Daniel Shapiro is the Vice President of Brand Relationships for Red Points. After working at Macy’s and eBay, Daniel joined Red Points to lead the company’s strategic partnership with ecommerce platforms, websites, IP firms and other stakeholders. Daniel was a Senior Manager of Brand Protection at eBay, where he led international teams in the disruption of counterfeits worldwide.
1. How many dollars are sold in counterfeit products each year?
In a report put out by the International Chamber of Commerce at the end of 2018, they estimated that the size of global counterfeiting and piracy would reach $4.2 trillion by 2022.
2. How bad is the counterfeit problem in the toy industry?
We have measured the increase of the counterfeit issue in general and specifically the brands we represent in the Toy category: We look at this change rate of counterfeits pre-pandemic and what has taken place during the pandemic. We have the following:
- 58% increase in counterfeits detection in the US
- 123% increase in Toys/Children’s products
We attribute this massive increase to the changes in the family dynamic with kids spending so many hours at home with family and parents trying to manage their time as they may have had work from home situations.
3. Some companies are unsure how to challenge the counterfeiters because they don’t have the knowledge or money? What are some of the adverse effects of doing nothing?
- Consumer Safety. As we know, the toy industry has many processes for testing and compliance to ensure product safety from small parts to paint and material used on toys. We also know bad actors or counterfeiters don’t do any testing or comply with any industry standards. Consumers with counterfeit products believe the Brand that appears on the packaging has caused these potential health issues. So in essence, they blame the brand or sue the brand for putting at risk their family.
- Brand reputation. Counterfeits have the potential to unwind years of brand building by damaging reputations. When consumers buy counterfeit and believe it to be an original and the product doesn’t meet their expectations, they often complain directly to the brand. They may even leave negative reviews on their site or social media pages. Brands end up taking responsibility for faulty or defective products that are not theirs. In our market research we have been seeing more consumers no longer buying from brands that cause a negative experience and moving to other brands. Competition is such that if you believe a brand is making poor quality products, you find another brand to buy from. Of course, brands need to know their product is not faulty but rather it is a counterfeit. This is a call to action to be very proactive and remove these damaging listings.
- Loss of Revenue. We also see that when there are a significant number of counterfeit listings on marketplaces, social media platforms and stand-alone ecommerce sites, brands experience two major problems:
- 1. Downward pressure on price and
- 2. Consumers who have purchased a counterfeit no longer need an authentic product, meaning a potential lost sale.
- Harmed partner relationships. As previously mentioned, brands who do not solve the issues of counterfeit listings put undue pressure on their retailers and distributors. Meaning, the downward pricing trends (counterfeit product not authentic product) impacts retailer’s profit or drives them to carry different products that are not so widely sold as such discounts.
4. How does Red Points work with toy companies to take down counterfeit toys?
- Red Points uses robust technology and sophisticated business rules to automate the detection and enforcement of any listings that are infringing on the intellectual property of our client.
- Brands share with us their intellectual property and any other proprietary information that helps build the key criteria to input into our technology.
- Red Points is a cloud based technology solution that is available 24/7 and can be accessed by all authorized users from any computer.
- The data that is collected in our solution helps brands make many business decisions from the supply chain, distribution networks, to revenue opportunities in new markets.
- In short, Red Points allows a Brand to have the most sophisticated brand protection team at the click of a very few buttons. We reduce the time spent on brand protection issues and give valuable time back to the businesses.
5. What are some of the steps you take?
- We manage the entire process for our clients, meaning we automate the searching or detection of infringements, all the way through the enforcement (removal of an infringing listing). In addition, if some cases where a marketplace or social media platform may push back on an enforcement action, we manage that push back as well.
6. In what countries do you operate?
We have more than 900 clients from all around the world, and offices in New York, Salt Lake City, Beijing and Barcelona.
As for our reach, we are searching all over the world. We are constantly seeing new marketplaces arise and as they do, so does our offering to our clients. Not every client needs us to scour the globe, but for those that need extended coverages we are always expanding.
7. Going to court is, of course, expensive. What is the cost of pursuing counterfeiters through Red Points?
- Red Points Brand Intelligence Solution is sold to our clients on an annual contract that can be paid monthly.
- Those costs depend widely on the client, meaning it depends on how robust the IP Portfolio of the given client. As you know some smaller brands may have their trademarks filed only in the US and Europe and therefore we will only be able to take down listings that fall within these jurisdictions. Others who may have an extensive IP Portfolio means will be detecting and enforcing all over the globe.
- As a note Red Points does not provide legal services for court cases.
- Having said that, all the data we collect is kept in perpetuity for our clients and thus all this data can be used as evidence used as evidence in court cases.
8. How effective is Red Points in removing counterfeits?
- Red Points has an effective enforcement rate of 97.3%, Again this can be dependent on the client IP Portfolio.
9. How can someone contact you or your company about your services?
They can get in touch by clicking here: https://www.redpoints.com/contact-sales/ or they can feel free to reach directly out to me at dshapiro@redpoints.com
