Genuine Apple Product from China: Good Luck with That

Just got my third email this week from someone who bought tens of thousands of dollars worth of “iPhones” from someone in China only to receive rank fakes. All three emailers were so blinded by the idea of buying iPhones at ridiculously low prices that they did nothing to make sure the sellers were legitimate, which of course they were not. There is just no way to get REAL Apple products from China for any less than you can get those products from the United States or Europe or Japan or Australia or Canada or Latin America, or pretty much anywhere.

There just isn’t. If someone is offering to sell you an Apple product, be it an iPhone, iPad, MacBook Air, or anything else, for way less than you can get it elsewhere, it virtually has to be a fake or else you will never get anything at all.

Get it through your head now: you are not going to get Apple products for less than anyone else does. It isn’t going to happen. It just isn’t.

It is easy to buy Apple products at retail in China. You can buy them from the ever increasing number of Apple stores (if you are willing to bust through the crowds) and there are also many authorized retailers throughout China. So yes, one can absolutely buy Apple products in China. What do the retailers charge for their Apple products? Pretty much what you would pay for those products elsewhere in the world. My law firm just bought a couple of MacBook Pros for our people in China and the prices on them were so close to what we would have had to pay in the United States we did not even bother trying to figure out if it would ever be cheaper to buy in one country for the other. We buy Apple products in China for our people in China and we buy Apple products in the United States for our people in the United States and we buy Apple products in Spain for our people in Spain. There’s no point in doing it any other way.

The fake Apple product problem stems from the strange belief that everything is cheaper in China. Or as the people who have gotten scammed on these things always tell me, “I thought I was getting the China price.” They read about the shockingly low pay of factory workers in China and then figure that the iPads in China must cost about one tenth of what they do in the U.S. or in Europe.

That’s some really bad economics. More importantly, it is just flat out wrong.

Yes, most Apple products are made in China. But so what? Apple’s margin on those products is not 1000%, which is pretty much what it would need to be if they were to sell them for the prices these three people paid for them. Also, what about arbitrage? Do you really think the market for iPads is so inefficient there could remain such an incredible price disparity for more than a few days? Trust me when I tell you that Apple would never allow such price disparities and that it does an amazing job overseeing its supplies and  pricing around the world. Is it possible some iPad factory somewhere in China is making iPads during a secret third shift and then selling them at a discount out the side door? That is possible, but I very much doubt it is happening and even if it were, that factory would not be selling its grey market iPads for much if anything below the real market price. Why would it not sell them for as much as it can get? Why would it reduce the price to shockingly low levels when doing so would only alert Apple to what it is up to?

This whole pricing thing reminds me of a counterfeiting case my firm handled a few years ago. We were retained by a large Eastern European tech company that was under a U.S. federal investigation for selling counterfeit products. Our client had purchased large amounts of a particular product from a Chinese supplier and a couple of our China lawyers were brought in to help with the China-side issues. Our client had paid $190 per product from the Chinese supplier and that was pretty much the same price it would have had to pay had the product not been a fake. Working with a criminal lawyer, we were able to convince the Justice Department attorneys that either our client had to have been incredibly stupid (which it clearly was not) or else it was telling the truth when it said it had no idea that it had bought counterfeits.

Why would anyone in their right mind pay full price for something they know to be counterfeit? The Feds dropped all charges.

If you find someone in China (online or otherwise) claiming to sell Apple (or other name brand products) at a price way lower than you can get those products outside China, do not fall for it. There has to be a catch. If it sounds too good to be true, it almost certainly is.

These product scammers are getting more sophisticated too. Their new trick is to assure you that they are for real by letting you pay only 30% or 40% upfront, making you think they would never put their final payment at risk by sending you anything less than the real thing. But this payment delay offer should mean nothing to you. 30% of anything is a lot of money to pay someone with no intention of providing you with anything in return and that’s quite a lot of money for someone who plans to provide you with a near worthless fake or nothing at all.

Oh, and if you do ever fall for one of these scams, please do not bother to contact my law firm because all we will tell you is the following:  (I am pulling this straight from the form email we use for these):

We get dozens of emails just like yours every year and though I wish I could tell you otherwise, there is probably nothing we can do for you. The odds are good that whoever sold you this fake product [failed to deliver your product] is long gone and even if we were able to find them, the odds are good that they have no real assets, or at least no assets subject to easy collection. You can pay us our regular hourly rates to chase whoever took your money, but you would most likely be better off spending that money to conduct the requisite due diligence and quality inspections the next time you buy anything from China. If you nonetheless still wish to have us try to get your money back, we would be happy to assist you.

And then there are the cases where the scammed buyer has to deal with customs accusing them (rightly, of course) of dealing in counterfeits.

What is their defense? I don’t know but I doubt it is that they thought they would be getting a real iPad for $50?

Bottom Line:
Don’t do it. Just don’t do it.