accused of selling fake item

If someone has communicated a false statement of fact about you which is damaging your business, you may have a claim against that person for defamation (slander is oral defamation; libel is written defamation.)  While it will probably be very difficult for you to prove any money damages, you probably don't have to in this instance, because this defamatory statement impugns your integrity and your work performance, and thus would probably be considered defamation per se (as opposed to defamation per quod) and would not require proof of actual monetary damages.  Moreover, even if you are not awarded any money, you may be able to get an injunction compelling the person to publish a retraction.  However, you should be aware that a small claims court may not have jurisdiction to award equitable relief such as an injunciton, and you may have to sue in a court of general jurisdiction.