Difficult to achieve traceability and anti-counterfeiting
Products today can be easily counterfeited, and the methods adopted for anti-counterfeiting are far from being effective, thus making it impossible for consumers to identify the authentic ones from the fake.
Production Management Issues
It is hard for brands to manage production quantity since production is done by third-party suppliers, and they might have to sustain the losses caused by overproduction.
Refunding, Returning and Exchanging Risks
It is difficult for sellers to check the products’ authenticity when customers return or exchange the products, and they may receive counterfeit goods upon return.
Channel Management Issues
It’s impossible for brand holders to monitor all the channels, thereby leaving room for channel conflict and the proliferation of counterfeit goods.
Financial Services Issues
When a product is sold, there is no effective way to keep track of its usage and maintenance, limiting options for financial service providers such as when they provide mortgage or insurance services for high-value goods.