Avoiding Counterfeit Electronic Parts in the Age of International eCommerce

For several years now, popular media and trade journals have reported the sale of counterfeit goods on internet purchasing platforms, such as virtual shopping malls. A simple internet search for electronic parts yields a flood of eCommerce websites offering an endless variety of products. When using eCommerce websites that are not sponsored by the original manufacturer or its authorized suppliers, a buyer can be vulnerable to counterfeits. According to industry subject matter experts, consumers are most likely to encounter counterfeits through virtual shopping malls that allow third parties to list their own goods.[1]

In 2011, the US Senate Committee on Armed Services asked the Government Accountability Office (GAO) to investigate and report on the availability of counterfeit parts through internet platforms commonly used to buy hard-to-find military grade electronic parts, including parts used in weapon systems. The GAO found suspect counterfeit electronic parts acquired through internet purchasing platforms, including bogus parts with part numbers that are not associated with any authentic parts. According to GAO, none of the parts it obtained from through these internet platforms were legitimate.[2]

eCommerce websites sponsored by original manufacturers or authorized suppliers are the safest internet platforms for seeking out authentic products. ECIAauthorized.com, for example, is sponsored by the Electronic Components Industry Association (ECIA) whose membership includes an extensive list of authorized distributors. According to the ECIA, ECIAauthorized.com is the “most complete authorized electronics inventory search available on the Internet”.

Many other eCommerce websites provide a means to search available inventory, but this inventory tends be associated with third parties that are not authorized suppliers. These other websites are operated by large and small eCommerce businesses throughout the world. One example of a very large eCommerce business is Alibaba Group which made IPO history last week. Though Alibaba Group has taken steps to rid its virtual shopping malls of counterfeit goods, industry experts and company executives claim that Alibaba Group must do more to crack down on unscrupulous sellers.[3]

Here is an example of search results for an electronic part on ECIAauthorized.com and on Alibaba.com. ….

A search of ECIAauthorized.com for ‘26LS32’ in late August revealed that the quantity in stock across all authorized suppliers totaled 293,466 for all variations of the device. The lead time to obtain further supply was reported to be six (6) weeks.

A search of Alibaba.com, also in late August, revealed one supplier with the capacity to supply 500,000 per day of one specific variant of the ‘26LS32’. The search results also revealed two other suppliers each with the capacity to supply 100,000 per day of the same specific variant of the ‘26LS32′. For a defense contractor or DoD procurement organization, this capacity would represent an immediate, unlimited supply. The suppliers that posted these offerings on Alibaba.com are not authorized suppliers. One of these suppliers touts “quality produce”. Until now, I hadn’t thought of electronic parts as produce. Given this immediate supply and unlimited capacity, however, these parts must grow on trees. Insufficient information was available to judge with certainty whether the parts offered were counterfeit or reverse engineered look-alikes (‘clones’). Given that the total inventory available through authorized distribution pales in comparison to the capacity claims by suppliers on Alibaba.com, I am skeptical to say the least.

The safest internet platforms for seeking out authentic electronic parts are those sponsored by original manufacturers or authorized suppliers. Though other eCommerce websites also offer electronic parts, consumers are most likely to encounter counterfeits through virtual shopping malls, particularly those that allow third parties to list their own goods.

Henry Livingston


[1] Can Alibaba knock out knockoffs? — CNBC (18 Sep 2014)
http://www.cnbc.com/id/102010154

[2] “DOD Supply Chain: Suspect Counterfeit Electronic Parts Can Be Found on Internet Purchasing Platforms“, GAO-12-375, U.S. Government Accountability Office, Feb 2012 (http://gao.gov/products/GAO-12-375)

[3] Alibaba has a major counterfeit problem — CNN Money (12 Sep 2014)
(http://money.cnn.com/2014/09/11/technology/alibaba-counterfeit-ipo/)

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