ARTICLE

Protecting Your Business From Counterfeit Electrical Parts

A Q&A with Wesco and Eaton



The electrical industry has been grappling with gray market transactions and counterfeit components for decades, but recent market conditions have exacerbated the issue. The exploding demand for electrical components used in smart devices, automation equipment, electric vehicles and more, along with lingering post-pandemic supply chain issues, has resulted in a flood of counterfeit products entering the market. In 2023, U.S. Customs and Border Protection seized an estimated $2.7 billion in counterfeit goods.1 Of the total products seized, 14% fell into the electronics category.

Why does this matter, and what are manufacturers and distributors doing about it? Tom Grace, Brand Protection Manager at Eaton, and Mike Abraham, Director of Category Management at Wesco, answer the most commonly asked questions about the gray market and counterfeit electrical products.

We often hear the terms “gray market” and “counterfeit” used together. What is the gray market? What are counterfeit products?

The terms gray market and counterfeit are not interchangeable. Gray market refers to the trade/procurement of electrical products through distribution channels that are not authorized by the original manufacturer. Counterfeit electrical products are intended to be passed off as new and genuine but are not made by the original manufacturer or have been altered from their original specifications with fraudulent marks or labeling. (Tom Grace, Eaton)

It’s important to clarify that counterfeit products are sold on the gray market, but not everything that's sold on the gray market is counterfeit. Many resellers don’t even know they are participating in the gray market.

What you're really doing when you buy from the gray market is increasing the odds of procuring a counterfeit product because you don't know the security of the supply chain you're buying from. (Mike Abraham, Wesco)

How can you identify and avoid counterfeits?   

Identifying counterfeit products is difficult. Counterfeit manufacturing techniques, such as molding, assembly, printing, and other processes have improved dramatically. This makes obvious variations, such as misspellings, even less likely to occur.

We can't all be product experts, and manufacturers have thousands of products that they offer. When you're purchasing a product, you need to know if the reseller is authorized to sell that manufacturer’s line of a particular product. Using only authorized distributors will mitigate the risk of purchasing counterfeit products. (Tom Grace, Eaton)

Buyers must perform their due diligence when sourcing a product to make sure they’re buying from an authorized reseller. For a reseller to be authorized, they must have a legal agreement with that manufacturer permitting them to distribute the product. To add another layer of complexity, some resellers may be authorized to sell one manufacturer’s product line, but not another. That’s why it’s so important to verify EVERY purchase. (Mike Abraham, Wesco)

Why are counterfeit electrical components dangerous?

The electrical products that we consume in the United States are governed by the National Electrical Code and must meet certain standards. Counterfeit parts are made purely to make money. They are not manufactured to meet the required safety, quality, or performance standards of the genuine product, nor do they go through any type of certification process. (Tom Grace, Eaton)

When you use a counterfeit product, you’re opening your company up to risk and potential liability. You’re trusting that the product will serve its intended function, whether that’s to trip at a certain level or protect to a certain level. A counterfeit product hasn’t been tested to meet standards, and if something goes wrong, nobody’s going to stand behind it. This increases the likelihood of equipment failure or damage, fire, or in extreme cases, worker injury or death. (Mike Abraham, Wesco)

How are Wesco and Eaton combatting this ongoing problem?

Eaton continues to make the investments needed to protect our intellectual property. This includes techniques and tools to individually identify our products, such as serial numbers, QR codes, the Eaton Asset Manager app, and the circuit breaker authentication tool. The goal is to make it easy for customers to verify their products, regardless of where or who they purchased them from. (Tom Grace, Eaton)

Wesco has policies and procedures around procuring products from authorized channels. We designed training programs for our sales teams and key supply chain stakeholders to educate them on our expectations around authorized resellers and the importance of ensuring all procured products are authentic. We’ve also implemented certain supply chain controls to further secure the supply chain integrity for Wesco and our valued customers. (Mike Abraham, Wesco)

View Wesco’s Anti-Counterfeiting Policy




Eaton and Wesco’s partnership ensures that our customers have the expertise and tools they need to use power safely and more efficiently.


Mike Abraham

ABOUT THE AUTHOR

Mike Abraham
Director of Category Management, Wesco
Mike is responsible for supporting the development of strategy, tools, reporting, and processes to support Wesco’s Global Category Management team and drive the growth of our preferred supplier partners. During his 15+ years at Wesco, he has held roles in power distribution, electrical and lighting category management, purchasing management, and lean facilitation.

Tom Grace

ABOUT THE AUTHOR

Tom Grace
Manager of Brand Protection, Eaton
Tom Grace has 28 years of experience in Eaton’s electrical business and has spent the past 18 years focused on the impact of counterfeiting. He manages global coordination for brand protection and continues to promote counterfeit awareness, product enhancement, and policy enforcement throughout Eaton’s electrical sectors in the Americas, EMEA, and APAC.


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