October 17

A Quick Observation on the Economics of Counterfeiting

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It’s often overlooked that counterfeiters and related crooks need to operate within the basic rules of business economics – just as a legitimate business does.

The bottom line is as simple for them as for any business. If the item you’re faking costs more to produce than you can sell it for then you’ll go bust or at least need to stop before you do so. In fact, it’s not just a margin that’s required because that margin has to be sufficient to make it worth your while continuing with your faking.

None of this will be news to anyone that has run a legitimate business but it’s important because it’s a subject that feeds back into the logic behind using our brand protection. Australia isn’t alone in suffering a severe impact from counterfeiters and that’s why our DNA-based solutions are becoming globally popular – they hit the crooks where it hurts, in their wallet.

Why?

We have invested large sums of money and considerable scientific expertise in perfecting our DNA encoding. It would be difficult if not impossible for a counterfeiting organisation to be able to replicate our technology as their R&D and eventual production costs would simply be unsustainably high.

In other words, using our solutions helps to change the financial metrics unfavourably for the criminals.  It’s likely to be a powerful reason for them to sit back and think carefully about what they’re doing, why and whether or not it makes economic sense to continue.

As an approach, it’s perhaps not as dramatic or compelling reading as those raids by the authorities with all the blue lights and uniforms. Yet it might prove to be just as effective, if not more so, as it attacks those financial foundation stones that underpin every enterprise – even those that are criminally run.


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