The Blog for GW Pens

A peek at what we make

National Bankruptcy Day

As Holiday shoppers cross items off of their lists, many are unaware that there is legislation just around the corner to help give them confidence in making safe purchases. The Consumer Product Safety Commission has passed legislation known as the Consumer Product Safety Improvement Act (CPSIA).

The CPSIA aims to set what would be the most stringent guidelines worldwide for children’s products containing lead and phthalates (a chemical used in some vinyl products). Due to largely go into effect February 10th, 2009, anything at all intended for children ages 12 and under must meet these guidelines with certifications of doing so from a CPSC accredited laboratory.

As a father of two, this sounds great! In fact, I was so concerned about lead contamination in toys that I started my own company making unfinished wooden toys. But as a manufacturer who must comply with this law, I’ve learned it’s not as pretty a picture as it might seem.

For starters, anything, and I mean anything, intended for children 12 and under must be tested, at a cost of up to $4,000 with an average of around $500. The difficulty for most small and mid-sized companies, however, is that they will often be the ones responsible for having this testing done, for each item they make, per batch. Let’s take a closer look at what this means.

Why is the manufacturer responsible for testing? Because not everything made by a supplier is actually meant for children until a manufacturer takes that item and transforms it into something a kid would use. For example, let’s say you have a yarn supplier. They sell all sorts of yarn to manufacturers. One manufacturer might make adult items with this yarn, which exclude them from needing any testing under the CPSIA. But any manufacturers who turn that yarn into children’s items are now required to get that yarn tested. Each color, by the way.

So if the manufacturer makes an item that uses 3 colors of that yarn, there will be an average of $1500 in testing. If they make another item with 3 more colors, there’s another $1500. Once they use up the yarn in a particular batch, the next batch also needs to be tested.

Here’s another example. I have a children’s wooden biplane that I make. It uses Western Red Cedar, Red Oak, Poplar, Birch and Maple. Assuming I was able to make 1 plane from the same piece of each wood, I would be looking at $2,500 in testing. The unfinished plane sells for $75. Even if I took out the use of different woods wherever I could, I would still be left with Maple wheels, Birch dowels, 1 type of wood for the thick body and engine, and another type of wood for the wings. Wow- I am now down to only $2000 in testing.

So this leads a lot of people to wonder about suppliers. What if the suppliers offered their standard supplies, as well as pre-tested batches for manufacturers who will use them in children’s products? Well, the bigger question is why should they? They would just be incurring additional expenses that they really don’t need to take on. Whether they test their supplies or not, their sales will be there. And quite possibly, the cost of losing sales from children’s items manufacturers would be less than the cost to perform the testing. After all, not all of their children’s products manufacturers are unable to test, so they would only be losing their small and mid size customers.

And the scope of this legislation is just beyond words. For starters, every type of material must be tested- nothing is exempt. The garment industry is really getting slammed in this. They will be forced to test batches by SKU, rather than by Style Number. What’s the difference? Let’s say you go to buy a pair of jeans, and there’s the Wall o’ Jeans standing there, taller than you. You like a comfy style, so you go to the loose fit jeans and begin looking for your size.

Each one of those sizes is a separate SKU. Whereas the entire “loose fit” style is assigned the same style number. It is possible the different sizes are made from some of the same batches of fabric, but that doesn’t matter under the CPSIA. So where maybe 5 styles should be enough to be tested, the CPSIA requires each and every size within each style be tested. Oh yea- and the buttons and zippers, too.

This legislation is also retroactive for any pre-existing stock as of February 10th, 2009. That means no more selling your kids old stuff on eBay or Craigslist. No more donating them to charities. As far as I can tell, even Goodwill stores will not be able to sell these items, which is really a shame.

Now, there are some merchants who are preparing for this in a different way than through testing. Some merchants are ready to start labeling and advertising their children’s items are not intended for children 12 and under. Well sorry folks, but people from the CPSC office have specifically clarified that the 12 and under rule is at their interpretation- not your label. So if they determine something you sell is for children 12 and under, bingo- you are obligated to provide the certification number assigned to that item by the lab that tested the batch it came from.

And this now brings us to batches. How do you test batches among commodities? If you get a box of paperclips, there might be paperclips from 3 different manufacturers in 1 box. Testing one of those is no guarantee that the rest are compliant. There are other little nuances that are clearly not thought out, like saying each item must have the lab certification number affixed in some way. Something that is easier to do for large companies that use batches to track their inventory anyway, but I can tell you I buy wood in such low volume that about every other toy I make would be considered a separate batch.

I am fortunate, though. While I do have some minor business expenses, I am not in a position where I take loans out against my inventory, like some companies do. How will they get loans to continue on February 10th? What bank will be willing to give them money against product that the company can’t afford to test? One example I have seen was a school Science kit provider, who estimated to test 1 of each item they provide would cost them $20 Million off the bat, not including continued testing for new batches.

I understand what the government was trying to accomplish, but this isn’t something to just throw out there and figure out as you go along. My understanding is that each penalty carries a $100,000 felony charge. There is already an overseas German toy maker that has stated they will no longer be shipping toys to sell in the US. And the legislation doesn’t even go into effect for another 2+ months.

If you are like me- if you want to see SOME sort of legislation, but not one that makes businesses nationwide go bankrupt, please take a moment to write your Congressmen, sign this petition and join the group on Facebook:

To contact your Representative:

https://writerep.house.gov/writerep/welcome.shtml

To contact your Senator:

http://www.senate.gov/general/contact_information/senators_cfm.cfm

To contact Nancy Pelosi:

http://speaker.house.gov/contact/

To sign the online petition:

http://www.ipetitions.com/petition/economicimpactsofCPSIA/

To join the Facebook group:

http://www.facebook.com/home.php?#/group.php?gid=38306568596

And if you would like to read more on the CPSIA:

http://www.cpsc.gov/ABOUT/Cpsia/cpsia.html

Advertisements

17 comments on “National Bankruptcy Day

  1. Kristen
    December 5, 2008

    A fabulous explanation. I’ll be joining the ranks of petition signers. Let’s hope our efforts pay off for us, so that all small businesses that pertain to childrens products aren’t shut down in February, further hurting our economy.

  2. Mary E
    December 5, 2008

    I’ve signed the petition, I’ve joined the facebook group, I’ve blogged, & I’ve posted on as many community boards as I can sign-up for. I will write my public officials, when I’m not so emotional over the issue.
    BUT WHERE IS THE NATIONAL MEDIA COVERAGE?
    This law came about from a knee-jerk response to all the recalls last year on toys from China. It feels as if it was passed into law behind the common American’s back. A law like this should have been on the November National Ballot, stated in full but plain english that way all registered voters could have input to if this is a fair law.

  3. Pingback: National Bankruptcy Day - AmityMama.com

  4. flagstaffmama
    December 10, 2008

    I have too, joined the FB group, signed the petition, sent e-mails to friends, etc. Has anyone considered a day of local protests????

    BTW- You toys are rad! Good job!

  5. Stacy Williams
    December 11, 2008

    this is so sad. I love buying small toy companies products, like you make, because I need it to last. I do not think testing will equal good quality. It just won’t. I am a huge fan of small buisnesses for this reason. I am also so disgusted about not selling kids stuff. I have gotten great things off craigslist that were in new conditional and lasted through four or more children one item.

  6. Ron Webber
    December 12, 2008

    Guess we should look on the bright side. Look what this will do for Obama’s need to “create” 2.3 million jobs.

    Each part of an item will need an inspector, the inspector will need a committee for referral for disputes, and a final arbitrator will certainly have to enter the picture. What a rotten blessing this will make…another million or so on the federal payroll.
    You bet I will be signing this petition.

  7. Pingback: Great post by a woodworker - take a peek! « FuzzyBritchesBaby

  8. Pingback: Government Idiocy: The Consumer Product Safety Improvement Act « Lord Wolf’s Blog

  9. menacing pickle
    December 29, 2008

    Well done! I too am one of the small businesses that will not be able to survive.

    I make every reasonable effort to manufacture safe children’s clothing. I participate in voluntary programs so that my items can be tracked in the instance of a problem and buy from consistent suppliers that have guaranteed lead free zippers.

    The new criteria is not reasonable. It is sad that the contaminated products came from China yet it is the US businesses that will go under as a result of this. I would like to see data on how many “made in the USA” businesses like you and I produced items that contained unreasonable amounts of lead. I am guessing it will be zero.

  10. Pingback: New legislation that may make the costs of a child insanely expensive « The Clements’ IVF Journey

  11. Pingback: No more second-hand children’s goods? Say it ain’t so! | Sense to Save

  12. Deb
    January 6, 2009

    Great job on your post. This issue has come to the forefront of the resale industry as well. In many resale stores one will find locally or regionally handcrafted items. If the law continues to be interpreted in the manner it is, the handmade children’s accessory and toy industry as well as the children’s resale industry will fail to exist. The resale industry organization is working hard to get Congress to act quickly before 2/10/09. I’d recommend this site: http://www.savekidsresale.com for more reading on this topic.

    Also, if you want to write your congress person about this aspect of the CPSIA, here’s a link, enter your zipcode and let them know how you feel.

    http://capwiz.com/congressorg/sbx/f/?aid=12389726&r=1

    Congress and the CPSC (the body assigned to interpret the law and apply the law) need to know how the american public feels about this law and the unintended consequences. The only way to accomplish this is to write and call them.

    Please become active before it’s too late.
    Thank you,
    Deb

  13. Jennifer
    January 11, 2009

    Has anybody gotten their info straight from the horse’s mouth?

    I went to CPSC’s website, and while they do outline more stringent rules for new goods, it goes on to say this:

    The new law requires that domestic manufacturers and importers certify that children’s products made after February 10 meet all the new safety standards and the lead ban. Sellers of used children’s products, such as thrift stores and consignment stores, are not required to certify that those products meet the new lead limits, phthalates standard or new toy standards.

    “The new safety law does not require resellers to test children’s products in inventory for compliance with the lead limit before they are sold. However, resellers cannot sell children’s products that exceed the lead limit and therefore should avoid products that are likely to have lead content, unless they have testing or other information to indicate the products being sold have less than the new limit. Those resellers that do sell products in violation of the new limits could face civil and/or criminal penalties.”

    I appreciate that the author of this article seemed a little bit calmer than the first article I read from NobleWomanhood’s website, however, actually reading what the government has to say seems to negate his fears.

    I have, however, written to my congressman and senator, expressing my feelings on resale stores and how they are a vital part of our economy here in northern Indiana.

  14. Gael
    January 26, 2009

    I closed my storefront Dec. 31, 2008 thinking the online biz (work in progress) would be a great step for me to generate more business..I guess people would be doing more garage sale these days??

  15. James
    May 9, 2009

    Good post. Kinda sucks for the little guy though.

  16. Pingback: The CPSIA: Good in Theory, Hurting Small, Favorite Green Businesses in Practice : The Smart Mama

  17. Pingback: “The End” for Handmade and Secondhand Clothing and Toys? | Two Wishes

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Information

This entry was posted on December 5, 2008 by and tagged , , .
%d bloggers like this: