AliExpress is one of the largest platforms for ecommerce entrepreneurs to find dropshipping products. However, caution is advised in selecting goods on the platform. That’s because some suppliers sell copyrighted or counterfeit merchandise on AliExpress, which can cause issues for your business.
This article will inform you how to avoid counterfeit goods on AliExpress. You’ll learn about the implications of selling fake goods on the platform, how illegitimate suppliers cause merchants to infringe on intellectual property, and ways to legally safeguard your dropshipping business.
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What are counterfeit goods?
Counterfeit goods are fake products that carry the name and logo of a particular brand. The items may appear legitimate and safe but are produced and sold illegally. When you purchase counterfeits, you’re not actually buying from intellectual property owners. Top counterfeit products include designer bags and garments, electrical items, clothing, toys, watches, and cosmetics.
There are good reasons to avoid counterfeit items. Typically, they’re of inferior quality to the original product and may not work as intended. Some may even put the health and safety of your customers at risk. For example, fake cosmetics are not as rigorously tested as genuine ones need to be, so they may cause allergies or damage the skin.
Plus, you’re likely to experience business-related issues if you keep shipping counterfeit goods to your customers. We’ll discuss these later in the article.
Counterfeit goods statistics
While the issue of fake goods may not seem like a big deal to many, counterfeit goods statistics suggest it’s a growing problem that’s ringing alarm bells across global supply chains.
According to a U-NICA report, US Customs and Border Protection seized $1 billion worth of fake items in 2022. The report cites the influx of fake products from China as the key reason behind the growing value of global online counterfeiting. Since it’s easier to make and sell knockoffs in China than in other countries, the majority of producers manage to make a hefty profit as well as escape legal repercussions.
Despite the Chinese government’s efforts to crack down on counterfeit goods production, comprehensive monitoring poses a challenge due to the sheer size: There are millions of sellers on AliExpress and other platforms, and each seller is selling products from all types of different wholesalers, retailers, and other suppliers. To identify every source of counterfeit goods is a near impossible feat. This fact makes it crucial that you remain vigilant when dropshipping products from China.
Legal risks of selling copyright or counterfeit goods
As an ecommerce entrepreneur, there are various ways that you can be negatively impacted by selling copyrighted or counterfeit products. Here’s a list of issues you might face when found offering such items:
1. Payment gateway issues
You can run into problems with your payment gateway if you’re selling counterfeit goods. Payment gateways might ask you to provide a reseller agreement for the products you’re selling so they can clarify that you’re legally allowed to do so.
If you fail to provide this documentation, you’ll be blocked from using the payment gateway, which means you won’t be able to receive money from your sales.
The only way you can get around this issue is to provide the payment gateway with a reseller agreement or start a new business selling legitimate products.
2. Facebook/Instagram account problems
If you sell fakes from your online store, you may run into problems with your Facebook or Instagram accounts. You face the potential of having the accounts you worked so hard to build up a following for permanently banned if you’re found to be engaged in intellectual property violations.
The issue becomes particularly significant if you’re utilizing these platforms to promote your business. With few platforms matching the reach and targeting capabilities of Facebook, you could find yourself limited in alternatives and potentially facing adverse impacts.
3. You may have to pay a penalty
The federal law systems in most countries make it illegal to sell counterfeit goods. If you get caught selling fake products, you will have to pay the penalty. The maximum penalty for offenders in the US is a $2 million fine and 10 years in prison.
In the UK, those involved in the trade of counterfeit goods face an unlimited fine and a maximum sentence of 10 years. The best way to avoid a financial hit and jail time is to ensure that you’re not making any dropshipping mistakes with product selection.
4. Your competitors may harm your brand’s image
If your competitors find out that you’re selling counterfeit goods on your store, they might take steps to damage your brand’s image. For example, they can sponsor a press release to inform people that they’re taking a risk when they choose to shop from your website.
They can also work with influencers to spread negative word of mouth about your business. If you’ve worked hard to build a brand image and have a good reputation in your niche, avoiding counterfeits should be at the top of your agenda.
5. You may need to close your store
If you’re found selling copyrighted or counterfeit goods on your store, the original manufacturer may report you to AliExpress.. In this situation, you’ll need to remove the product from your store or shut your store down completely, or face legal action.
Taking this into consideration, it isn’t worth stocking these items in your store’s inventory and facing this risk.
Best practices for sourcing legitimate products from AliExpress
Although there are many high quality products on AliExpress, there’s always the risk of illegitimate products finding their way to your inventory. To prevent this from happening, consider the following best practices:
1. Check product reviews
When sourcing from AliExpress, start by examining product reviews. They provide feedback on customer satisfaction and shed light on product quality.
Simply browse the Feedback section located below the product images to uncover these insights. If there are a lot of negative reviews and mentions of “counterfeit,” it’s better not to source that product.
2. Check product star rating
AliExpress has a product star rating for each listing on the platform. You can use the star rating of a product to identify if it is legitimate in two ways: 1) Checking the overall rating; 2) Checking the number of reviews it has. You can locate this information just above the product description.
If you find that the product has a high overall product star rating and lots of reviews, it’s likely a legitimate product—a perfect addition for your dropshipping store. Products to avoid dropshipping include items with a star rating of 4.0 or below.
3. Check supplier feedback score
When you’re sourcing products from AliExpress, it’s also a great idea to check the supplier’s feedback score. You can access this at the top left corner of the product listing. If you find that the supplier has a high feedback score, it’s a strong indication that their products will be legitimate.
You can also see how long they’ve been active on AliExpress, which will give you a good idea of the legitimacy of their products—if they’ve been active for a long time, you can assume they’re reliable suppliers.
4. Check logo and other trademarks
Even if the products look authentic, compare the logo on them with how brands usually place their logos. Fake products often feature poorly copied logos, and the trademarks on them are often misspelled.
5. Check the supplier’s other products and guarantees
Consider the product warranty offered by the seller. This can be seen in the Seller Guarantees tab on an item’s page. Fake products are usually sold without a warranty. Still, a seller may offer a generous warranty (a few weeks to a month’s warranty for electronics, two to three months’ warranty for clothing, and other similar items) to gain your trust. Remember, original products often carry a warranty for one to five years.
6. Create a test order
It’s always a great idea to create a test order for any products that you’re sourcing from AliExpress. This means that it will take you a little longer to start making sales, but will pay off in the end, as you’ll be able to analyze the products your customers will be receiving. Think of a test order as your very own quality assurance.
7. Avoid trending items
It’s usually a good idea to avoid trending items, especially if you’re late to the surge in popularity. The reason for this is you may be unknowingly selling counterfeit goods, which can land both you and your business in legal trouble. Some suppliers try to cut corners when the demand for their product increases, so it’s best to be vigilant of this.
Keep your store safe and in good standing
Counterfeit goods are an unfortunate reality on AliExpress. As a store owner, the responsibility falls on you to safeguard your store and reputation from these deceptive products. By following the best practices outlined in this article, you can effectively shield your business from counterfeits—ensuring authenticity becomes your USP.
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Want to learn more?
- GDPR Compliance for Ecommerce: What Store Owners Can Do
- How To Select Dropshipping Suppliers
- What Should You Sell Online? A Guide for Beginners
- Products to Avoid With a Dropshipping Ecommerce Store
Is there anything else you’d like to know more about and wish was included in this article? Let us know in the comments below!