Let us assume that a manufacturer located in the U.S. develops a new consumer product with distinctive designs and application processes. The manufacturer places a copyright on the new product and begins to heavily advertise it in the U.S. and provides special training for U.S. dealers.
Sales go briskly and the manufacturer is very pleased.
After awhile, the ceramic product manufacturer begins to receive orders from foreign dealers for the new product. The manufacturer has not advertised the new product in foreign countries or trained dealers in other countries. In time, the ceramic product manufacturer learns that some U.S. based retailers are buying the new product from foreign dealers who ship the product back to the U.S. and sell it in their stores. These U.S. retailers end up buying the new product cheaper from the foreign dealers than they can from U.S. dealers supplied directly by the manufacturer. The retailers with foreign-based suppliers then sell the new ceramic product to consumers at lower prices than can retailers who obtain their supply from U.S. dealers.