What images come to mind when you think about counterfeiting? Stacks of $100 bills in an abandoned warehouse? People hawking “designer” handbags on a crowded street corner? What about an industrial accident that leads to crippling production delays or even loss of life?
In most cases, the consequences of counterfeiting are limited to financial loss and perhaps some embarrassment. But industrial counterfeiting is different. When fraudulent machinery or components enter the US market, the consequences can be deadly. This is the fear around the growing problem of counterfeit ball bearings.
Ball bearings are an ideal target for counterfeiting because they’re everywhere (if it spins or rolls, it’s most likely got at least one bearing in it) and because the inner workings of ball bearings are unseen, housed under the rings and beneath the seals.
For the most part, if a bearing is the right size and looks new with no outwardly visible defects, people tend to assume it’s legitimate. Thus, in some cases, creating a counterfeit bearing is no more difficult than polishing the exterior and shipping it in a nice, new box.
The numbers bear this out: in spite of growing awareness and several high-profile busts, there are more counterfeit ball bearings on the market every year with large bearing manufacturers bearing the brunt of the financial damage.
Indeed, the problem has become so serious that the major bearing manufacturers have joined forces to address counterfeiting through the World Bearing Association and its campaign to Stop Fake Bearings. This is good news for public safety and The Public Trust. Plus, it’s easy to support the rights of bearing manufacturers to recoup lost profits and protect their business.
But their efforts come with a concern for smaller manufacturers and importers who don’t necessarily have the resources to proactively address every aspect of the problem.
In an environment where people are increasingly concerned about counterfeit bearings, customer comfort is a big deal. Unlike the major manufacturers, smaller companies can’t quickly hire staff or refocus quality control to make their customers more comfortable.
So as big manufacturers sound the alarm on counterfeit beings, smaller manufacturers and importers have to quickly figure out how to make their customers comfortable or lose them to larger, established manufacturers (one of the corporate sponsors of the Stop Fake Bearings campaign, most likely). And in some respects, who can blame them? Why take the risk?
The net result is that while one fake bearing could mean disaster for a business, the fear of one fake bearing has already created a disaster for small and mid-sized bearing manufacturers and importers as fewer and fewer of them are able to compete.
Indeed, it’s safe to say that while large manufacturers have borne the financial burden of the counterfeit trade, the reputational damage has accrued to the smaller business who can’t produce 100,000 slick brochures touting a new anti-counterfeiting process or who simply lack the time or connections to protect their turf.
So is there a solution? Can we keep counterfeit bearings out of our market in a way that protects the ability of the smaller player to compete? We’ve got some suggestions:
First, don’t enforce a top-down solution that puts smaller manufacturers at a greater disadvantage than they already are. Include small and mid-sized manufacturers and importers in the conversation and the solution.
Second, build on recent progress and advocate for stiffer penalties for industrial counterfeiters. Indeed, if you consider all counterfeiting to be an assault against the public trust – which we clearly do – we don’t just need stiffer penalties, we need more creative penalties.
Third, remove incentives for counterfeiting by reducing the barriers to competition that make it a viable option. Rather than restrict access or erect new hurdles, we should encourage freer competition as the surest way to open markets and squeeze those who would seek to exploit them at their fringes.
On a more practical level, the most important thing that small and mid-sized manufacturers and importers can do is to know and pre-qualify your suppliers. This is how we’ve done business at COREDEMAR for nearly 50 years.
We’ve found that even though we don’t have the resources to print 100,00 brochures or implement a splashy new process, we’ve been able to do other things that demonstrate faith in our product and increase customer comfort.
We try to minimize customer concerns by maximizing service, taking advantage of our flat decision-making hierarchy to give our customers a level of flexibility and personal attention that larger manufacturers can’t match. Strong customer service is a great equalizer.
What are your thoughts about counterfeit bearings? Share them below. And for a great primer on counterfeit ball bearings, please refer to this article by David Manney at Watts New.