How Counterfeiting Affects Small Businesses

Meet Lilian

counterfeit small businesses

Lillian is a single mother who has been struggling financially to take care of her child. In fact, she and her son have not been able to visit her mother in three years simply because she could not afford it.

One day, Lillian came up with a great idea to design grocery bags that women can take to the market or grocery store. She designed the first few bags and sold them to women in her neighborhood to pilot the idea. The women loved it and began ordering more. She realized that she could turn this into a lucrative business that could help her get out of her financial struggles. She wrote up a business plan, found a manufacturer, secured her distribution channels, got a loan from the bank and started manufacturing. Her bags were selling out quickly and she could finally afford to buy good quality clothes for her child and take that trip to visit her mother.

A few months went by and sales started to decline rapidly. Lillian was very concerned and unsure why this was happening. She decided to do a little market research. She visited stores that she knew might sell her grocery bags and realized that they were actually selling fake versions of her bag. Lillian was heartbroken; all of her hard work was going down the drain because counterfeiters were manufacturing substandard versions of her bags.

Lillian’s story is one of many small businesses. Many people take the risk to start their own companies and work very hard to run their business successfully. But counterfeiters make it difficult by making a profit off of business owners’ hard work.

4 reasons why you should not support counterfeiting;

  • Counterfeits are a waste of your time and money: counterfeit products are generally not made with the same quality and care as their genuine counterparts, which means that it may not last as long as the original versions, not have the same features, or meet the expectations you have for that brand. In some cases, like with car parts, the counterfeit versions can be very dangerous and cause unwanted accidents.
  • You support only honest, legitimate businesses: if consumers decide not to buy these goods, these criminals will have no incentive to keep making counterfeit products. You also ensure that you’re not supporting organized crime, which has been strongly linked to the counterfeiting industry.
  • Counterfeiting hurts the economy: Counterfeiting leads to lost jobs in the company with the original product. A decline in sales means the company needs to cut down on costs and let go of hardworking, honest people because they simply can no longer afford to keep them.
  • Counterfeiting can be very dangerous: Depending on what the counterfeit product is, it may physically harm the consumer. For example; counterfeit drugs, counterfeit auto parts, counterfeit cosmetics, and counterfeit foods have all been found to contain ingredients or parts that can put people’s safety and wellbeing ins serious harm.

Is your company facing counterfeiting issues? How are you handling it? 

At  Sproxil, we are dedicated to developing amazing, innovative services that enable companies to protect their products along the supply chain and even in stores. We have an extensive post on how our services work here.


Have you been a victim of counterfeiting? Share with us some other examples of how counterfeiting affects small businesses.


The story of Lillian is a fictional one drafted for the purpose of this blog