After learning about some of the risk distributors and their customers can face when counterfeits enter the supply chain, Maurice Electrical Supply, a $166-million distributor of electrical products in Washington, D.C., organized a seminar for its customers.
"Can I defend myself?" asks Warren Janes, Maurice vice president for sales and marketing. "You realize you can't. So you have to educate your customer base, and between the two of you figure out a way to move forward."
About 95 percent of Maurice's customer base is contractor, a segment that Janes wanted most to educate. Due to many contractors' strict focus on price, cheaper products found online or made off-shore are attractive. "So they need to be educated on the value we provide, and the safety issues that can come with imported product," Janes says. "They're really sticking their neck out and could find themselves in a product liability lawsuit."
Still, many of the contractors he invited to the seminar did not come. They told him that the issue of counterfeits and product liability was Maurice's and not theirs. "The few contractors who came did get their eyes opened," Janes says. "They got it."
Government customers and Maurice's salespeople attended as well.
To continue educating his customer base, Janes sends information in a monthly e-newsletter and posted the presentations made at Maurice's counterfeiting seminar on the company Web site.
"The message should be -there are cheaper products available to sell to you, but it's not worth it," Janes says. "I can't tell you how scary it is to put in a product and have it fail. A distributor could find himself having to defend a wrongful death suit."
Clark Silcox, general counsel for NEMA, the association for electrical manufacturers, says that that organization along with the National Association of Electrical Distributors has worked to educate contractors and builders on the risks of counterfeit products.
"Contractors and electrical subcontractors need to take this seriously," Silcox says. Silcox says that the manufacturer whose brand is illegally placed on the counterfeit product will not be held liable for defects or injury. "You're not liable simply because your trademark is there. So the brand owner will generally get dismissed. So that leaves the contractor or the distributor holding the bag.
"I've heard stories from distributors who have said electrical contractors have come to them and said their general contractor is telling them to buy products at a certain price point. And the inference you can draw from that is that he's not in a position to buy from that distributor. But to buy product at a price point below what a wholesaler can get it at ought to sound an alarm bell."
The end message: Buy from an authorized distributor. "The authorized channel is a reliable source of genuine product," Silcox says. "If you stick with that and don't go looking in an alternative channel you can buy reliably."