Keeping Your Goods off the Black Market

Walking around the markets of cities in China, amidst the whizzing of motorcycles and the haze of smoke from street barbeque, you may be surprised to find shops and stalls selling high end products.  Of course, a large sum of these items is low quality counterfeits, but you can occasionally stumble upon a hidden gem that sells real pieces, which are often leftovers, samples, or defects from the factories.  These items were not intended for the market and could act as a poor representation of the brand.

How can you ensure the proper disposal of defective goods, samples, and prototypes from thousands of miles away?

The first step is in communications with the supplier.  You must first inquire about what kinds of practices they have in place for handling samples, extras, and defectives.  Clauses can be put into an agreement to verify these goods will not be released to any third party, but instead will be properly disposed of.

The source of these black market products doesn’t end here. If you are sourcing a high end or luxury item, you must also ensure extra materials are properly disposed of as well.  Factory workers can be crafty and clever. As if taken straight out of the plot of Orange is the New Black, some workers will use extra materials and put in extra hours to replicate these name-brand goods.  They do have the know-how, after all.

So specifically, what kinds of arrangements should a buyer and a supplier put in place to avoid improper use of goods and materials?

1. Ship all defective products, samples, and spare parts along with your completed lot.
   
   This will give you the opportunity to destroy, alter, or save the products as you see fit.  Although adding extra to your shipping load is a more costly option, this gives importers more control over their property, both physical and intellectual.
   
   
2. Request a certificate of destruction.
   
   Creating an official document to verify the proper handling of leftover goods and materials will give clear notice to the procedures used and generate an official record.
   
   
3. Appoint an in-house or third party witness to observe the management/destruction of goods and materials.
   
   Having an in-person witness to the proper handling of these goods is one way to guarantee the products are not being mishandled in any way.

The last thing you want for your well-known brand is to have its reputation tarnished by incompliant practices.  Be sure to cover all the bases to protect your company image.