Once a brand gains popularity, the market sees lots of similar products that leverage the original. In a competitive market it is highly likely that the very distributor obtaining the original goods from the supplier is the one sourcing similar or fake goods, and leveraging the supplier's brand while cutting into his market share. This counterfeiting of goods holds true for a host of industries from electronics, to alcohol, pharmaceuticals, etc.
Counterfeiting of goods becomes possible, as the information flow between two points is broken in a supply chain that is disconnected, allowing the next node to add, delete, or edit, what once moves into the physical flow. The eXchange promises authenticity as it enable traceability across the supply chain, it makes sure that only the principal brings the product onto the eXchange and hence controls the flow therein, making certain that trade partners receive only genuine products.
The rule also applies to trade or transfer of inventory, where the authentic source of inventory is always the principal; this creates a barrier against infiltration as it eliminates any chance of the inventory being handled by unknown sources, besides being able to track goods from the original source down to the end customer.