Consumer Education – “Too good to be true”

Sometimes when the deal is too good to be true or just doesn’t seem right it really is “too good to be true” In these cases I usually go with my gut feeling on it. If time presents itself I do a little research.

Tonight time presented its self.

I had someone mention to me about a company that offered really great deals on cycling clothing. The person said that the pricing “is almost too good to be true.” This individual had even ordered from this company and was happy with the first products that they received.

My initial thought was that this was an overseas company, typically in China, that goes to the factory that makes the product and has them reproduce the same items without the creator/manufactures authorization. Your purchase is made overseas with your money being spent overseas and not helping the American economy in anyway.

Factories in China are becoming more notorious for reproducing things they are making for international companies and reselling them. I have a friend who was looking into having a factory produce one of his products. He was told by more than one person to:

1. Not have everything for the product produced in the same factory.
2. Don’t tell them what the parts are for.
3. Expect them to lose the tooling for the product.
4. If he had everything made in the same factory to expect to see the same product for sale in the near future under a slightly different name but identical to his product.

Pretty scary stuff to think about.

When I jumped online a little after 10:30pm on the Sunday night of Labor Day weekend I was surprised to find the chat being marked as on-line which lead me to believe more that they were an overseas company.  I know consumers are expecting companies to be accessible 24/7/365 but we aren’t their yet and likely not for a company of this size.

I looked around the web-site to see if they said where they were from but I couldn’t confirm it on the site. So I decided I would Chat with the company and see what they said about their products. (A copy of the chat is below.)

They confirmed what I thought. They use the same factories but do it without the authorization of the company. When asked if they were “authorized products” I was told they weren’t.

I understand that people like to save money but sometimes it comes at a cost. Many consumers don’t realize that they are not getting genuine items. This website had just about every pro cycling team kit on it as well as the Lance Armstrong Foundations Livestrong kit. In this case the Livestrong Foundation isn’t realizing any revenue from their logo being used, neither are any of the other teams or companies. I am a big fan of the Livestrong Foundation and this upsets me that someone is capitalizing on the foundation without paying a fee for it.

In cases like this it is the consumer who often loses since they end up not being covered by a manufacture warranty, aren’t receiving “genuine” products. These may not be a concern for every type of product purchase. Many are likely to consider it important with electronics but maybe not so important on a cycling outfit.

When presented with these “opportunities” the consumer hopefully weighs the risk versus the rewards and the importance of the creator or designer getting their share. This is a big area of discussion and much has been written about this sort of thing as it relates to the music industry. The major sports franchises have also been battling this for years with licensed apparel sales. This issue continues to grow on almost daily bases.

Our country’s economy is built on people getting paid for their ideas and creations. These people need support to run their business. They utilize other companies and employ people to assist them. Thus jobs are created. Lots of this seems to be slowly eroding away; as this happens it will continue to hurt the individual’s ability to earn a living from their work and further damage the economy.

In the long run that savings may not be as great as you think. It could come at an even larger cost.

Chat from Sunday September 4, 2011: