming out of asia with tags &
logos which you would ordinarily find on an authentic item from a different
line (eg: tags used only on a jacket used on a pair of jeans).

FYI :)

You Can't Cheat an Honest Person

A dear friend of mine, whose infinite wisdom I respect tremendously, has a blog. And in her blog she blogged me and something I said. And a comment to that blog included a very poignant statement:

I remember an essay by Ayn Rand in which she illustrates the meaning of the saying, "you can't cheat an honest man." An honest man always knows he has to pay for what he gets (one way or the other). Scammers always appeal to the temptation to get something for nothing.

That bolded part was just so profound that it stuck out at me. Scammers DO appeal to the temptation to get something for nothing. Almost every instance of a scam I am aware of involved the elusive "deal of a lifetime". That feeling of striking gold, that you finally found the mother-lode.

The funny thing is that people always look for signs of a scam, Dunn & Bradstreet reports, Better Business Bureau reports, message boards with information, checking telephone numbers and addresses. But time and time again, I have found the best sign is intuition. Every instance of a scam I know of the person who was scammed always knew something was wrong but went ahead despite their intuition.

Scams Are Everywhere

Scams Are Everywhere

This week has been horrifically hectic. To make a very long and gut wrenching story short, there are people out there perpetuating identity theft scams, but they are stealing "company identities" to defraud people.

And fighting this is a very difficult thing to do because the crimes span so many states and jurisdictions that it's difficult to find a central place to use. To make matters worse, many federal agencies will not act on something until they receive multiple complaints. But the catch 22 is that receiving multiple complaints is unlikely unless hundreds, or thousands, have been victimized. Not everyone complains to the same place, not everyone even files formal complaints at all.

As a citizen, you think that law enforcement will protect you but they don't always do.

I know that, been down that road before. What I have to my advantage is that I know enough to know when someone is giving me useless advice. I know when someone at ____(insert government agency here)_____ doesn't know what they are talking about. But most people don't and then end up running in circles, doing what everyone tells them to do but it's all wrong.

Speaking to the people who have been victimized, is really an experience. People prey on those who are already in some kind of disadvantaged position. People looking for a job, people with financial problems, it is rarely the well to do that are victimized.

And so I was talking to a friend because I can't see how so many people would fall for this scam. There are many variations: the company that needs all your personal information to perform a background check (with no face-to-face interview, mind you, this is all done via telephone), the company that needs a "manager" to sign leases on cars, the company that needs a bank account to "deposit funds into" the company that needs to have merchandise shipped to you so you can forward overseas. The scam evolves each time.

Anyhow, I'm telling my friend how I can't believe that people fall for this, you can smell it a mile away. And she says, well, some people truly believe most people are honest. They don't think that most people are scamming.

Nope, try again.

I believe that many people are so eager for a big break, something to rescue them from their financial situation, that they go for things they know they shouldn't just on the off chance that it works.

I think most of us sense when something is wrong. but there are some who will go for it anyway, crossing their fingers in the meantime. Why is this important to you? This is how people get scammed buying bad deals or counterfeit merchandise. I think the psychology of the buyer is just as important as the traits of the scammer or the scam itself.

Anyhow, this has consumed a great deal of my time and I'm just putting the other projects on pause for a moment to straighten this out.

Is it Real, Is it Fake?

A lot of people email me asking for help verifying the authenticity of stuff they want to buy. Sometimes even about an eBay auction. I've never understood that. If you have doubts about something on eBay, don't bid, don't go emailing random website owners asking if you should buy a Louis Vuitton bag that normally sells for $1200 but for some reason is selling on eBay for $300. Chances are, it is fake.

People wonder why he designers don't publish information on authenticating handbags and apparel and such. Simple: it's not their business to educate counterfeitters on being better at it by telling them what not to do. Also they don't want to encourage you to buy outside of their normal distribution channels.

Anyhow, this comes up often when people want to buy something "wholesale." How do you know if it's real?

First and foremost, you must be able to trust the person who is selling you the merchandise. There are some jobbers I trust so much that I don't have to think about what they are selling because I KNOW them to be ethical and honest.

But a lot of problems can be avoided by knowing where something is made. There are people on the internet selling Diesel Jeans made by some special "South American" factory. Diesel Jeans are made in Italy. Show me a pair that you bought in a Diesel store or reputable retailer that has a country of origin label showing that it is made in South American and I will recant.

A friend once had someone call her about a deal on Seven Jeans made in China. Seven Jeans are made in the US. End of story. In fact, many of the hotter contemporary denim brands are made in the US. Blue Cult, Seven, Paper Denim and Cloth, Chip & Pepper, Von Dutch, Citizens of Humanity, yada, yada, all made in the good old USA.

Knowing where something is made saves you a lot of headache. So next time someone in India tells you they make Blue Cult, kiss em goodbye!

When People Don't Listen

One of the reasons my guide is better than many others out there is because it's not hit and run. I don't just find some companies throw up a list and take your money, I answer your questions. But I get so tired of people asking me questions that are covered in detail in my guide.

Let me change that, it's not just any questions, it's the constant question from someone looking for "the source" for Vuitton, Prada or whatever. Sometimes I want to ignore these emails but I don't want people to think I am rude. But if someone is promising you the hookup with a wholesaler of Vuitton, it's not happening and I think from now on, when people ask me, I'm just going to stop explaining.

None of the high end designers have a "wholesaler". They sell direct or through their showroom. I wish people would listen to me when I tell them that. I cover it in the guide and in this blog (read the archives). But sometimes I want to tell them to buy from the "wholesaler" and just throw their money away because they only want to hear what they want to hear.

If this is what you are going to do for money, educate yourself and learn how the industry works. It will save you a lot of stress, and a lot of money.

More About Drop Shippers

One of my customers sent me the URL for a website that drop shipped designer handbags. Now it's fair to say that whatever is the newest scam someone is running on the internet, I don't know about. I don't do research of this type on the internet anymore and the minute you start doing offline research, you will be better off too.

Anyhow, there was this site with all these bags, Gucci, Fendi, Prada, Vuitton whatever. Fake as I don't know what. You want to know how I know it was fake, there are so many clues. One, all these websites have the same bags. There's not that much of a supply of authentic designer bags to go around. But anyhow, the pictures are unusually professional for a company of such image. You see a crappy looking, do it yourself with Front Page website with professional slick photographs and you know they stole them. And lots of people that steal pictures do so because they don't have the stock. This isn't always the case, but is more so the case with a "wholesaler" than with a retailer. And then the company name is some huge company with a huge warehouse but when you look up the domain, it's registered to some guy in an apartment in the middle of nowhere.

Anyhow, this site had these bags and they had some drop ship program with a drop ship fee and a ridiculously high drop ship price. I mean it started at 10% off their retail price and was volume driven with a sliding scale.

No contact information anywhere on the website. Now, you may say, but clothingbroker, you don't have contact information on your website either. Yes, but I am only selling a guide that costs a fraction of what you pay for these bags. And when I did have the number up, I'd get call after call from someone wanting free consulting and advice, wanting me to give up the info of where they could get this or that, these people were in the market for trailers of merchandise (or so they said) but will always say they don't have enough money for the guide. Uh, you can speak to the dial tone.

Anyhow, any reputable company will give you some kind of contact information. Now some buyers work from their homes and they aren't going to give you their home address because, well, it's a stupid thing to do. But when a company says they have a "warehouse" yet will give no address or telephone number, you know they are lying.

Let me repeat this:
When a company says they have a "warehouse" yet will give no address or telephone number, you know they are lying.

I had this one lady, she was so smug because she just knew she had a drop shipper sending out authentic bags and she wanted to prove me wrong. Thing was, she never had a bag sent to her. See, just because someone hasn't made a ruckus doesn't mean the bags are not counterfeit. If you take a bag into a boutique to have it authenticated, and it is fake, they will confiscate it. It's illegal merchandise. So many people who have suspect bags will never have them authenticated because they feel a fake Fendi is better than no Fendi at all, especially when they paid a couple hundred for it. They don't want to be embarrassed.

A friend of mine once got a Fendi Baguette from the Salvation Army. It was so unlikely that it was real. I mean, come on, this was a Salvation Army in the middle of nothing and nothing in farmtown, California. But she didn't want to run the risk, she never had it authenticated.

Anyhow, the point is you could have a seller who's moving a lot of counterfeit bags and no one complains. Even on eBay, you see sellers selling the fakest crap on earth, yet they will have very few negative feedback comments.

Anyhow, getting back to the point, there was no way this company was legit. Oh pay us with PayPal and stuff like that so you can't chargeback unless you want your account locked, we'd never accept real credit cards through a real merchant account because we are not a legitimate business and cannot get one.

Drop shipping is not easy. When you can't even pinpoint your supplier's real location, the last thing you want to do is put your behind on the line for their merchandise. Unless you are out to make a quick buck, and many of you are. So out to make a quick buck and you do not care. Well, get this, you are risking your freedom because people go to jail for selling counterfeit merchandise and they pay fines (heavy fines because it's part of that whole racketeering act, I can't remember the name). So if that's what you want to do to make a quick buck, it's your business.

Authenticating merchandise-- how do I know it's real?

Many people ask me where can they get information on authenticating merchandise. Whether they bought it as a consumer or are looking to resell it, I really can't help them.

People always say that the companies behind these brands should have an interest in helping people spot counterfeit items, and you might think they should. The truth is, they don't. No one has an interest in helping people buy outside the normal distribution channels.

Follow me here, if Louis Vuitton provided information on how to spot an authentic Vuitton bag, it would have two consequences:

1- it would encourage consumers to buy outside their normal channels of distribution because they would have confidence in knowing they could tell a fake bag from the real thing and
2- it would give counterfitters more information they could use to make better counterfeit bags

They don't want either of these. This is why no one helps you out. If you have something you think is fake, the company will authenticate it for you, but if it's fake, they won't return it to you because it's illegal merchandise (and it really is illegal because it's in violation of trademark law and probably a few other laws as well-- I'm not just using the word illegal lightly).

Companies want you to buy from their boutiques and their retailers, not Joe Schmoe on eBay or some jobber. This is why they don't tell you how to authenticate merchandise. When you get scammed buying counterfeit merchandise, it's pretty much to bad for you for trying to circumvent our set up. They might go after the source, but no one's trying to provide restitution to the victim.

Drop Shippers and All That Stuff (from June's Newsletter)

For most of you, you read this in the guide. But this question comes up so much, that I decided to run it again.

I don't think any company in this industry drop ships authentic, legitimate designer apparel and handbags. I mean, why would they? If you were selling them, would you drop ship them? You can sell one at a time at discounted prices. You can sell bulk at a "wholesale" price. But why would you sell one at a time slightly above wholesale price? Most people don't understand the nature of drop shipping and how it came to be. Drop shipping doesn't exist to serve money hungry wanna-be eBay sellers and internet merchants. Drop shipping exists as a fulfillment model for ecommerce businesses and businesses that need the flexibility in stock to be able to provide single-unit fulfillment. So it leans towards industries where this is likely to be the case.

Most of the drop shippers are manufacturers, authorized distributors or distributors that build the drop shipping model to serve a specific line of businesses. Designer apparel just isn't one of them because there are no distributors (in the US), just manufacturers/sales reps (selling at full wholesale) and jobbers (selling at below wholesale prices). Manufacturers/sales reps are in business to sell to retailers that stock merchandise and jobbers want to move a lot of stock quickly, not one at a time. There are some types of garments that can be drop-shipped (directly from the manufacturer), but most are branded and you might not be familiar with those brands (if you must know what it is, it's usually stuff like kinky-erotic lingerie, beachwear, clubwear and things like that).

Another thing people must realize about drop shipping is that it is highly saturated. If you would normally have a few competitors for a product that you stock, you are going to have ten times as many for a drop shipped product. And those competitors will range from crappy fly by night to professional, yet another reason many companies don't want to tarnish their name by drop shipping merchandise. Most designers are already highly selective about the internet merchants they sell to (if they sell to internet merchants at all).

Now people think I am wrong because they find a site that defies logic and drop ships designer bags. They are, most likely, counterfeit, or unauthorized production/unauthorized sales, what some people call "back door goods" because they literally snuck out the back door.

I talk to designer showrooms, sales reps and companies all the time. None of them have any interest whatsoever in drop shipping. Remember, these companies sell to retailers that put up the cash to stock their merchandise. You cannot make an argument as to why it would be lucrative to incur the higher costs of providing single unit fulfillment to people who do not want to invest in their own business and who will probably be out of business in a few months. Not to mention the fact that they can even take weeks to turnaround a regular order, they are not set up for shipping within a matter of 1-3 days.

That's not to say that I think drop shipping is bad. I believe it is a perfectly legitimate business model for specific categories of merchandise. If you are smart, you know why this will and will not work in certain industries. If you are not bright, you can't see why someone won't drop ship because you want to make money that way.

Bottom line- if this is the industry you want to be in, be prepared to stock merchandise.

I also want to add something because I was talking to a colleague about this. She mentioned that there are several eBay sellers that sell handbags and they all ship from Italy but the sellers are not in Italy, so possibly there is an Italian company that drop ships. That's possible. BUT, what is more likely is this: there are very smart eBay sellers out there that know how to take advantage of price differences. They scour websites and find a low priced item and sell it eBay. When they get a winning bidder, they then buy the merchandise from the website and have it shipped directly to the bidder. This is more likely than an international drop shippper.

Years ago, when Sony Mavica digital cameras were really hot, many sellers found them on sale at certain websites where they could buy them for $100-$300 less than the average eBay closing bid. And this is exactly what they did. Things like this happen all the time where people bid higher than the going price. If you really want to find out, invest the money to buy the bag (or other item) and see where it comes from. That will tell you whether it's drop shipped or not.

Most drop shippers use a method that's called "Blind Drop Shipping" where all markings on the invoice/packing slip and shipping label indicate that it comes from your seller/retailer OR has no indication of the company it comes from. If the bag comes like this, then you can be sure that there is a drop shipper. If not, then you have just found the source of the merchandise. It's easier to track a domestic company than an international company because when a US based company ships something to you via UPS, FedEx, Airborne or whatever, you can call their customer service center and ask for the shipper's information. What they will give you is the shipper's name and address as registered on their account. For example, I have a UPS account and on my shipping label, I can put whatever I want. I can put Acme Incorporated, 515 Main Street, Nowehere CA and whatever telephone number I want. But, when you call UPS, they will give you my actual address and telephone number that is registered with that account. Another way of locating a source if you actually find something that is drop shipped.

If you truly believe that someone is drop shipping authentic merchandise, then the price to pay to have an item sent to you is worth the knowledge and the potential profit you can make from that information.

Title Throwback Jerseys, Nike Air Force Ones and Whatever is Hot These Days (from June's newsletter)

I get a lot of emails from people asking for the latest "what's hot now" trend. And so no one ever likes to hear my speech about it, but I will give it here. I don't follow that stuff. See, this guide is not a full time thing for me. I don't spend my entire day looking for suppliers for people. I wrote the guide to help people out, to give them a good start, not to do all the work. So, as a result, the merchandise that I keep on top of has more to do with what I am interested in knowing about than what seems to be the hottest thing.

So that's first. If I don't know offhand someone that might have what you're looking for, I'm actually not going to track down a vendor that sells it. You're the one that is going to buy it and sell it, you're the one that has to do the legwork.

Now the other part about the aforementioned merchandise is that it is problematic. See, when you have a category that is ridden with scam artists and counterfeit merchandise, where only a small percentage of the dealers are legitimate (and thus hard to find), I don't bother investing the time to find those few. After all, this stuff is only going to be hot for so long. An example, designer handbags, athletic shoes and urban apparel. The vendors in my guide that carry this stuff, I just so happened to come across through referrals. I don't seek them out because there are far too many problems with the sellers of this merchandise to whittle the list down to the few good ones.

And yeah, I know you can find all the handbags, Air Force Ones, etc. you want on the internet, but 99% of them are fake. I see the emails, I see the websites, but hey, don't listen to me, blow your money. Lately people have the hot Vuitton bags. FAKE, FAKE, FAKE. But you don't have to take my word for it.

People send me emails saying that they have someone that is going to get them current Nike Air Force Ones at less than wholesale. Whatever. Let me say this again and again and again: if something is very hot, and is selling extremely well in the stores (or in the case of Vuitton bags, sold out everywhere), the chances of it making it to the off price market are slim to none. Off price is about excess, it's about overstock, cancelled orders, needing to turn inventory into cash fast. It's not about undercutting traditional regular-priced distribution channels and circumventing authorized retailers. These manufacturers do not exist to service the off price market, it is a necessary evil of an inefficient marketplace.

Another thing you have to constantly realize is that jobbers are not the only ones competing for this merchandise. There are off price stores like Nordstrom Rack, Loehmann's, Century 21, regional stores, exporters, etc. competing for this merchandise as well.

If you feel like you must, must, must have the latest, greatest, hottest, be prepared to lose a lot of time and money before you luck out, if you ever luck out finding it.