Who’s teaching you how to do private label?
As you’re already aware, the people we spend the most time with have a huge influence on our behaviors. And our teachers take things a step further: they don’t just influence our behaviors… they actually shape them.
Who’s shaping your behaviors?
I left Amazon to start Cascadia Seller Solutions. Having spent years in the private label and compliance sector, I saw a major gap between regulatory compliance requirements and a layman’s understanding of these things. So our mission at Cascadia is to help young businesses who are starting out, or who are in the “very small” to “small” category (1-5 employees or 6-25 employees respectively) to learn the private label business from the inside out.
I’m looking for businesses who want to learn how to do private label or branded products on Amazon – the RIGHT way.
- “get rich quick overnight” way
- “buy cheap garbage from China then market the heck out of it to dupe people into buying junk” way
- “deliberately import illegal items and sell them anyway to make a quick buck” way
- “comply only with whatever US Customs requires and ignore the rest” way
I’ve seen all of this, and more. I’ve seen other consultants teach all of this, and more.
I’m setting the record straight. It’s time for some tough love. It’s time for some discipline. Take your seats class, school is in session.
Right now, I’m going to break down for you what you’re missing about doing private label or branded products on Amazon. And let me be clear here – Amazon knows you’re missing it, too. They just haven’t figured out the best way to enforce on this information yet.
But rest assured that at some point soon, they’ll figure out a way to validate your product’s compliance just like they have figured out a way to police nearly everything else on the website. They already have the data. They just need a method of enforcement.
Do you want to wait until then to get your product lines sorted? Most of us wouldn’t be comfortable taking that level of risk. I certainly wouldn’t.
If you have been following the Amazing Seller (Scott Voelker), Proven Private Label (Jim Cockrum), Amazing Freedom (Andy Slamans), Get on AZ (Barrington McIntosh), and pretty much every other similar page I reviewed, you are missing something very important that can cause you to be sued, or fined by the government, or both, and literally lose EVERYTHING.
I am not hyperbolic by nature – I’m a former Amazonian, I was there for 8 years total – and Amazon is famous for hiring introverted data geeks who are all too literal.
This is not a joke, and it’s not an exaggeration. You could, in all seriousness, lose everything.
This issue is too important to our clients, and too important to the seller community as a whole (and the trust that Amazon’s built up in the community, that we all benefit from), for me to keep being quiet about this – and more importantly, keep giving these “gurus” the benefit of the doubt.
It’s gone on long enough.
I’ve said it under my breath too many times.
They won’t make sure that their communities hear the importance of this message.
Maybe they don’t even know how important it is themselves?
But there I go again, giving the benefit of the doubt.
Of course they know.
They just don’t seem to think it’s important unless Amazon is enforcing on it. And since Amazon has limited enforcement around product compliance right now, this continues to be a gaping hole in the product development courses you see online, and the advice that unsuspecting entrepreneurs are receiving from these “gurus”.
So, what is it exactly that they’re missing?
All of these “gurus” are missing product compliance. Product compliance refers to a broad range of product based elements: labeling, quality, safety performance, regulatory compliance, and registrations/certifications. None of this is very exciting stuff – it’s also very intricate and takes years to learn, so it’s difficult to teach effectively.
Imagine: you hire a coach to help walk you through the Product Development process, and they seem really helpful. You’re learning a lot, and in a few months time, you have a product you’re quite proud of. You put it up on Amazon and you start selling, and before long you receive a report of a child being put in grave danger as a result of using your product. And just like that, the CPSC is involved, you’re paying fines, and publicly recalling all of your merchandise, which is now unsellable.
This situation happened to someone who ended up contacting me and becoming a client over 2 years ago, and I’m so glad she did. I was able to help get her oriented on the right (compliant) path. She’s slowly recovering but that was a huge blow to her business and reputation, and it’s going to take even more time to mend.
What this boils down to is that so called “experts” are teaching new entrepreneurs how to import products, and how to sell products to consumers, but not how to protect themselves. Not how to protect the consumer by ensuring their products are safe. And certainly not how not to get sued.
So why am I pushing on this now?
There was a recent thread on The Amazing Seller (more on Scott below) in which a seller had his products seized in the UK because they had a fake CE (Conformite’ Europeene, or European Conformity) mark.
Multiple sellers suggested that he just offload the non-conforming product to unsuspecting customers via his own website, or send it to another country, even sell it on eBay – very few of the sellers on the thread pointed out that the seller should have understood his obligations PRIOR to importing the product.
It’s a product business, and you should know the laws and regulations that govern the business you choose to open, where you choose to open it.
Sellers are investing tens of thousands of dollars to launch businesses, building businesses worth millions, based on a quicksand foundation. You might get lucky now, you might continue to get lucky for quite some time – but unless you truly understand your risk areas and mitigate for them, you never know when your risk will turn into a port seizure or government fine, a listing takedown by Amazon, or worst case scenario: someone getting hurt and you getting sued for everything you have.
Let’s take a closer look at some of the more prominent “gurus”, one at a time.
Note: I was asked after publication why I chose to use people’s names and not just their course info or speak in generalities about what’s missing. In the consulting and coaching industry, your name is your brand. You might have an actual brand, but typically people know you by name, and that’s why I included the actual coach/consultant name.
Here is a list of everyone’s course I looked at. No one included compliance or noted it as something that “hey, you should do this, even if I’m not teaching you, and here’s why it can ruin your business if you don’t.” I chose these four due to their Google rank (they’re the most likely candidates for newbies to learn from) and being on Facebook threads where my comments pointing this out disappeared (presumably because the moderators had a problem with it), or because when I reviewed their website thoroughly, something jumped out at me as particularly problematic. If anyone sees that compliance has been added to their pages, then that’s really fantastic, and kind of the whole point. Wherever I did see compliance referenced, I tried to call that out, and am happy to continue to do so!
Courses in order of their Google search rank:
- Jim Cockrum, Proven Amazon Course
- Ash Peat, Amazon FBA and Private Label Products – The Complete Course!
- Jason Gandy, Launch Your First Private Label Product | Amazon FBA 2017
- Scott Voelker, FREE Private Label Course
- Brendan Yay and Kelly Minakes, AMZ Ninja
- Terry Schierer, Private Label Selling
- Andy Slamans, Slamazon Private Label
- Dean Soto, Online Empire Academy
- Mark Scott Adams, Amazon PL Coach and Seller
- Andy Slamans, the SMART Private Label course
- Adam Snyder, Homemade Entrepreneur
- James, Advanced Private Label Course
- Neil & Karen Gwartzman, Import Success Formula
- Steve Chou, My Wife Quit Her Job
- Colton Shuell, FREE Private Label Course
**NOT a comprehensive list. But after page 4 of Google results, it starts to be more blogs and podcasts than courses.
So let’s go into a few examples for illustration purposes.
I have never met Scott Voelker, so I don’t pretend to know anything about him as a person. However, I have had some of his former students as clients, when they were facing shutdown of their ASINs, and potentially the demise of their hard work. Scott’s course approach is to focus on choosing, sourcing, and marketing your product. Well, let’s take a look at the good old garlic press, a stand in for “generic widget” amongst Scott’s Facebook group members (not sure where the garlic press widget meme came from, whether Scott himself or just the group).
A garlic press is actually a regulated item, regulated under 21 CFR 170-199, the Food Additives section of the US Code of Federal Regulations. Basically, any packaging or eating utensils, plates, cups, etc., are considered “unintentional food additives” in that in the normal course of usage, the product might leach into your food and you eat bits of the product your food was made with, stored in, or served on.
In addition to the federal code governed by the FDA, any product sold in the US should be lead free, per the Federal Hazardous Substances Act, or appropriately warned against if it does contain lead, as it has been found that there are no safe exposure levels to lead for growing children. So, just like the juice squeezer I recently had tested that failed for lead, so too does a garlic press need to be tested for lead.
And, the CPSC holds sellers responsible for what they sell if it contains lead, even if they’re not the importer or manufacturer.
This is partly why many large companies require certificates and declarations from suppliers before purchasing from them. And if they have these requirements, you should too.
Here’s a slightly scary breakdown of chemical hazards in the US, and which agencies regulate them. It’s not easy to make sure that the products comply with local regulations. And if you’re already overwhelmed, don’t think for a moment that your China-based supplier is on top of all this. They are not.
No… compliance is not super easy. In fact, it’s somewhat complicated and scary. But, as a business person, I would much rather know that ahead of time, make sure to test and mitigate for the risk, maintain solid records, and THEN import my product. I would never want to rush ahead blindly, believing it’s easy and safe, potentially putting others in harm’s way, and risking my own investment in the process.
As a business person, I would be absolutely livid if I found out I’d trusted someone as my teacher and that person drove me straight into a legal disaster, thanks to the omission of huge chunks of information.
Andy Slamans of Amazing Freedom is a great guy – I’ve met him a few times, and would absolutely have drinks with him at a show. This doesn’t mean I’d recommend him to teach a friend of mine how to launch their Amazon business – just because someone has a solid grasp of Amazon marketing techniques doesn’t mean they’re the right person to advise on how to launch a products business. These are two separate things.
This is a good point to keep in mind – there is nothing wrong with their advice on choosing products or marketing them – in fact, I have listened to Andy speak and learned some interesting and very useful approaches from him.
But as far as the compliance piece – the part that doesn’t fail often, but when it does, it’s catastrophic – that is what is completely missing. On his website, it says that manufacturing with the right supplier is critical – and there’s a picture of a hoverboard. Probably the most ironic and baffling picture he could have chosen.
Here’s why I find that baffling: In 2015, Amazon took down tens of thousands of private label hoverboards due to them lighting on fire unexpectedly, and doing undesirable things like burning down houses and killing people. These incidents have continued to occur, with many recalls issued by the US CPSC, including a statement that CPSC believes that are no safe hoverboards on the market today (in 2017). But this image is the one he chose to illustrate why selecting your supplier is critical…??
I don’t know whether to laugh or cry.
There aren’t very many courses out there specifically aimed at the outside the of the US market, so there aren’t a lot of examples to draw from here.
Barrington McIntosh’s course mentions FDA Rules – three guesses as to why! Right on the first try – it’s one of the few agencies fully integrated with US Customs, so FDA Customs holds are a regular issue, and knowing whether you’re sourcing and selling a medical device is a critical component to success (among other FDA regulated products). But I don’t see CPSC (Consumer Product Safety Commission) on the list. I don’t see the FCC, or any voluntary standards organizations.
Missing these can result in getting gated out of your own product subcategory, as Amazon has been slowly gating subcategories this year, or getting shut down for safety violations – only one part of the compliance puzzle is the U.S. Customs requirements. But good on him for including that, because he was the only one who explicitly called out compliance at all for every single page I reviewed.
But to be perfectly honest, the most appalling comments often came from Jim Cockrum’s group, My Silent Team, of which I used to be a Facebook member before I decided to leave the group because I couldn’t take my blood pressure rising so regularly.
And I mean appalling in that it’s supposed to be a moderated group, but people made the most terrible statements about launching without product testing, not knowing what certificates are when asked, and so on.
Overall, the level of ignorance was beyond that of The Amazing Seller, where at least there were some sellers in the recent thread I mentioned that noted that product compliance and safety is “Business 101”.
Here’s why this is so disappointing: Jim has actually posted a great article on why PL is so risky. But somehow, the message was somehow not getting to the group at large.
On My Silent Team I regularly saw comments from users who bought a few dozen products from Alibaba and sold them on Amazon, or got their listings or accounts suspended for not using e-commerce ready packaging, much less properly labeling the products. Note, these types of rookie sellers are also on the Amazing Seller – there are just also some experienced sellers who pipe in on the threads I’ve seen.
Jim’s group is primarily focused around people who learned arbitrage methods, and then switched to what I call “China arbitrage” – basically using the same techniques they used to buy on Wal-Mart clearance and then sell on Amazon, but switched to Alibaba sourcing and then listing on Amazon.
The problem here is that Wal-Mart ensures compliance before cutting purchase orders, while Alibaba is a known cesspool of counterfeits and unsafe or illegal products.
And again – the tools and techniques provided in Jim Cockrum’s course as to how to list products, how to respond to customers, how to be an Amazon seller – ARE NOT WRONG and are actually very helpful. The point here is that they’re missing a critical element of the puzzle in developing a products based business that can cause you severe personal, professional, and financial heartache in the future if you don’t fix things asap.
So what can you do?
The first thing you can and should do is look up your product on saferproducts.gov and see what kind of issues have been registered in the database on it (if it’s a general consumer product). If it’s something regulated by the Food and Drug Administration (medical devices, supplements, food, etc), then search fda.gov for “Warning Letters” and recalls to see what kind of issues can occur.
Sourcing in the US does not automatically cover you – it makes you a lot safer, but the reality is that domestic producers keep FDA inspectors and bureaucrats more than busy enough without including their work at ports and foreign manufacturing facilities.
Some folks I’ve worked with say “I spoke with my lawyer and my insurance agent, and I’m good to go!”
#1, lawyers don’t typically specialize in compliance from a functional/development standpoint. That’s typically done by a product development expert or engineer.
#2, insurance only protects you in the event of a lawsuit, ONLY if you’ve exercised “due care” in most cases (due care is the concept that you took the precautions that any reasonable person would in the same situation), and only up to your insurance coverage limit.
#3, typical compliance efforts require understanding U.S. Customs, laboratory testing, and registration with the government, much of which is simply not known even to the regulatory expert lawyers we work with.
So, you’re definitely not “good to go”. You need to dig deeper.
There are two times when it is critical to engage legal counsel – the first is at the beginning of your Private Label journey, to do research on product liability cases that have previously occurred. This will help you improve the instruction manuals and warning labels on your own product.
You can do this research yourself, but a good lawyer will have the know how to find these cases more quickly and efficiently.
The second is if you receive a credible report of serious harm caused by your product, or even potential harm, such as a strangulation hazard to a child. This report is going to require you to engage with a regulatory body. Never engage with a regulatory body without legal counsel unless you like paying fines!
One last note on lawyers – specialized legal advice like intellectual property research or infringement work is also highly recommended, but this is something that I think most sellers are aware of and will check for before launching.
What does Cascadia offer?
At Cascadia, we offer a few options on how to make sure you’re compliant. The first is our Done For You service, where we actually develop new products for you. If you’re primarily an internet marketer, and you either don’t understand or don’t like the product development process (working with a factory, working with a laboratory, making sure labels are accurate and complete) – this is the program for you. Then, you take the finished (and compliant) products and market the heck out of them.
We also have a course, for those who want to learn on their own, or you can sign up for the waitlist for our next group launch. To give you an idea of how serious compliance is, more than half of this course involves compliance related topics: understanding factory certificates, how to set up and review inspections, how to perform regulatory and safety research, what tools and techniques you should use to manage and maintain quality, how to report incidents to regulatory bodies, and more.
And as a bonus, anything you have a question about that isn’t covered in the course, you can ask about in our private Facebook group.
We also cover marketing topics in the course, but primarily from the standpoint of how Amazon expects it done within TOS (Terms of Service). There are so many marketing experts out there, you don’t need me to be your expert guide there. But you do need me to be your expert guide here.
“But no one else is doing this, won’t it cost more money and maybe even price me out?”
Absolutely. The cheaters and the ignorant make it very difficult to compete. But the great thing is, most of the time, their products truly are illegal to sell or unsafe to use. All you have to do is prove it, by working with a third party independent laboratory, just like I did in the example of the lemon squeezer. Sure, it’s frustrating, and we’d all rather be doing something else, but once you’ve proven their products are unfit to be sold, buh-bye slimy competitor!
By doing your own due diligence, you can take out everyone who has not done theirs.
I want you to be one who takes out the competition, not one who gets taken out by someone who did the right thing. The choice is yours.
We have a client we work with regularly to report unsafe and uncertified products to Amazon and to regulatory authorities. After I published my findings, he wrote to us: “LOVED your post on the Cascadia blog from earlier in the month. The best part was the lemon squeezer with the big FDA logo in their listing that contained lead. Simply unbelievable. Makes me glad (and proud) that we started working with Cascadia when we did.”
Multiple times we’ve gotten competitors removed from the Amazon websites in the US and Europe through our reports. We only support in these efforts when it is proven that the product is illegal or unsafe, of course.
It would be unfair and unethical to lodge false complaints. But unfortunately, there is so much ignorance about product compliance, it’s really not difficult to find and report these competitors.
Now you know what you’re missing – and it bears repeating – Amazon knows it too. As I said, they just haven’t figured out the best way to enforce on sellers yet. But you can definitely rest assured that at some point soon, they’ll figure out a way to validate product compliance like they have figured out a method to police nearly everything else on the website.
So which side of the fence do you want to be on? You can either be the one taking out the non-compliant competition, or you can be the non-compliant competition that’s getting taken out.
Cascadia’s Done For You program ensures total compliance in whatever category you are selling in. We get it… you can’t know what you don’t know! That’s why we created Done For You. You can rest easy (and so can we!), knowing your products are compliant.
Right now, can you honestly say that you are 100% certain your products are compliant?