Online sellers of handmade soap, lotions and cosmetics are concerned they could be wiped out if a new Senate bill becomes law.
The Personal Care Products Safety Act would require cosmetics manufacturers to register with the Food and Drug Administration, file reports listing the ingredients in their products, and pay an annual fee to help cover the cost of the enhanced oversight, among other measures. (You can read more about the regulation in today's EcommerceBytes Newsflash
Soap? Is soap even considered a cosmetic?
has a long explanation about whether it considers soap to be a cosmetic or a drug - in which case its agency oversees it - or simply "soap," in which case the Consumer Product Safety Commission (CPSC) regulates it.
"Examples of cosmetic uses (of soap) include making the user more attractive, by acting as a deodorant, imparting fragrance to the user, or moisturizing the skin."
"Small businesses" are supposedly exempt, but again, you might ask, what is a small business?
According to the bill's sponsor, there are several protections for small businesses, including a complete exemption from the registration, reporting and user fees for cosmetics makers with less than $100,000 in gross annual sales. Even assuming a generous profit margin, that's an extremely low standard.
As this article
about online sales tax reported, the Senate has already defined small business as those with less than $1 million in annual remote
sales - sales outside their state, and eBay defines small businesses as those with $10 million in annual remote sales.
The government's Small Business Administration defines small businesses in manufacturing industries to be anywhere from 500 employees to 1,500 employees.
In discussing the bill, a law firm noted
that the requirements for adverse event reporting exceed requirements applicable to non-prescription drugs!
And, the firm said, "Presumably to facilitate contacting the cosmetic company, cosmetic labels must include a domestic phone number or electronic contact information. A domestic address is not an option."
The Handmade Cosmetic Alliance
, which represents over 300,000 small handmade cosmetic companies throughout the U.S., opposes the bill. It notes that the industry is comprised of largely women-owned and operated businesses (95%), employing an average of between 1 to 3 employees.
Surprisingly Etsy had no comment when contacted for comment by EcommerceBytes.