THINGS You Need To Hear RIGHT NOW About Amazon Product Regulations and Compliance with John Burhans

by Tomer

May 10, 2022

THINGS You Need To Hear RIGHT NOW About Amazon Product Regulations and Compliance with John Burhans.mp4

Things You Need To Hear Right Now About Amazon Product Regulations and Compliance with John Burhans

Things You Need To Hear Right Now About Amazon Product Regulations and Compliance with John Burhans

Tomer [00:00:00] Okay. So in today’s video, we have John Burhans. Did I pronounce it? Well.

John [00:00:05] It does.

Tomer [00:00:07] Okay. that help Amazon sellers and customers that import the goods with all the necessary requirements in order to comply with the product and customer requirements. In this video, we learn what are the best practices and things that you didn’t know you need to have in your packaging or other requirements that we have? Welcome, John. Thank you very much for, you know, doing this with me and being on the channel. I know that you’re very busy. Could you tell us more about yourself and what you do?

John [00:00:44] Yeah, of course. Thanks for having me. Appreciate this. You know, it’s always a great opportunity to talk directly with some of my clients and Amazon sellers because there is a lot out there that many people are not aware of. And you could really get into some trouble with the U.S. government.

So my name is John Burhans. I run Burhans Consulting or also doing business with Burhans Global Logistics. And so I’m a licensed customs broker. I’ve been involved in the business of logistics and trade compliance for over 12 years now. I worked at a biomedical firm. I worked at Sotheby’s auction house dealing with jewelry, watches, high value pieces of artwork, those kinds of things. And then my last real corporate job was four years as the director of North American Market for a retail marketing company that did your basic kinds of things pots, pans, glassware, toys, textiles.

I mean, a whole range or plethora of items. Yes. And so since then, for the last two plus years now, I decided to branch off and start my own firm, specifically because I saw that a lot of people are moving to this e-commerce marketplace and they do not have a great experience with compliance requirements.

They don’t have the funds or the or the need or ability really to go out and bring that kind of knowledge base in-house. And so I provided a service to basically review products, advise on a simple things like HS codes for duty rates or larger things like, you know, if you’re dealing with pesticides or air filters or EPA requirements or just general requirements under U.S. Customs or the big one that will actually get you in trouble, which a lot of people don’t realize is the FTC or the Federal Trade Commission has a number of regulations of simple things like your company name and address on a package and you with that, they’re the ones who actually end up finding you.

Tomer [00:02:39] Yes. I mean, I used your services and after, you know, doing this the thing and getting the amazing report you sent me, I realize that so many people don’t even, like, know about those things. And when you have that knowledge, it can help you. Also not getting into categories or products that, you know, might give you so much work afterwards.

And, you know, but by you mentioning like air filters and then some other categories, maybe it’s not a good idea to source them as a beginner. You know, maybe when you are more advanced and you have more funds and you have more money, yes, you can comply and have like all the requirements, but with you not really knowing all of these things that could put you in trouble at a later stage. Once you have an item that already sell and you realize that you need all of these things.

I did it after everything, you know, my broker will go going to sell our brand. And she mentioned that, you know, one big part of it is to really have product compliance for your products, making sure that you meet all the requirements of the FTC and the Customs.

And, you know, I always had this in my mind, but even without sending your company, there are big risks of, you know, not complying with them. And I want you maybe you share a little about those risks. From your experience, what could happen if you’re not complying and what are the consequences of this?

John [00:04:14] Well, I mean, going back to the let’s the scenario of the air filters, because this is top on my mind right now. I’ve got another client who actually has an air filter and they offer a filtration unit, which is, you know, your standard. It’s got a fan and it’s got ionizing metal blades in it and it makes claims to remove allergens, dust, mold, even bacteria. And that is an EPA regulated device. They call it a pesticide or device. And so the EPA actually saw this coming in. U.S. Customs will alert all these government.

Tomer [00:04:45] EPA would those that oh, I’m.

John [00:04:47] Sorry, the EPA is the Environmental Protection Agency. Okay. So they regulate everything from pesticide chemicals, Clean Water Act and the dumping regulations here in the U.S. as well. There’s these devices that make claims of affecting your environment. Right. So you can do anything that’s going to affect your environment. The EPA probably has some sort of hand in it.

And so right now, these air filter units, for instance, are blocked from even entering the U.S.. Well, and they’re just because they’re missing a registration number and they don’t want you to or I don’t want anybody watching this to think that they should be scared off of compliance or thinking that they’re not ready to tackle a product category, because realistically, a lot of these compliance requirements are relatively simple. And the manufacturers, the original manufacturers are ultimately usually responsible for much of this compliance when it comes to the actual regulations that control the import of goods.

So for instance, going back to the surf filter, this air filter unit is actually it’s produced by a huge global company. This importer actually buys it under license. And so it’s a trademark. And as I said, it’s a global company that makes this thing. So they really should have all of this compliance framework in place. You would think so anyway, right? Yeah.

Unfortunately, the problem is that this importer, this ecommerce seller that’s moving these air filter units didn’t go or didn’t understand the requirements prior to import. So they didn’t go back to this global entity and say, hey, do you have X, Y and Z and can you provide them ahead of time? And that’s why they got into a jam. Right.

But when you think of like higher compliance products, like EPA regulated products or FDA or the Food Drug Administration products like cosmetics, food, medical devices and touching quickly on medical devices that can be anything from your standard bandages to syringes and defibrillators, compliance.

They cover a broad range. But when you talk about items that are in those kind of categories, surprisingly enough, most manufacturers have a lot of this regulatory framework and requirements. It’s just a matter of the importer making sure and following up and understanding what they need from them to import so that they don’t get into this kind of jam.

There’s a simple kind of labeling processes like country of origin or company name and address. Those are things that are really yes, it is the Importer’s responsibility to make sure that they’re on the packaging, but those are the things that really typically get caught in the market once they’re already here. And as I said, the FTC or the Federal Trade Commission earlier, they’re the ones who actually tend to be the enforcement arm that a lot of people get notices of violations or fines, which can range anywhere from a couple of thousand to hundreds of thousands of dollars, surprisingly enough.

It all depends on how much non-compliant product you’ve saturated into the market and what they can prove. So for instance, if you’re an Amazon seller and you’ve sold 100,000 units with non-compliant packaging or non-compliant testing, they can actually charge you infractions on a per such sale range in those sales, even for your past sales.

So they can even go back and up to, you know, five years back and say, you’ve sold this product for five years and you’ve sold, you know, a million units and we’re going to charge you an infraction for each single one. And that can be done by the FTC. EPA the FDA regulates it a little bit differently.

They tend to give you a warning letter first and they say, hey, we’re going to give you 15 days to make corrections. And then if you don’t, then they’ll start putting more, not necessarily fines, penalties, but restrictions on your importation process and your sales. And eventually the FDA will just give you what’s called the red flag notice and say you cannot import anything and that U.S. Customs goes and just says, nope, not bring it into the country. But so, yeah, there is there is a high potential risk, certainly, for some of these regulatory regulated categories of products.

Tomer [00:09:08] Yes. Well, first of all, you know, I always had this in my mind that, okay, if I sold some, you know, units without being like No one, catch me, I’m fine. But what you said now, it’s really concerning. And, you know, it’s actually make it more important. Like you have to comply. You have to do all these things like, you know, people making it seems easy like to start that Amazon business and it is easy like it’s relatively you don’t need to invest a lot, but people are not aware of those things. And that’s, I think, very important that you’re here like sharing and explaining all of this information. And you’re right, like, yes, sometimes you will deal with factories that comply with certificates and all the approvals and lab tests that they need to do for their products.

Like I’m selling on my other brand, which is like a toys brand. I didn’t you didn’t work on it, but it’s a brand toy. And one day Amazon just woke me up and telling me, Look, you have to provide us this, the CPC, CPC for my truck and then a lab test for each product.

So I contacted the factories and they, you know, because I made customizations and changes. They of course didn’t have the lab test. So I have to do it from, you know, from the beginning. And some of them didn’t really reply. So I have two products that I have no lab certificates, their stock, I have inventory on Amazon, I have inventory at the warehouse and these factories that kind of disappear, they don’t want to help me with that.

Yes. I’m going to do it with like independently without them, but it’s really annoying. And if I knew all these things before, you know, I could do things differently. Now, one of the checklists or the process that we do is if there are comply, they have all these things and, you know, maybe you can share, like you mentioned, country of origin. This is something that I know most of the sellers are having because the phrase for there is will actually check IDs for them and see if they don’t have the country of origin.

It’s too risky for them to ship because it could hold the entire container for them. So there are like they’re checking this thing and other things I can share from my experience that they had like is silica. Jill Beckett in one of my products and they make like really big troubles getting it out of China apparently where they’re working around of shipping it from a different port, which worked.

But then the next shipments, they didn’t put the silica gel. But like do you have like more examples of things like little things that could really make big troubles, like the silica gel or country of origin or distributed by like what is defined for like if you don’t have the distributed by like and then you company name the address and all of that like is that serious or you can get away from it or.

John [00:12:05] Why wouldn’t so you can get away from it. I would absolutely recommend that you have it because under the FTC’s Fair Marketing and Packaging Labeling Act, you have to have either manufactured by, distributed by or imported by name and address one of those three parties of interest right now, the FTC, whether or not they’re going to assess you $1,000 intro fine, or they’re going to charge you, you know, $100,000, it’s really going to depend on what kind of risk they see with you, what your saturation of the market is.

You know, obviously, you do have some recourse with, you know, claiming as a small business and asking for some sort of provisional relief. But hopefully you don’t want to get to that point. Right. The idea is that you don’t you don’t want to get to the point where you have to ask or petition for relief from a fine.

You want to be able to avoid that ahead of time? Yeah, I would absolutely recommend that you always have just those two at least basic requirement information pieces, the country of origin that’s required by not only U.S. Customs, but also FTC, and then manufactured by a distributor by imported by one of those entity named addresses, you know, going back to like little things that can really cause some major headaches that a lot of people don’t understand are things like lithium ion battery cells. Right.

For instance, when they are incorporated in electronic item, they’re actually regulated as a hazardous material or a hazmat code for shipping. And a lot of people. Yes, you know, there’s lots of things that go without notice, without proper labeling and so forth. But all it takes is that one time for that freight forwarder to recognize that this has lithium ion batteries in it and then require it needs a sort of certification for testing to transport because it’s considered a hazmat, the actual handling and only certain carriers can take it.

This is probably what came with your silica gel or it’s a hazmat good. And maybe the authorized carrier only operates out of the other port. And so that’s why they had to move it through there. But again, those are little things that could either. At the worst case, they hold up the shipment. Right. They hold up the shipment. They cost you a whole lot of money and it’s just time invested and so forth.

You know, that’s really the worst case when it comes to the ship for smaller has markets the best cases. Yeah, it goes through without a hitch. But then do you really want to take that chance continuously? Because you never know when. It’s like the sword of Damocles hanging over your head, you know. It could fall at any moment and hit you with penalties, fines, just, you know, headaches, cost. And nobody wants that, right? Everybody wants logistics to move quickly in and out.

Tomer [00:14:53] Yes, I think that’s true of for toys. I know I know personally a lot of sellers doing toys. And, you know, you have a lot of liability with toys. You know, like what are the requirements for toys that you can share with us that are the main ones that.

John [00:15:15] Yeah, I mean, toys really they have, you know, a big range, right? I mean, toys are what really what the CPSC, the Consumer Product Safety Commission, what they consider toys really is a broader category that you can think of as children’s products. Right. So essentially, anything that sold or intended for use by children under the age of 12 is subject to testing and regulatory.

And that means like clothing items. I mean, you know, even furniture pieces, foldable tables, you know, child carriers, toys are the ones that are just generally thought of as they absolutely need testing. But everything if you’ve got a hoodie, for instance, I had one client who had a hoodie with a cloth string in it, so it basically cinch up the hood around the head. And that was non-compliant because the drawstring extended longer than three inches. And so and they had already produced, you know, 20,000 units of these without understanding the requirement.

So, you know, you really have to understand that it’s a children’s product and anything under 12, it’s going to have something some sort of regulatory compliance testing mandate to it. Now, obviously, that varies between clothing and child carriers, you know, your highchairs, your stools, you know, and then your general toys for entertainment. But broadly speaking, most toys, most children’s products need to be tested for lead in heavy metals.

They need to be tested for phthalates. But when they contain plastics, they need to be tested for small parts. And then there’s also going to be some more than likely there’s going to be some other additional specific testing for whatever that product category is like. If it’s a textile for flammability or if it’s a folding chair for mechanical hazards and pinching and that kind of stuff. So it’s going to be a broad range, but basic, basic heavy metals, lead, phthalates, small parts testing, that’s going to be your basic start of starting price.

Tomer [00:17:17] Is that important? No ever. QUESTION Because when I had this issue, I mentioned before we developed as the Amazon required me to provide, they sent it to like a local lab labs in in China and you know, like, like how did Amazon can actually trust that these labs are giving you like real results is that I mean I know they accepted it but when an issue occurs do I I am obligated to check the lab that they got the reports from is like a known lab or that these actually like approved to do this.

John [00:17:55] Yeah. So they’re the CPSC, the Consumer Product Safety Commission. They go and they have credit laboratories, meaning they actually get the labs that supplies. They certify that they’re okay to test certain standards.

Right. So you can use any lab worldwide. I will say with a caveat there that Amazon specifically, at least last year, they did have this unreasonable requirement that everybody use US based labs. And even though the CPSC doesn’t require you to use a US based lab, it does require you use an accredited lab, but not a U.S. one. There was a lot of flights I got in with Amazon on behalf of clients where, you know, I had to write the letters and explain, look, the CPSC doesn’t need this to be a U.S. lab. You don’t need it to be a US lab, etc.

My advice to a lot of clients now is that if you’re going to use it overseas, talk to them first or see if they have a U.S. presence, meaning that they’ve got like, for instance, SGC or Intertek, which are big laboratories, their global head of global offices around the world. They have offices in China for laboratory testing and they have offices here in the U.S. Those seem to provide some sort of relationship or a shared server or cloud server where they have their.

Standard testing store for all of their items. And Amazon seems to have some sort of connection with them or ability to view the US based labs servers. More than likely, they’re probably held on Amazon servers since Amazon is the largest server provider.

So they probably are able to go into their own servers and take a look at it. But you know, without any proof of that, I will go to that. But the thing is, is that if you’re going to use that overseas lab, I would recommend that you everyone check that it’s CPSC certified. And number two and see if it’s got a US affiliated lab or subsidy here that may share information because that’s what’s really seems to be the best the best of both worlds.

Tomer [00:19:59] Yeah. Make makes a lot of sense. Okay. No, you know, I feel that, you know, we cover the important things, but if you need to give like a beginner, someone just started the numbers and a tips on what it should really make sure that they have, like we mentioned, the country of origin distributed by. Is there any other point that he really needs to check before e you know, initiate like the first shipment to Amazon?

John [00:20:29] I mean, you know, the thing is, compliance is such a huge category, right? I mean, if there’s if there’s a product on the market, chances are somewhere there’s a regulation that’s going to, you know. Ask some sort of conformity tip. Right.

So, you know, realistically, I would think of as a as a base kind of checklist, I would say, yes, you’ve got your standard label and packaging, right? So your country of origin, your statements of identity. So usually, you know, this is going to say what it is on the packaging.

You’re going to have your manufacture distributed by imported by other things that are kind of out there and outliers that you really should take a look at or make sure that you check are things that are not necessarily federal regulations but are more mandated by the states, things like suffocation, warnings for any kind of plastic bags that you may have, or Prop 65, which is specific for California, which goes beyond the standard elemental and chemical testing and has a whole list of I think it’s up to a thousand chemicals where California regulate regulates that.

Right. And if your product contains any one of those, it has to carry a Proposition 65 warning. And so those are kind of outliers that aren’t known a lot. So definitely check for those things, but also, you know, do your research on it ahead of time before you commit to a product. I think the best thing to do is do your research ahead of time.

Check for potential compliance requirements like boys, textiles, stuffing stuff, furniture articles have other specific regulations, you know, electronics in terms of safety and liability and really do that kind of homework well in advance before you decide to ship. I think that’s going to be your best business practice because nobody wants to get it all the way, even pass through customs and then get it stuck in Amazon. Because Amazon really has taken up this kind of mantle of compliance and they’ve said because they’re a retailer, because they’re so liable for a lot of the compliance requirements as much as they try to stay out of it.

Yeah, they’re the ones are marketing and selling this stuff and so they’re really kind of enmeshed with the compliance of these products. And so they’ve taken up the responsibility just as a, as a private company to reduce their own liability, to make sure that all of their sellers are compliant. So even if you get it through customs, you sell it through, you know, you’ve got it in there on Amazon. Amazon may be the first one to stop you and say, Hey, this is noncompliance.

You need to do X, Y and Z, and at which point now you’ve got to pay extra money for getting it out of Amazon relabeled repackaged you know tested it. It’s that’s the nightmare that everybody should want to avoid. Right. You know, you want to do you want to spend all that money which is cheaper upfront to do the research and then go ahead and get it in there without any hiccups and sleep comfortably at night.

Tomer [00:23:27] Yeah, maybe a couple of years ago you could get away from it like, you know, the pressure on Amazon wasn’t that big like it is now. And, you know, because of that pressure on Amazon, I’m sure that the customs also raised their standards kind of and checking more things.

And, you know, while you talked, I got an idea and it’s something that I do on another area when I, you know, creates packages. And then for new products, I brainstorm with the big brands. So those giant brands there, I’ll be like most likely comply with all these requirements. They are so big that they had to pay and then do all this work. So we can’t because just ordering their product and see how they’re designing their packaging, what they’re putting on their listing and all of that.

Of course, you know, if you have more than one or two items, it is it’s I think it’s a must to use that someone like you, John, to really like to check and make sure that you meet all the requirements. And that’s what I did. And I got an amazing report. Then after getting this report and talking to you, I asked you like you must be on the channel and share this with more people so they understand this because it’s a very important topic. So thank you very much for doing this and for those want to contact you and you know, use your services how they can hear about you and contact you.

John [00:24:49] Yeah. I mean, I’ve got a presence on a lot of different sites but my, my site is Burnham’s logistics dot com. You can go there or send us an email through client services and we can certainly get you back a quote to review your product.

Just talk about NHS codes or if you wanted to set up a console call like this and talk about different regulatory issues and so forth, get some background knowledge. I always like to leave my clients with some sort of knowledge base.

My goal is to try to train up my clients so that they can take responsibility themselves and hopefully not need somebody like me. Right? Every time they’ve got a new product, they know what they need to look out for. They know the pitfalls because that’s really the benefit that I try to bring to anybody that I work with. If I’m the one that you possibly coming to, I mean, I appreciate it. Don’t get me wrong. But my goal is always to try to educate people, right? Because everybody’s got to kind of take this in-house, because ultimately, if you’re an importer of your seller, you’re the responsible party, right?

You know, you can’t push across to anybody else. Even if you tell customers, oh, well, John Brogden sold me, I can do this, this and this, they’re going to say, well, we don’t care, you know. So I really want them to be educated and understand what agencies are going to affect them, what compliance requirements are going to be subject to, and then just the general knowledge about how to import.

Because then you can speak to other brokers, other freight forwarders and negotiate problems that may come up without having to go back to Google or go back to me or go back to anybody else and.

Tomer [00:26:24] That’s very you know, nice of you. And it’s obvious that you like to provide value and you’re amazing. So thank you. Again, I’ll put links down to your website and your contact info. So people interested, they definitely can contact you easily. And thank you again. I hope maybe in the future you’ll be a guest again in this channel. Thank you.

John [00:26:52] Again. Thank you. I’d be happy to come back and we can really delve into a specific topic and you’ll see the wonderful world of compliance, right? Sometimes people’s eyes cross when they see all of the things that.

Tomer [00:27:03] Yes, for sure. Thank you again, John. Have a good one.

John [00:27:07] Thank you to take care of.

About the author

My name is Tomer, and I founded Sourcing Monster to share proven tips and methods that I use every day for my Amazon business to provide value and growth for you as well as you journey through your own business!

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