Someone's copying my products

Then emails me to tell me he's not

[HRoth]

I got an email the other day from someone who said that he wanted me to know he was not copying my products. He said he respected me and didn't want hostile relations between us, since we are, in his words, "direct competitors." I didn't know who he was, but when I went to look at his site, it did seem as though he had actually copied a number of my original products. His name sounded familiar, so I checked, and about a year ago he bought some things from me; he now has products identical to those. All the things he sells that are copies of mine are being sold for at least 25% less than my prices (which I am actually in the process of raising, also). He just started taking credit cards in May, and I have been in business with my shop for 7 years, so I don't know how much we are "direct competitors."

Thing is, it made me kind of nervous what he was doing. I've been focusing on keeping my products unique and moving more and more to high quality, carving out a very distinct niche in my neck of the woods, since the vast majority of sites catering to my customers focus on being cheap and they all sell the same stuff bought from franchises. I have a blog, which actually functions as one of the highest links to my site, where I discuss among other things the new products I am making as I make them. Customers like to chime in with things they would like to see, and it's fun to interact with them there. Now I wonder if I should keep doing that. This guy was also on a couple lists I've been on that were associated with the business and where folks, including me, discussed things they were making and asked for tips. I've also always listed the ingredients in my products in order to show customers that they are all natural, so that people with allergies can be alerted, and because it gives more opportunity for ad copy to discuss each one. Now I wonder whether I should keep doing that.

I like the way I have been doing things and don't want to change it because someone is copying. But it has happened once before that someone copied my product selection, undercut all my prices by 20%, used my page text to react to in their page text (I didn't know what I was talking about, etc.), had a LOT of money to spend on stock and on ads, and now they are quite big. This guy hasn't quit his day job yet, but his site and his products are beautifully designed. You can tell he has a lot of capital to start out with, which I did not and don't have now. So I feel concerned.

Should I quit talking about making things on my blog and quit listing the ingredients? Or just ignore this guy? I haven't even responded to his email yet.

[sniffer]

It would be nice to be able to continue the way you are, but it sounds like the landscape in your market is changing. There's a lot of questions though...

Is there anything stopping a competitor from buying your product and reading the ingredients that way? It sounds like you may need to find another feature by which your product is different, and try to sell on that

Did you lose sales when the other 'big boy' moved in?

[HRoth]

Yes, I did lose sales, and I could see that the main problem was that they had a lot more working capital than I did, so they could afford to buy very large volumes of materials that they could resell for less, and they had a lot of money for ads, whereas I had to rely on search engines I decided to try to find a way to get around the lack of capital. What I started doing, and what has been successful, was to make things that are original or unique. That is why it is troubling to me to see this person coming along now copying what I developed as a response to someone else's copying. Or maybe I'm worrying too much?

A competitor doesn't have to buy my product to read the ingredients. They can read the ingredients on the web pages. I've been told by folks who make somewhat similar products that listing the ingredients is not risky, since the proportions are not listed and since the the ingredients vary depending on the source and time of year they are acquired. But now I am wondering how true that is. I'm not required by law to list the ingredients; however, as a consumer I have always preferred to see the ingredients listed on similar products. It reassures me that there is no fakery going on. But maybe most customers don't care about that. I don't know.

I would like to know how others have responded to similar situations. Not the email, but the copying.

[sniffer]

Do you have much repeat business/customers? You could start to reward them for being loyal (if you arent already), behind the scenes. Keep the customers who aren't price shoppers happy, and work out a way to differentiate your product for those who are.

[Marshall]

Are these items custom made by you and therefore Copyrighted? If so, just because this individual bought your stuff does not entitle him to duplicate it, unless he is licensed to do so by you. In short, try taking the Copyright Infringement approach. Lawsuits tend to make people nervous.

Marshall

[edited by: Marshall at 3:38 pm (utc) on June 29, 2007]

[webwoman]

You could promote your products as "The Original...". A friend of mine had a similar situation, and she made a point of letting people know that hers was the original widget, and all her widgets included a certificate of authenticity (the cert was applicable to her field). It gave people a feeling of confidence and she avoided getting into a price war with the forger and was able to recover lost traffic and eventually even raise her prices :)

In any case, I wouldn't list the ingredients on the webpages.

[HRoth]

That is a good idea about "The Original." I am going to do that.

No way am I getting into a price war. Actually, I just got a phone call from someone influential in my field, and he said my prices are too low.

[londrum]

I've been told by folks who make somewhat similar products that listing the ingredients is not risky, since the proportions are not listed and since the the ingredients vary depending on the source and time of year they are acquired. But now I am wondering how true that is... however, as a consumer I have always preferred to see the ingredients listed on similar products. It reassures me that there is no fakery going on.

i think you should worry about your actual customers rather than this one other guy. your customers are way more important.
if you yourself like to see all of the ingredients listed then you can be pretty sure that some other people do to. so why risk losing a sale?

[HRoth]

Marshall, you asked about copyright. My formulae might be copyrightable, but he is mostly copying the names and some of the ingredients, plus copying product concepts. I am pretty sure he has not broken any laws.

I have thought about listing most of the ingredients and leaving some out that are not primary but still make the thing what it is. This is what many people in the associated field do. I have already changed the text on some of the pages so that instead of reading "This product is made from x, y, and z," it says, "This product is made from x and y, highlighted by other carefully selected natural widget ingredients."

I have also decided to respond to the emailer by telling him about the book "Blue Ocean Strategy," which describes how to create a niche for yourself where you don't have competition.

[ken_b]

I'd suggest getting a legal opinion before responding at all.

[RailMan]

sounds like trademark infringement
(copyright is generally for written work - any products / designs / names etc which you have created and have built your reputation on etc are trademarks (marks of your trade))

i've taken action against a couple of companies for trademark infringement - the following is the "basics" of it - its not legal advice - would suggest you go see a lawyer and get proper legal advice

by copying you, he is possibly "infringing on your trademarks" - he could be "passing off" his goods etc as being the same as yours and making money from your name / reputation / ideas etc

(trademarks do NOT need to be registered - if they are, it is PROOF that you came up with the designs / concepts / names etc that you have registered - without registering the trademarks, it is still possible to prove the designs / concepts / names are are your invention)

it sounds like what he's done is challenge you
if you do nothing, he assumes "all is ok" - and that would be his defence if a court case ever arose out of it - he'll say "well i did contact the other company and they didn't do anything about it so i don't see what the problem is" and the judge will likely agree

what you can do though is get a lawyer to ask them to stop infringing on your trademarks with immediate effect ("take down" or "cease and desist" etc) - your lawyer will state that your products / names / etc are your trademarks (whether or not they are *registered* trademarks is irrelevant) - your lawyer can also claim damages for "passing off"

if the other party ignores that, you can take out an injunction - court will insist that the other party stops selling / stops using your names / designs etc with immediate effect - and the penalties can be fairly severe

it can cost a lot of money to take legal action - weigh up the pros and cons - is this other company making a lot of money from your work? are they likely to make more? how much will they make over the years? will they drive you out of business?

the question it comes down to is "have you got the balls to deal with this?"

[HRoth]

I believe I have dealt with it in a good way. I decided that to react to what he was doing with threats would be to puff him up in his own estimation and give him more motivation to continue to copy me. Up to this point he has obviously felt guilty. I think that if I had reacted angrily, he would then feel cleansed of his guilt and feel free to go at copying whole hog.

So I responded to his email by telling him about the book "Blue Ocean Strategy," which is concerned with creating one's own niche so as not to have to engage in competition at all. I told him I'd been in this business for seven years and that I had determined long ago that I would create the business I wanted to have, that I was not interested in selling what others have or in a race to the bottom. I wrote that if others have decided to copy my products that I do not think they have a very viable business plan. I wished him the best of luck. I tried not to be patronizing.

Now the ball is in his court. He can decide to be responsible and be original, or he can continue down the path to cut-rate perdition. I do believe he will choose the former. If he goes whole hog in copying, I will consider a different response. I don't think it will involve lawyers, though. I think it will involve talking to people I know in my niche.

[edited by: HRoth at 9:17 pm (utc) on July 1, 2007]

[dpd1]

I think you were nicer to him than he deserves... Sounds like he knows exactly what he's doing and it's no accident. As others mentioned, I would talk to a lawyer. Collect all the info you have as far as him buying products from you before he did this. That is a very good indication of his intent right there. It sounds like he contacted you because he wanted to head you off at the pass and feel you out as far as what you will do, if anything. It's a shame people can't come up with their own ideas, but that's life. See what the lawyer says first, but I too would consider putting info on the site that subtly hints you're the original creator of these products... "Often imitated, but never improved" or something like that. I wouldn't be bitter about it in anything you say, but just something subtle. I wouldn't threaten him directly, but if it was me, I would definitely let him know that we are NOT friends, and he ought not push me much further... Then drop it. Don't get in a Pi$%ing contest... Just make it clear you're not going to be a pushover, then drop it. I would also refrain from putting out info that makes it too easy to steal ideas. They're your ideas and you should be proud of them... There's nothing wrong with protecting them.

Dave

[HRoth]

I think he pretty much knows we are not buds, although I have not been nasty at all. I haven't figured out a way to phrase the "my stuff is the original stuff" yet. I think he will make some money with his cheap knockoffs, but the fact of the matter is that no one out there can make these particular widgets as well as I can, and when people try them, they find that out. This past week I accidentally sent a somewhat large order for these widgets to the same customer twice. She called me to let me know about it and to say that a friend was there when they arrived, the friend tried them, and she bought them all. "You have a gift for making these widgets." Things like this really boost a person's confidence. Of course, so does someone copying, really.

I think I will be okay, but it has caused me to focus much more seriously on the direction of my business and the kind of ads that I should do now.

Thanks, folks, for the feedback.

[BananaFish]

He emailed you to point out that he's not copying your products? That's general proof that he is doing exactly that. If the guy is copying your text, original names, images or other copyrighted material you should inform him that he is infringing upon your copyrighted material. If he does not respond or comply with request to remove the plagiarized content, you can file a DMCA complaint with the major search engines and his web hosting company or ISP.

I've had to deal with a couple sites stealing my copy, and all it took was one email and the infringing material was removed.

[RailMan]

the fact of the matter is that no one out there can make these particular widgets as well as I can, and when people try them, they find that out

guess you haven't figured out yet that people can't tell the quality of goods until they've actually bought them? and that people will see yours and his as exactly the same, except his are much cheaper? and therefore they won't buy your goods, they'll buy his?

[HRoth]

Everyone doesn't want cheap. I noticed with my own shopping that I will pay more for a widget if I get the feeling that the vendor has a lot of expertise with it. This is especially true with a non-standardized widget, which these are. So if I go to a site that has a widget for $3.50 and maybe one line of info about it next to the "click to buy" button, and go to another site where the widget is $5.00 but there is a goodly paragraph of info about the widget that shows the seller knows that widget, I will buy it for $5.00, because the likelihood is that I will get a better widget and that if I have a problem with it, the seller will deal with it. They've already shown they're willing to invest time in the item.

I realized a while ago that I would have to raise my prices on these widgets on account of the cost of quality ingredients and the time invested in developing the products. I was fearful about doing this, because there is a tradition that this type of widget be very cheap in my niche; it is usually priced at around $3.99 or even less. But this type of widget is also traditionally made of cheap and even toxic ingredients made in some sweat shop. I am asking $12.50 for these widgets and am getting that price, because I have focused on delineating why my product is unlike the great mass of cheap crap out there. This particular line of my widgets has grown so that now its sales are second to my most popular group of widgets. I expect the sales of this line of widgets to overtake all my other types of widgets and that my shop will eventually focus exclusively on this type of widget. I will be raising the price of the widget even more as I go along, even though my "direct competitor" is asking $5.00 for his copy widgets. I am learning that there is a base of customers out there who do not want cheap, who are willing to pay more--a lot more--and who want to hear about how the widget is developed because it demonstrates expertise. I have gotten this feedback from customers repeatedly--"I can tell you know what you are doing."

I provide copious info about how these widgets are developed and tips for how to use them. His widgets are sold with a partial ingredient list. He can't put much more because he doesn't know what he's doing. That's why he has to copy in the first place. Now, I suppose he could try to copy my copy, but in my experience, 99% of the people in the world are such poor writers that they cannot copy ad text without either doing it verbatim or screwing it all up. So I don't think that's going to do him any good even if he attempts it. But I don't think he will bother to add to his copy text, because pretty much none of the other sellers of this class of widget have even the ingredient list, much less a bunch of info. Most of them just have the name and price listed because they are just reselling something they bought elsewhere and they themselves have no idea what's in it. I have bet on the idea that customers want more from their online shopping experience than "click here" and cheap. And that does seem to be the case. Not for all customers and maybe not even for most, but for the customers I am after, it is.

The one thing I will do in response to his site is to make my site more slick-looking. I have been wanting to do this anyhow. I started by taking all new photos of my widgets.

[RailMan]

yeah sure you'll still make sales but he'll make more
and when he revamps his site, he'll make even more
you've given him the green light to copy you
you've made a lot of work for yourself over a long period of time by letting him get away with it

[HRoth]

No, I didn't give him the green light to copy me. I think I did what I should have. I've explained why.

And the more I learn about him, the less worried I am. I noticed the other day that he had expanded the ingredient list of one widget to include a deadly poison. I don't think he actually added the poison. He just put it on there because he thought it sounded cool, but for him to lie about his ingredients and to reveal that he does not to know that this thing is a poison, well, he is not going to impress a lot of customers that way, no matter how low his prices are.

I have seen an increase in the sales of those widgets since I took new and more professional photos of them. I don't know if the increased sales are because of the photos, but the traffic is the same and I haven't changed anything else.

[edited by: HRoth at 12:08 am (utc) on July 23, 2007]