Please note- this is NOT legal advice. Use at your own risk. I am pulling this information together to take what is a very complex set of legal documents and turn them into insights for businesses in the artisan and craft industries.
In the first part of our series, I explored the new GPSR standard, and why it has been such a challenge for businesses. In this article, I want to share more about how the implementation is progressing and how artisan businesses are approaching the new standards. See the first article here.
Many businesses are selling on both marketplaces as well as through their own websites. When thinking about the implementation of the new standards for your business, consider separating out how to approach marketplaces versus your own website.
Marketplaces
Marketplaces move on their own development schedules, and they have had to interpret the new regulations as well. Expect to see that each marketplace handles the implementation of this a bit differently depending upon how they have designed their marketplace.
The Marketplaces also have a role in that they need to ensure that the manufacturers on their marketplace are complying with the standards. They also need to be part of the new Safety Gate reporting systems. Ensuring marketplaces comply with the standards is a faster way to overall industry adoption because marketplaces are large collections of sellers. So if the marketplace wants to compliant, all the sellers have to get compliant.
I’ve seen a couple different approaches from marketplaces to date.
Enforcing new standards
Some marketplaces may force you to add additional information to your product listings right away. Larger marketplaces such as Amazon have legitimate concerns that products sold on their marketplace are compliant with the new regulation. Larger marketplaces have many sellers and are often run by large companies. If a regulatory body wants to ensure compliance, larger marketplaces are more likely to be reviewed first.
This is a large systems implementation and compliance project for many of the marketplaces such as eBay and Amazon. They may have API’s that allow other systems to feed and interface products. They have different versions of their products in different countries. These marketplaces have likely been working on the implementation of this for a long time, as there are a substantial number of system changes required to make this possible. This is why you are likely to see requirements split out into a number of different fields and a lot of communications. Large marketplaces will also likely be the most onerous in terms of sending stern reminders to get your attention.
For example, here is what Amazon is saying is required for their marketplace. Notice how it is
Ebay is another large marketplace. Ebay has its own set of guidelines on how to accomplish compliance. They have said that if you don’t comply- “If you don’t comply with the GPSR, your listings may not be visible to buyers in the EU and Northern Ireland.” Again, may not be visible. Find more information about how Ebay is approaching GPSR here.
Ebay has also been providing tools for sellers to update listings in bulk to aid in the efforts to get compliance information set up easily.
Marketplace has a more flexible approach
Other marketplaces will have a more flexible approach where they allow you to opt out or opt in.
I asked Susan Bonnar how The British Craft House was managing compliance, and she shared:
“The vast majority of TBCH sellers stopped selling to Europe post Brexit – but all of course sell to NI and we sell quite a lot there! I had to carefully think about the best way to help my sellers be compliant with the new regulations. For TBCH, I took Northern Ireland out of the UK settings a few weeks ago. If sellers choose to sell to Northern Ireland they can choose it as an option – just like all the other shipping zones, they choose where they want to sell to.
Sellers who choose to still sell to NI or the EU are responsible for arranging their own ‘responsible’ person to take care of all the paperwork and do all the risk assessments etc associated with GPSR. They just need to add the relevant information into the policies area with a heading so it is clearly findable. This gave us a balanced approach that helped sellers be compliant right away even if they did nothing. It also allows those that want to continue to sell to NI or the EU a clear path for what to set up on our marketplace.”
One of the more controversial flexible approaches right now is Etsy.
Etsy has also shared an overview of GPSR for their sellers and information on how to add a responsible person. However, to the best of our knowledge, Etsy is also leaving Northern Ireland within the UK for purposes of purchasing and shipping. We don’t know if this will change in the future or not. It leaves sellers having to weigh how to handle this for Northern Ireland. Some sellers say they will simply cancel orders from Northern Ireland. However, there are a number of questions about whether it is technically legal to have it left this way. I am not an attorney, so I cannot answer that. But this is a big open question many sellers have, and are waiting for Etsy to clarify.
Update: after this was published on Dec 13th, Etsy has now come out and shared that they will be creating an option to have Northern Ireland removed. They have said their next update will be by the end of the year, but there is still no timeline on when it will be changed on the platform.
Folksy has also released its set of guidance on how to manage the implementation of GPSR for its sellers. As you can see when you read this, they also have their own interpretations of what is in and what is out for GPSR.
How artisan businesses are approaching GPSR
There has been a wide range of responses to the new requirements. On a number of social media platforms, businesses have decided to stop shipping to Northern Ireland and the EU. For some, the level of sales to the EU make the cost and work for compliance the tipping point.
I have three different business examples of artisan businesses that have been assessing the impact of GPSR and what they are doing.
Taking a temporary pause
Karen from Wraithmaille decided to temporarily suspend shipments to Northern Ireland and the EU while she works through the processes that are needed. This gives her some extra time to see if clarifications are provided as well as get through the holiday season. She shared:
“The key issues for my business have been the lack of guidance and support for small businesses. At the busiest time of the year, I’m contacting companies to enquire about representation in the EU only to be quoted thousands of pounds. I’ve been participating in webinars to gain a better understanding myself as well as supporting other businesses, contacting manufacturers to help me write technical files and learning about declarations of conformity. I’m hoping I won’t need to undertake further lab testing to comply as that would be another financial and regulatory burden.
There doesn’t seem to be a great deal of accessible information from the European Union, and this has been the main issue. Although I have been asking for the guidance for SME’s that they have been promising before implementation, I’m still waiting with less than 48 hours to go.”
Getting set up for compliance
We Are Makers is a coffee table magazine that celebrates the stories of makers, artists and craftspeople from around the globe. Their approach was to get their magazine set up right away.
“We produce a magazine, and also have to comply with the new GPSR rules. For us, it was really all about making sure we collected the information regarding our manufacturing process: data sheets, paper specifications and the like and completed some very simple paperwork. It really isn’t any different than existing British standards or even ANSI that manufacturers have to comply with. All in all though I think I had to track down 3 maybe 4 bits of A4 paper and write a risk assessment for the use of our magazine; I know it sounds silly, which isn’t nearly as daunting as it sounds. The unique part was getting the appropriate European Responsible person setup as we need someone based in the EU. We opted to work with EUify. All in all, implementing the process for us was relatively easy.”
End to End compliance project
Jo is the creative force behind Oops a Daisy, building her stationary empire in Essex in the UK. She wrote a full account of the process she used to get prepared and compliant here. I highly recommend reading this to get a better feel for the journey to compliance. I asked Jo some additional questions to learn more about getting ready for compliance. She worked with EU Compliance Partner to help. When I asked how long it took to get everything in place, she shared:
“The part that took the most time for us was figuring out what we actually needed to do. Once we had broken this down, we risk assessed our products in categories (stencils, washi tape, stickers etc.). As they were all “low risk” we were able to apply the additional information to our listings in bulk. This was fairly easy to do with the tab function on our listings and only took a few minutes as the majority of our products needed the same information.
In terms of packaging, we looked at the various options available to us (adjusting individual product packaging, creating additional product labelling or an insert to the package), and instead decided to add the contact information and safety symbols to our printed invoices. These are printed for each order and also contact the product SKU so everything is contained in the same place.”
With one of the key provisions of GPSR being to have an EU Representative, many businesses will experience increased costs to manage compliance. One key question to ask is if your margins will support this increased cost, or if you will need to pass it on to customers. I asked Jo how she approached this decision, and she shared:
“At this point in time we have not chosen to adjust our pricing, and instead to absorb into our overall margin. Thankfully we still have a large enough customer base purchasing that this has been worth the time and effort for us as a business. The additional costs to our customers from the customs administration fee is already a huge barrier to purchase, to increase the prices on top of this might end with us having no customers choose to purchase in the EU.”
Conclusion
GPSR is a big new product safety standard coming into effect on December 13th. It has been very challenging for businesses to implement.
Many businesses have temporarily put on pause selling to Northern Ireland and the EU while they wait for guidance or simply get past the busy holiday season. The largest open question from my perspective relates to Article 51. Different lawyers from different compliance companies have differing opinions on this article. The opinion from one side is that everything must be compliant day one. The opinions from the other side are that products that were for sale before Dec 13th do not have to comply. There doesn’t seem to be any official clarification from the EU on this, adding to the confusion.
Regardless of where article 51 ultimately lands, small businesses have to objectively look at their businesses to see what makes sense. Some have already complied and gotten their processes set up. Some businesses will say the added cost, time, and processes don’t make sense given the level of sales and their margins. Other businesses will wait for clarification and/or revisit in the new year once they are past the busy holiday season.
I will continue to monitor what is happening and share additional information as we learn more about how this new regulation rolls out and is enforced.
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