How The Government Runs Small Business Out Of Business
Phebe Phillips had to stop making her stuffed plush toys, she writes on her toy website (see photos of her toys there):
CURRENTLY, NO PHEBE CHARACTERS ARE AVAILABLE FOR SALE. PLEASE READ PHEBE'S LETTER TO YOU LISTED BELOW... Currently, and sadly, there is nothing available for sale. I have heard from many customers inquiring about why my characters are not in the store. So, here's the story. In August of 2008, President Bush signed CPSIA (Consumer Product Safety Improvement Act) into action. It is an end-component test of ALL products marketed to a child twelve and under regardless of where it is made. It affects products made in China, the U.S and yes, even in your own sewing room at home...if your intention is to market or sell to a child age twelve and under.Now, what is an end component test and why is there not a "Phebe" available for sale right now? It more than doubles the cost of my toys! It is approximately a $300.00 per component test of every thread, fabric or color change involved in my designs. Some pieces can have as many as 20 to 40 components. I always order in small volumes because I try to keep integrity of design and my availability limited to special stores and customers...so the combination of small volume and high components causes a drastic change to my pricing.
Since 1983, when my company started, my toys have always been tested by the standards that were required at the time, with costs being several hundred dollars per style...the new CPSIA ruling now makes the testing costs as high as ten-thousand dollars or more per large size style (as in Dancing Tutulina Rose Rabbit pictured to the right)...and the test is not done just once, but on each group that is reordered even if the exact same fabrics are used. So, to answer the question; Why are there no Phebe characters available for sale right now? Simply stated, I just do not have the volume of sales to support the quantity that I need to produce that would absorb this cost and keep my retail prices in the range that you are accustomed to.
Unfortunately, the companies that started the problem are so big and mass market, that they can absorb the cost and go on. However, because smaller companies cannot absorb this cost, the customer with be left with less of a selection of artistic and creative products and worst of all many moms with dreams of new inventive products will have a more difficult challenge bring their designs to the world! Just like me, many small and special companies are also taking a break to figure out how to deal with the costs and how this will pass onto YOU the customer.
As a reference, there was a story in the Dallas newspaper about an educational company, twenty-something-years in business, absolutely no problems...and it is over a year of their revenue just to test.
More here, at Safety And Common Sense. (As my lawyer likes to say, "If it were common, more people would have it.")
via Overlawyered
I say that 90% of government agencies and 75% of the laws could go away and we would be fine.
Jim P. at June 13, 2010 5:50 AM
Linked: another CPSIA casualty
david foster at June 13, 2010 6:39 AM
Seriously, wouldnt it be leagl to market such things a "novelty" item not intended for chldren under 12?
Parents ingnore those warning all the time
lujlp at June 13, 2010 7:19 AM
Heres a better question
Why end product?
Why is it ok for a fabic company to sell lead infested product to a toy designer?
Why not have the batches of such material tested by the people who produce tons of it at a time?
One shipment of white felt used in those dolls is sold to how many businesses?
Why cant it be tested once by the manufaturer before being sold as oppoed to having the same material tested tens, hunndereds, or thousnands of times over by the people who purchase the material?
lujlp at June 13, 2010 7:32 AM
Because that's not how the government works, I guess.
irlandes at June 13, 2010 7:51 AM
Somehow under this legislation my little boy ended up with a cadmium laced Shrek glass from McDonalds...
Eric at June 13, 2010 8:02 AM
Part of the problem with bad laws is they put a noble sounding cover on it. Anyone who votes against it is easily slandered and it can end their political career.
That isn't a defense of someone voting for or signing a bad law. But it does kind of put things in perspective as to how unprincipled representatives can replace principled ones. I can see the campaign ads against someone who votes against or vetoes "Consumer Product Safety Improvement."
Trust at June 13, 2010 8:04 AM
And not only is this killing the small craft toy business -- it's also a problem for the small consignment shops that sell (or used to sell) second-hand toys, baby clothes, etc. They can no longer sell those kinds of items without the proper testing. Ironically enough, even with a recession, which typically is good for consignment shops, several such stores in my area have closed in the last year because they can't sell children's goods (typically the best selling items.)
Those well-intentioned folks in Congress have now made it difficult for people who didn't have a lot of money to spend on child products. Ironically, they will now end up buying even more (Chinese made) goods at Walmart.
Tom Accuosti at June 13, 2010 8:16 AM
re: sherk cup recall by Mcdonalds
Who exaclty is supposed to test these product?
Conigment stones can sell untest good, but at the same time producres cant sell good to stores, and at the same time McDondals which is a store can sell good before they test them on the basis of chinas say so they they did the testing?
At which point precisly does this law mandate the end product testing be done? By the last link in the chain of maufactuters? Or the retailer?
lujlp at June 13, 2010 8:24 AM
"well-intentioned folks in Congress"...there are some who are well-intentioned in the sense you mean, but for most of them, the intention that matters is their intention to get reelected, gain seniority, and position themselves for a successful career as lobbyists, consultants, or lawyers after their "public service" is complete.
If small businesses of the type affected by this legislation had been as well-organized as, say, the teachers unions, then this would never have happened. Basically, we have now entered a phase of American history in which nothing will be permitted to exist unless it serves the desires of a powerful and well-organized interest group.
david foster at June 13, 2010 8:29 AM
For all the talk we hear from politicoes about small business being the backbone of American prosperity, the gov't sure does its damnedest to make it hard for you to operate one.
Being double taxed and having no access to health insurance are key reasons too many great minds give up and toil in wage-earning jobs. Apparently, the suits in washington prefer us to be in a position where we must work for the corporations that fund the coffers of the political parties.
Deirdre B. at June 13, 2010 8:40 AM
The ironic thing is that it was the toy giant Mattel that was the cause of this law due their importation of lead containing toys from China. BUT, again this year they have received a waiver from the FTC and do not have to do the end product testing. They simply must certify that they did their own testing and their toys are lead free. So, every other business has to pay for Mattel's malfeasance while Mattel gets a pass.
Jay at June 13, 2010 9:25 AM
Amy Alkon
http://www.advicegoddess.com/archives/2010/06/13/how_the_governm.html#comment-1723399">comment from JayMy neighbor, a stay-at-home mom whose husband lost one of his two jobs (the one that paid well) in the recession, made some board games for kids -- out of organic cotton with vegetable dyes, plus wood game pieces -- and thought they'd bring in some extra income for the family. They are now in a box in her garage, because it will cost $4,000 to test EACH of the four games.
Amy Alkon at June 13, 2010 9:35 AM
I hate this law too. I make cloth diapers to sell and am in the process of transitioning to an actual website store. I've been trying to figure out what needs to be tested and what doesn't. From what I've been able to find out so far, the fabrics I use do not have to be tested unless I alter them from the original state by dying them. My suppliers have certified that the fabrics are safe and since I've done nothing other than cut it up, the certificate still fits. I've gotten mixed answers on elastic, snaps, and velcro I use. They've been tested and certified by the manufacturers as well and I do nothing other than apply them. Trying to clarify with official people about testing I either get the answer that a diaper is exempt from testing as it's a textile product which is exempt and also a utilitarian item. Others say I have to test everything. At this point they are trying to enforce a law they can't make sense out of. It's very frustrating to me as this is my extra income and I don't want to get slapped with fines for not complying with the laws but can't afford to test everything. I'm not testing anything right now until it's further sorted out, especially considering the manufacturers of my supplies already have!
BunnyGirl at June 13, 2010 10:52 AM
Its asanine.
Why did we NEED this law in the first place?
We didn't have thousands, or even hundreds, or to my knowledge even dozens, of children dying because of lead or anything else in toys.
People like to cite...such and such child died in such and such place because of a toy...they use that and then ignore the MILLIONS who suffer 0 ill effects ever.
And all of us managed to grow up just fine and dandy with none of that crap in our lives.
Robert at June 13, 2010 2:14 PM
This past week my small buisness reseived a ticket for not having a buisness lic.Funny thing is we are not open for buisness we are getting ready and finishing work to get the inspection to get the lic.
Come to find out that my buisness partner is working against me the Fire Inspector came by to see if the 2 things where done Fire extinguishers and door closers there where other things the land lord was sposed to take care of.
Master mind instead of telling him sure look around and not put his 2 cents walked around boasting about all the things he fixxed the inspector came back a hour later with a 500.00 ticket for not having a buisness lic.
Had he kept his yap shut there would have been just a slap on the hands and told to get it done
At this point I am pretty much fed up with his go it aone and acting like a big shot Monday he is going to own the ticket.
RexRedbone at June 13, 2010 2:30 PM
So as usual, we have bookful of new, costly regulations that are causing all kinds of problems... while failing to solve the problem that the regulations were supposed to address. Never let a good crisis go to waste, huh?
Cousin Dave at June 13, 2010 3:28 PM
The really stupid part is that regulations were already in place for testing and certifying levels of various toxins were below a certain level. The companies involved failed to follow those regulations and because of it, the government is trying to make everyone suffer under even more strict and ridiculous regulations! I really hate stupid people!!!
BunnyGirl at June 13, 2010 4:37 PM
It took me a long time to figure out why big private companies were so in love with big government. What you've posted is a perfect example why!
Robert W. (Honolulu) at June 13, 2010 5:21 PM
It took me a long time to figure out why big private companies were so in love with big government. What you've posted is a perfect example why!
It's a very common pattern. Large established businesses often support increased regulation, they can soak up the cost and it increases barriers to entry to potential competitors. Something to remember when politicians promote new laws by saying they have been developed "in consultation with the industry".
If something like this had applied to icecream, Ben and Jerry's wouldn't exist.
Ltw at June 13, 2010 10:33 PM
It's basically a variant of the Baptists and Bootleggers problem. Although in theory the industry concerned should oppose more regulation, they support it because it reduces competition.
Ltw at June 13, 2010 10:39 PM
@Robert:
We needed this law to destroy small businesses because they are the only way that true capitalism moves the economy forward. In other words, by destroying small businesses, megacorps and the crony capitalism (quasi-fascism) that they live under can thrive.
A simple test of whether or not a law will be passed is whether or not it increases the chances for graft. If it does, it will be passed.
brian at June 14, 2010 6:08 AM
Just follow the money. That will tell you who wants it and why. ;-)
Jim P. at June 14, 2010 5:45 PM
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