eWedNewz by Paul Pannone

By Paul Pannone

Dominating national news and headlines are stories about how America is under attack by foreign sources who’ve managed to infiltrate our system and take advantage of America’s  benevolence.  Trade agreements that have been one-sided in favor of countries who’ve essentially stripped away our middle class and created low-wage jobs manufacturing goods in their factories to sell back to us at prices we can’t compete with have disrupted our standard of living– with no end in sight.

Decades after  Richard Nixon paved the path for foreign countries to have their way with us, growing unrest and even a pushback followed by this newZ source watches the battle cry led by companies who’re bringing back a small amount of production to American soil. But most agree it will take decades to undo the harm caused by unfair trade agreements and political help by a government that has stood by and watched the middle class disappear.

Head of the ABPIA, Steve Lang, works tirelessly to raise awareness to the causes of why America faces difficulties ahead if steps are not taken to reverse course against trade imbalance and unfair restrictions against U.S businesses.

eWedNewZ watches the steady advances– or at least the slowing of losses– against foreign countries. Online campaigns and associations sparked by Social Media updates gives hope that more progress is made against job losses and damage by countries we’re indebted to.

Lang’s efforts are gaining attention and support beyond the wedding business. His agenda intersects with national causes that have a greater chance of gaining the support of political lawmakers.

Discussions helped encourage the following statement  from Lang now making its rounds in news circuits, gathering more support from organizations committed to uphold American causes.

“Dear Friends,

What is the role of government?   To me, the role of our federal and state government is to promote a successful society , to enforce all laws  that have been enacted for the welfare of the citizens, and to expect changes in the world community that may need adjustments and adaptation to make sure the viability and safety of our country.

Yes, you could flesh out this list into many sub categories or even add extra mast-head of obligations the government is charged with, but when it comes down to it, safety and prosperity are the cornerstones of any good government.

There are millions of jobs our government faces daily and it is impossible to tackle every one with total  success. Let’s face it; there are so many agendas and so many projects, no one is going to agree 100%  with priorities, let alone solutions.

I am going to highlight one such set of problems that is perhaps a microcosm for so many similar issues that arise in our daily lives. It would seem at first glance something our government should be addressing fervently, but alas, has not been able to attend to efficiently.   It is a serious issue approached by many people; even by congressmen and woman with little success.

The problem is counterfeiting of products in China.   Our economy faces a threat that the Wall Street Journal, TV Journalists, magazines  and other media has discussed for years but to little avail.   However, the problem has  grown dramatically.

When we think of counterfeiting we immediately think about pirated Microsoft software , hit movies or the fake pocketbooks and watches sold on street corners in major cities here and abroad.  But it goes deeper. The WSJ recently ran a story and estimated that the value of counterfeiting from China represents a business in total that would dwarf the sales of Wal-Mart many times over.

Do I have your attention now?  I should.

Let’s look at the food chain effect of counterfeiting.   First, the consumer is getting product that is sub standard and certainly not the quality of the original. I do not think anyone would agree that a $50 copy of a $1,000 leather purse from Louis Vuitton would equal the value of the original.

Secondly, the true product invested in by legitimate retailers do not get premier positioning they deserves when cheap imitations are available anywhere.  Copies cut the appeal of the original design house’s creation.

What about the lost dollars in the retail marketplace and the volume lost by the original designer? What about the rents, salaries and overheads these legitimate  supply chain members face?  What about the customs duties and brokerage fees the counterfeiters are not paying to our government?   What about the multiplier effect of the dollars lost in commerce?  For every buck in circulation that dollar represents hundreds of more dollars in transactions as the dollar is spent over and over.

I would like to highlight what is happening in my industry, the bridal and social occasion industry , and then explain how the broader economy is about to be what I term, “Pearl Harbored”, in the near future.

I am one of the largest worldwide manufacturers of bridal gown, social occasion dresses, children’s clothes and basically anything needed for a wedding or special occasion. A few years ago we noticed websites in China stealing the images we produce for our gowns right from our websites and using this IP to sell knock off dresses directly to consumers around the world.  What started out as a small issue has mushroomed into a catastrophe for my industry. There are now over 3,000 counterfeit websites  stealing sales and more are on the way.

They copy our clothes in very poor versions, but they use our beautiful images to dupe consumers.  Since first discovering this phenomenon a few short years ago our industry is now under siege and we estimate that as many as 700,000 units were lost to pirates last year.

Not only are the sales lost a huge problem, but we see retail stores struggling and failing and that means lost jobs, lost taxes and business failure for many.

So what did we do?  First we went to US Customs.  You would think that there is a swift action plan in place to stop this.  Wrong.  Dealing with government was like dealing with the motor vehicle office.  A lot of running around and a lot of “it’s not that easy” rhetoric.

Next we contacted local congressman.   More of the same.

We were desperate so we created an industry association, the American Bridal and Prom Industry Association, or  ABPIA.   I am president of the association and I mustered support among industry professionals from retailers to manufacturers, sales representatives, apparel marts and anyone that had a vested interest in the fight.

We went to Federal Court and made a compelling presentation to the Court on the size and scope of the unlawful use of our brands and our images to sell “knockoff” products.  The Court issued orders which froze the PayPal accounts of some 1,200 “knockoff” website owners and directed the domain registrars to disable the websites and shut them down.  This is only the beginning of the war we will wage against counterfeiters.

So where is Customs? The Department of Commerce? The Attorney General’s Office or any other governmental agency that one would think would rush in to help?   Remember, if government is there to protect and help society prosper, where are they?   Does anyone have a clue?  I wish I knew.

Where is the tipping point at which point the government is forced to get involved?

They disassembled Air Force One for a rebuild and found counterfeit transistors.   How?  A supplier bought components from another supplier and they were not genuine quality. How could this happen?  They bought the components  from a reliable source!   Think again—-counterfeit.  The reliable supplier bought components unknowing they were counterfeits from Asia.    Ever wonder how Black Hawk Helicopters mysteriously fall out  of the sky on routine missions?   Could it be their equipment was compromised?

Is this enough to get government to swing into action?   Unfortunately, NO!

We are losing immense volumes of commerce and jobs due to unfair trade situations with China ( and other countries) yet there are no sanctions in place to correct this imbalance.  Government, where are you?

Back to my industry story.  We go to Google and ask them to stop aiding and abetting thieves. What do we get? A run around and excuses.  We’re told there is too much traffic ( which they are handsomely paid for as the counterfeiters are dumping tons of money into Google ad words) to sift out the pirates.  Really???. They were quite capable of sifting out child porn when asked to do that, right?   We have technical people we hired who have ways to catch the thieves by searching certain characteristics of their sites, just the way childhood porn is caught.  Yet, the Google legal department gives us lip service.  So far they fear nothing  from our legal team nor from the government.

Do we have to now sue Google to protect our businesses?   Is Google being a good citizen?  I don’t think so…

Now let’s turn to what I call the “Pearl Harbor Effect”.   Study Amazon.  I remember where I was when I first heard of this company.  The news reporter said Amazon wants to reinvent how we buy books.  I snickered.  Well, ask Borders Book, Barnes & Noble, public libraries and local booksellers today if they are laughing.

Amazon has gone on to not only decimate the book business but so many other businesses. So many empty spaces in malls today can be related back to Amazon’s prowess at bombing the supply chain with low prices.

Is this progress?

Electronics giant Best Buy would say NO.  Circuit   City  would say a resounding NO directly from the grave.  Amazon has have effectively eliminated many businesses and the people employed in those businesses. I would posit that they have potentially reduced GNP by pushing down prices, putting people out of work and reducing competition.   This is a multibillion operation with profits under 1%.   This is not progress to me.  I would prognosticate that the combined profits of the businesses they put out of business might be hirer that the measly three tenths of 1 % earned by Amazon.

Can there be a threat to Amazon now too?   Could there be a bigger fish out there that might make Jeff Bezos cry to his congressman?   Possibly….

There is a company in China called Alibaba own by a man named Mr. Ma.   He just turned down the Hong Kong Stock Exchange offer to take him public.  Instead, he has chosen to list on the NY Stock Exchange.
What is this company and what do they do?   They are a business that matches buyers and sellers. If you want to find a factory to make goods for you it is possible to search on Alibaba for a source.   Their volume is immense even before going public.  If you added Wal-Mart to Amazons volume you would still come up short compared to  Alibaba. And the interesting thing is that most Americans do not yet know they exist .

I know they exist because they promote many factories that are counterfeiting my industry’s products.

So what happens when the supplier that makes directly for Amazon or one of Amazon’s vendors finds it possible to sell directly to consumers?  What happens when  Alibaba goes public and has billions to spend on advertising ?  What happens when chains like Wal-Mart cry foul because now they can lose sales to these direct sellers and have to worry about them now in addition to Amazon?

Has anyone watched how Wal-Mart has had struggles lately meeting Wall Street sales and profit  expectations?  This is a new phenomenon for that firm, one that has old Sam spinning in his grave for sure.  I guarantee you that Sam Wal-Mart would be lambasting his congressmen if he were alive today and  demanding that something be done to protect him.

So, Amazon Pearl Harbored the retail industries we discussed above and now there are clouds on the horizon they may to deal with.  What goes around comes around.  If Amazon suddenly saw its paper-thin black margins turn to red, what do you think would happen to Wall Street?

Anyone smell meltdown potential on continued bad retail news, especially if Amazon had to close some of the mega warehouses instead of shouting  that a new one erected?  They have very little margin for error.

I hope big firms will have better luck than we little guys have with elected officials.  Maybe that’s what’s needed to get our law makers to follow my definition of the role of government — to protect and to help society enjoy a rising standard of living—-and most importantly to adapt to change. Maybe one of the big boys needs to scream bloody murder about unfair competition and theft.     Government adjusts and changes?  Sounds like an oxymoron, no? I wait each day for more attention to these problems.

If the big guys get no more help than I did I can always teach them what ABPIA had to do on our own…stand up for ourselves and fight.  Remember what the real Pearl Harbor did in this country. It awakened a sleeping giant.   Maybe that just has to happen again .   Let’s pray we react sooner this time.

Your thoughts are welcome.”

Steve Lang
CEO Mon Cheri, LLC, President ABPIA
1018 Whitehead Road Extension
Trenton, NJ 08638
609 406 0138

 

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