CPSIA Update: From Manufacturers of All Different Sorts

By May 25, 2009Regulations

From the Dallas Business Journal, a report on the recent House Small Business subcommittee hearing on the Consumer Product Safety Improvement Act, “Product safety law too costly, manufacturers say“:

For Swimways Corp., a Virginia Beach, Va.-based manufacturer of water products, the problem isn’t lead, it’s phthalates — compounds often used to soften vinyl. The law banned the sale of children’s products that contained phthalates, even if the parts containing phthalates are not accessible.

Because the law made the new phthalates standard retroactive, Swimways was stuck with inventory it couldn’t sell. Retailers returned or destroyed Swimways merchandise and charged Swimways for the expense. The law cost the 70-employee company more than $1 million, said Anthony Vittone, vice president and general counsel.

Also cited are the experiences of McCubbin Hosiery, an Oklahoma City manufacturer, and Starbright Baby Teething Giraffes in Boalsburg, Pa.

And separately, from San Francisco, commentary on the costs of testing from Dawn, a San Francisco Bay Area designer who creates in 100 percent natural, locally-made peapod-shaped baby sleep sacks — Violet’s Peapods, named after her daughter. From AmendtheCpsia.com:

If I were to have each batch of my current inventory tested by CPSC-approved third party, I would have to pay $57 per print and batch for 3rd party lead testing, and $278 per print & batch for phthalates, totaling $4,690 altogether.  If I were to increase my price point based on cost increases to cover this 3rd party testing, I’d have to raise my price point by $19.14 each.  My precious baby sleepsacks are barely selling at $53.95, so charging $73.09 each in these tough economic times would surely put me out of business.

My only other alternative would be to liquidate my inventory completely, selling it for half it’s worth (and losing $13, 218 in the process).  Once I’d get the cash flow from that, I’d be able to start up a single batch of sleepsacks (ONE PRINT).  I’d then have it 3rd party tested for lead and phthalates, and increase the price point to $57.95.  With an increased price point and only one style/print in my line, I could hardly remain competitive in the marketplace!

If the law doesn’t change by February 2010, I may sadly have to close my doors forever.  I started my business with my life savings and a dream, and I would hate to have to give those up.

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