Comments on: Stock lots and brandname copies

By: Renaud Anjoran

Renaud Anjoran — Mon, 28 Mar 2011 04:13:10 +0000

Mr.I,
You will run a risk anyway if you buy branded products. I am not a lawyer, so I’d rather not respond to your questions precisely (it would probably be wrong).
And I don’t know any good resource about stock lot businesses.

By: Mr.I

Mr.I — Sat, 26 Mar 2011 13:28:18 +0000

Hi,

Thanks for your sharing, appreciate it a lot. Moreover:
1) What if i buy the stock lot clothing from those less famous branding company; will i have the legal problems if the original buyer found out?If yes, can you give me any advise how to avoid legal issue in trading the stock lot business.
2) will the above legal issue been solve or minimize if i buy stock lot from other country and resell it to another country (exluding the custom’s risk)?
3) The best way to conduct this business, is involved in a position of a broker/trade agent? true or false? handling trading of stock without going thought my company.
4) Can you refer any website or reading material info regarding the stock lot business?

By: Renaud Anjoran

Renaud Anjoran — Wed, 23 Mar 2011 13:02:05 +0000

Mr. I,
I am not an expert, but here is my opinion:
1) You might have legal problems if the original buyer sells products under the same brand, even if it’s different models.
2) I mean the importing company takes the risks, and is closed easily and without risk to its owners if it gets into trouble. And someone brings the goods to a forwarder’s warehouse, which means the “shipper” on the bill of lading is the forwarder itself.
3) Yes, you might buy these goods and be unable to sell them. Up to you to appreciate the market risk.

By: Mr. I

Mr. I — Wed, 23 Mar 2011 12:05:33 +0000

Hi, thanks for the info above. Here there are a few question i would like to ask you:
1) As per mention; if the manufacturer is making clothing production from a well-known branding company. Those extra/additional/rejected stocklot will be sell it through other distribution channel. I’m wondering if I buy the remaining stocklot and resell it to other country, will this consider illegal?If the branding company knows about it, what is consequences?
2)Can you elaborate more on the followings point?
# The consignee (the importing company) is set up for this purpose only, and its capital structure is not transparent.
# The shipper is a forwarder. So the factories simply deliver the products in a warehouse, and nobody can trace the shipment back to them.
3)If i order the stocklot clothing from the manufacturer, which i’m not directly send it to the retailer; in other words i will keep the stock lot for few weeks time waiting customer to buy it; will this be much more higher risk?

By: Renaud Anjoran

Renaud Anjoran — Mon, 13 Dec 2010 03:05:04 +0000

Hi Brad,
Thanks a lot for writing about your experiences.
As you say, it’s not always easy to (1) be aware of these issues and (2) trust the factory to effectively take the right corrective actions. It can be pretty tough to be a buyer in China.

By: Brad Pritts

Brad Pritts — Sun, 12 Dec 2010 23:00:49 +0000

Two possibilities I have heard of:
1) In a situation at one of my clients’ US factories, we had a large accumulation of nonconforming product due to a defective component spec’d by the end customer. The product in question was a brake part, so they were concerned not only with losing sales but also potential liability in case of an accident. The end customer agreed to accept the cost of the scrap, but insisted on evidence that the material had been destroyed. (They accepted a combination of photographs and a manifest from the waste company; I am not sure that I would be convinced by that kind of evidence from China).

2) I have heard of other situations where the customer requires that the defective goods be defaced in some way – cutting off logos, etc, before the goods leave the factory. This still isn’t foolproof – I’ve personally bought such clothing in Hong Kong – but the brand owner now has a different bargaining position if confronted by a buyer of the gray market goods. North Face (outdoor clothing and camping gear) sells some goods in its own factory outlets with reduced warranty; they put a mark on the product label for all the goods sold through this channel. (They fill in the “o” in “North” on the product tag with a black marker.)

Of course, before you ask for either of these, you need to be alert to the problem in the first place!

Brad
QA/Sourcing – Automotive products

By: Does your China factory sell your products on Taobao.com?

Does your China factory sell your products on Taobao.com? — Sun, 12 Dec 2010 05:28:47 +0000

[...] Stock lots and brandname copies [...]

By: Preventing parallel supply chains

Preventing parallel supply chains — Fri, 20 Nov 2009 13:01:18 +0000

[...] In my last post I wrote about what I call “parallel supply chains” from China to Western countries: stock lots left in factories, and copies of brand name products. [...]