One of the most frequent points of discussion with distributors this past week during the course of the PPAI Expo was the perceived threat of Internet direct business. As is the case across many industries, the traditional supply chain of supplier/distributor/end-user client is being challenged by distributors who are online only, as well as by customers motivated primarily by price.
At QCA, our concern is not with the commercial aspects of online sales, but rather with the safety and compliance of promotional products—whether they are purchased online or off. There were several references at Expo to the Chinese e-commerce site Alibaba, most along the lines of, “you can get almost anything there,” as well as broad inferences across the board that the site is generally less than diligent when it comes to safety.
As mentioned in a New York Times article this past week, Alibaba has been known to sell almost anything—brand merchandise, fake merchandise and, occasionally even items considered dangerous. This includes the wholesale selling of items that have been recalled within the last year, notably the rare earth powerful magnets we have mentioned several times in this space. That’s why the announcement last week that the Consumer Product Safety Commission (CPSC) and Alibaba were working together to prevent illegal and/or recalled products from being sold on the Alibaba platforms is worth noting. The company has established a direct line of contact with the CPSC and pledged to work swiftly to remove non-compliant product.
Even in a “good recall,” the CPSC has acknowledged to ABC News that at least 80%—and perhaps as high as 95%—of recalled products never come back, and many are ultimately then sold online or in stores. The Alibaba partnership with the CPSC made an industry stir last week but, according to my colleague Dee Fenton, vice president for compliance at QCA, this kind of cooperation was already going on elsewhere.
“The fact is that Amazon, eBay, and Craigslist are all ‘working with’ the CPSC, too,” she said. “The CPSC has a division that monitors e-tailer websites for recalled items or items known to be non-compliant (i.e. youth sweatshirts with drawstrings, certain high power magnets, etc.). The objective is to avoid having these products reach the market.” So, as the Internet direct business continues to evolve, it will certainly be interesting to see how companies like Alibaba and the others work to embrace compliance and keep consumers protected. As you might imagine, it’s something we’re paying close attention to.
On another front, while at the PPAI Expo, in collaboration with our Distributor Advocacy Council, we sponsored an informational breakfast for 24 potential supplier applicants. It was a spirited conversation, much of which was focused on the business advantages of committing to the hard work of achieving QCA Accreditation. Calculating the ROI of accreditation is not always black and white and it’s not always an easy task. But, in one case at the show, it was an easy case study in the value of accreditation. Seville Gear, the McFarland, Wisconsin-based supplier of duffel bags, coolers, padfolios and totes, was accredited on Sunday, just before the show opened.
Mike Jarrett, president of Seville Gear, picks up the story.
“When we considered going through the QCA Accreditation process, we knew it was going to take time, be hard work, and that we would need to allocate the resources necessary to achieve it,” he said. “For Seville Gear, the decision had to have a clear return on investment. We expected to write additional orders based on the market differentiation value and awareness. We knew that distributors were making accreditation a gateway to preferred supplier status, but I didn’t expect the results so quickly. Before we could even leave PPAI, we had discussions with three top-tier distributors about their preferred vendor programs, and these were companies we had not even been able to get in the door with before.” What a great success story—and we so appreciated Mike and Seville for sharing it.
As a pet lover, I’ll make a final point about recalls that is close to my heart. I was really surprised to learn the low percentage of recalled products actually returned by consumers. Petco recently announced the removal of all Chinese-made dog and cat treats from its shelves following the death of 1,000 dogs, and the chain ended the sale of snacks in 2014, and intends to cease the sale of all pet treats made in China by May of 2015. Although the Food and Drug Administration has not established an exact cause-and-effect relationship between the deaths and specific products, if you’ve given your pet jerky treats, be aware that the complaints center around many different brands, but primarily involve chicken jerky and treats featuring chicken or duck jerky wrapped around yams, dried fruits, or sweet potatoes. The current labeling restrictions do not require a control of origin to be identified for every ingredient, and packages that don’t state a product is made in China still might contain some ingredients sourced from China or other countries. Bottom line, exercise extreme caution when buying treats for your cat or dog and keep an eye out for vomiting, lethargy, diarrhea, and increased urination or water consumption.
