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Private Label Product Liability: Don’t Get Burnt Importing from China!

By Matt Thomas

Products imported from China account for more than 60% of product safety recalls. If your private label product injures someone, you’re responsible.

Private Label Product Liability: Don’t Get Burnt Importing from China!

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Mark Hetherington

All the advice is all very well but the vast majority of people looking to do something like this are those just getting started, with maybe a few hundred dollars to spare at best. It’s a complete waste of time talking about hiring lawyers and attorneys and the cost of insurance to those people because t just isn’t viable.

Anybody running a decent sized business should already be clued up on the various regulations and requirements, or they should not be in business in the first place.

Matt Thomas

You’re absolutely right, Mark. I’ve read about all the Amazon FBA success stories, too. Some of them are truly amazing.

Unlike other online business ventures, though, importing products and reselling them have a very unique set of risks (versus affiliate marketing, for example).

Compared to affiliate marketing, the upside is significantly higher with FBA. But the downside is almost infinite (e.g. one hoverboard injury could ruin you) and this sometimes gets glossed over by those promoting the “get-rich-quick” design-import-resell FBA model.

Tina Marie Bueno

Very insightful and often skipped over to get an Amazon business going quickly. Thank you for writing the article.

Although it’s not bullet proof, one way to check in advance if a product has been approved by Amazon is to see if there are other merchants already selling it. The product description will most likely say if it’s made in China or imported. Of course there’s no guarantee that it came from the same supplier that the merchant is considering, but it is a possible first step. This only works for private labeled products that are not unique or your patented creation. Or one to exam it first hand.

Another consideration is if the category is gated on Amazon. If yes, then a merchant can read about the requirements and submit their product details for approval before investing in inventory from overseas.

Last thought, if the merchant can find a U.S.-based distributor or wholesaler of that same item produced; order a sample. Then they can see if it is compliant. If it meets all of the regulations required by Amazon, perhaps a smaller MIQ with private label printing would be a great way to start.

Mark Hetherington

I disagree. Affiliate marketing is difficult to do successfully but if you can master it the upside is almost faultless. Nothing to ship, nothing to buy, and no problems with liability. FBA has all those potential issues but the downsides are bad too. You can lose your income overnight if you lose your Amazon account for any reason, and Amazon charge you PER ITEM to return your goods to you.

This actually happened to me through no fault of my own and I lost a business with a six-figure turnover and it cost me thousands to get my stock back. The rewards are harder to come by with affiliate marketing (AM )but at least you have a lot more control and can apply the techniques for any product.

I make less money now than on Amazon, although it’s increasing all the time. I still have another Amazon account as well as an eBay account but as my AM turnover increases I sell less and less physical items.

But the best thing about AM is all you need is a computer and internet connection. You can do it without getting out of bed if you want to!

Mark Hetherington

Just one other point. Amazon relies heavily on search so there’s a chance that unless your product and/or business are already well known you might struggle to even get your items seen at all on Amazon.

Matt Thomas

Which part of what I wrote do you disagree with, Mark? It looked like we were both arguing in the same direction.

Andrea Miller

Any suggestions on where to get product liability insurance for a small business importing clothing from China and selling it online? I have found it difficult to get that insurance. Thanks in advance!

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