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Every once in a while, people ask such questions (either directly to me or in the community). Is FT selling authentic products or fake (clone) products?
My answer is, if it says Authentic, it is Authentic for sure.
Just to explain, FT's business model is entirely based on volume sales. Let's say, a manufacturer is selling a mod .. These are his prices for different volumes ..
100 mods @ $50 each
500 mods @ $45 each
1,000 mods @ $40 each
5,000 mods @ $35 each
10,000 mods @ $30 each
15,000 mods @ $25 each
The problem is, that bigger volume buyers are less and lower volume buyers are more. A manufacturer would like to cash on both ends and would like to make bigger volume sales as well as smaller volume sales. Of course, they wouldn't like to turn anyone down.
But the problem is, FT would buy the 15k volume and then add their profits, shipping prices, etc based on a formula and sell each piece for $35 (or whatever price FT thinks will be good to beat the competition).
Small buyers get irritated because they bought each mod at $50 and then can NEVER compete with FT or even with some other volume buyers. It's a loss for them, a huge loss.
So they complain to the manufacturer that others are selling the stuff for way lesser price and there is no profit for them. Small buyers begin turning away from the manufacturer. And, the manufacturers feels bad since thousands of their small volume buyers turn away and that is actually a HUGE loss for them. Small buyers are the one that make them the best profits because there may be literally thousands of small volume buyers.
So, the manufacturer decides, let's go ahead and fix a "minimum advertised price" (MAP) so that nobody sells below that price. Let's say, the manufacturer decides, the MAP would be $60 (A LOSS TO THE END USER or the CONSUMER). But FT does NOT want to stick to the MAP because, their business model is volume sales and keeping such a high price wouldn't really help them meet the volume sales they wish to make.
So, FT keeps doing their own thing and do not honor manufacturer's MAP. Manufacturers get pissed off and stop selling to FT to "punish FT" or to keep their small buyers happy. But FT is FT and wouldn't step back. So what it does, it employs some mediators (could be just one or more mediators) who buy from the manufacturer and sell that stuff to FT.
The margins are controlled to ensure that FT can sell below MAP and make volume sales. But then the manufacturer has a list of all the "authenticity codes" and can always trace who bought which stock. So just by the authenticity code, they can trace who was that mediator who bought from them and sold to FT. If they can successfully trace, the mediator will not get the stocks in future. This is the reason why FT removes the authenticity scratch codes. FT does that to keep their mediators safe and secure for future purchases from the manufacturer.
So now if you ask that manufacturer, he is just going to say bad stuff about FT because FT is killing their profits. Also, removing the scratch codes does NOT mean that you got a fake. You still got an authentic at a much lower price. Cheer up, POWER TO THE CONSUMER!!
My answer is, if it says Authentic, it is Authentic for sure.
Just to explain, FT's business model is entirely based on volume sales. Let's say, a manufacturer is selling a mod .. These are his prices for different volumes ..
100 mods @ $50 each
500 mods @ $45 each
1,000 mods @ $40 each
5,000 mods @ $35 each
10,000 mods @ $30 each
15,000 mods @ $25 each
The problem is, that bigger volume buyers are less and lower volume buyers are more. A manufacturer would like to cash on both ends and would like to make bigger volume sales as well as smaller volume sales. Of course, they wouldn't like to turn anyone down.
But the problem is, FT would buy the 15k volume and then add their profits, shipping prices, etc based on a formula and sell each piece for $35 (or whatever price FT thinks will be good to beat the competition).
Small buyers get irritated because they bought each mod at $50 and then can NEVER compete with FT or even with some other volume buyers. It's a loss for them, a huge loss.
So they complain to the manufacturer that others are selling the stuff for way lesser price and there is no profit for them. Small buyers begin turning away from the manufacturer. And, the manufacturers feels bad since thousands of their small volume buyers turn away and that is actually a HUGE loss for them. Small buyers are the one that make them the best profits because there may be literally thousands of small volume buyers.
So, the manufacturer decides, let's go ahead and fix a "minimum advertised price" (MAP) so that nobody sells below that price. Let's say, the manufacturer decides, the MAP would be $60 (A LOSS TO THE END USER or the CONSUMER). But FT does NOT want to stick to the MAP because, their business model is volume sales and keeping such a high price wouldn't really help them meet the volume sales they wish to make.
So, FT keeps doing their own thing and do not honor manufacturer's MAP. Manufacturers get pissed off and stop selling to FT to "punish FT" or to keep their small buyers happy. But FT is FT and wouldn't step back. So what it does, it employs some mediators (could be just one or more mediators) who buy from the manufacturer and sell that stuff to FT.
The margins are controlled to ensure that FT can sell below MAP and make volume sales. But then the manufacturer has a list of all the "authenticity codes" and can always trace who bought which stock. So just by the authenticity code, they can trace who was that mediator who bought from them and sold to FT. If they can successfully trace, the mediator will not get the stocks in future. This is the reason why FT removes the authenticity scratch codes. FT does that to keep their mediators safe and secure for future purchases from the manufacturer.
So now if you ask that manufacturer, he is just going to say bad stuff about FT because FT is killing their profits. Also, removing the scratch codes does NOT mean that you got a fake. You still got an authentic at a much lower price. Cheer up, POWER TO THE CONSUMER!!
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