Cheap fakes or free marketing? Why luxury brands profit of counterfeit goods

Historically there were only two reasons for me to visit Markham. When I worked as a Specialist at the Apple Store in Markville Mall there, and I had to travel to York University during the summer to attend class for my alleged bird course “Contemporary Black Urban Music” often during rush hour so it was something I tried to avoid (Probably why I got a C+). The other time I would come to Markham would be when I wanted to visit Pacific Mall, whose reputation precedes it. To say the least, everyone knows what Pacific Mall is famous for but the line between high fashion and counterfeit goods is thinner than a leather stitch.

My introduction to the world of business didn’t come from a textbook; it came from working in my dads leather factory. After a career in engineering, my father purchased a business that primarily operates as a manufacturer and whole sale of leather goods, when he purchased an existing leather business that had been established in the 1970s called Canadian Leather Craft. He later renamed the company to Canadian Leather Creations (located in Richmond Hill in the Big Daddys Plaza). If you want a discount, call me while you are there. He maintains so product lines that I cannot keep track, from hats, to jackets, vests, moccasins, belts, wallets, purses, keychains, shawls, briefcases, backpacks (bagpacks as he used to call them), and we often sold them together at gift shows such as the Canadian National Exhibit (CNE) and the Royal Winter Fair (the “Royal”). For this limited discussion, he made high-quality, genuine leather purses—the kind built to last a lifetime. I spent entire summers making purses from a full cowhide skin by using a compressor or “clicker” to stamp metal dies into desired shapes which I would provide to the leather stitcher or “seamster”, who would stitch it up, after which I would trim the excess string, tag it, and bag it. I am told the skill of being able to stitch leather is not something taught to apprentices like they used to.

The leather trade is rarely a straight line. While my father built his leather company, my uncle operated a stall selling purses at “Dr. Flea”,  a commonly known GTA flea market (my other uncle sold shawarmas at the same flea market but that is not the focus of this paper, neither is the fact that Dr. Flea was not a real doctor). The crazy thing to me, and was probably a product of intergenerational trauma, my uncle didn’t carry my father’s goods. There could have been a purse EMPIRE if they had coordinated properly. Instead, my uncles curated a various assortment of “under-the-table” inventory including Louis Vuitton, Christian Dior, Burberry, Chanel, and Gucci. I wish I had been older and wiser to be the middle man, and my older brother and sister were not oriented toward the family business.

After gaining my uncles trust by spending time at his stall, playing Blackjack and Poker on a little machine he had while learning the tricks of the trade, he gave me a number of bags on consignment to sell at school. Consignment is when the supplier gives you product for free, and you provide the funds after you sold the items. I had an assortment of Louis Vuitton purses, Chanel wallets, and Gucci bags. I showed them off the first day to my classmates in grade 7, and the following day I was sold out. One of the biggest mistakes I made was running off on the plug aka my uncle and not giving my uncle the money for the cost of the purses and ruining the good thing we had going, a valuable lesson was ultimately learned as I could have been a big time purveyor of luxury goods in hindsight.

My uncle didn’t show his “special inventory” to just anyone. He developed an intuition for identifying high-end clients; those who wanted the status but also wanted to feel like they struck a good bargain in the market. By vetting his clientele, he avoided the fines that come with the counterfeit trade. This is not unlike the business practices at Pacific Mall. A potential $5,000 fine was not enough of a deterrent to stop vendors from selling counterfeit goods outright. He knew that in places like Markham, the assumption of authenticity is a powerful tool. If you drive a luxury vehicle and live in an affluent postal code, the world assumes your bag is real. In Markham, a high-quality “super-fake” provides the same social capital as the original, at a fraction of the cost.

When is a Product Truly “Finished”?

This historical context is provided in light of intellectual property discussions at the forefront of the luxury market, and raises an important technical and philosophical question that we often encounter in commercial law: At what point does a product acquire its identity?

In international trade, the “Country of Origin” isn’t always as transparent as the label suggests. Is a product finished when the logo is embossed, or when the structure is “substantially complete”? Many luxury items are manufactured in high-volume facilities in Asia, only to receive their trademark or “finishing touches” in Europe to legally earn the “Made in Italy” or “Made in France” accreditation according to a video I saw on TikTok. The point of origin of raw materials is not legally to be given on most products once they have been substantially transformed into new products , however some luxury brands may like to advertise all the ingredients or materials that their bags are made of as a matter of pride or function, or even excess, for example snake skin, sheep skin, cow hide, etc. This leads us to a seminal question: Does the source of the raw hide dictate the value, or method of production, or the logo?

Counterfeits as “Free Advertising”

There is a school of thought in intellectual property law: counterfeit goods may actually act as unintentional marketing. By saturating the streets with a brand’s aesthetic, counterfeits reinforce that brand’s dominance as a status symbol.

Perhaps this is why some “counterfeit rackets” aren’t always pursued with the expected vigor. In a capitalist economy, the fake sustains the “hype,” which in turn allows luxury houses to justify astronomical prices for the “authentic” version.

Why This Matters for Your Business

Whether you are navigating compliance, regulatory, or commercial issues, including those of complex manufacturing products, Barbarian Law understands the “origin story” of your product matters. Logos and labels are not as important as ethically sourced labour, sustainable supply chains, and healthy profit margins that make up a brand.

In the Greater Toronto Area’s (GTA) competitive market—from Pacific or Markville Mall in Markham to Yorkville—knowing how to protect your craftsmanship is the difference between building a legacy and getting your intellectual property or purses stolen.

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