General Product Safety Regulations and Amazon

There’s a big problem coming up connected to the EU’s intention to introduce a tighter regime for product safety. This will be by means of a regulation which, unlike a directive, will not need national legislation to transpose it into domestic law. It will have a direct effect in the EU and crucially also in Northern Ireland as of 13 December this year.  Among other things, the new rules say for most non-food products coming into the single market, a responsible person (RP) will need to be named on the product label. 

This won’t apply to products with harmonised standards, those that carry a CE mark, but virtually everything else will need to comply.

The new General Product Safety Regulation is said to be designed to address safety challenges posed by new technologies and online selling. It also seeks to provide market surveillance rules for non-harmonised products similar to those for harmonised products.  The regulation replaces the older General Product Safety Directive (2001/95/EC) which was incorporated into UK law in 2005. A lot of what is included is already being done anyway.

However, although the new GPSR won’t apply to Great Britain, it’s going to have a huge impact on a lot of Amazon sellers. A few days ago, Amazon sent a message to all its sellers:

It says: “If you sell non-food products in the EU and Northern Ireland, you’ll be required to meet General Product Safety Regulation (GPSR) requirements in 2024. On December 13, 2024, the GPSR will introduce new requirements for most non-food consumer products” (added emphasis).

The note goes on to explain in general terms how to comply including appointing an EU Responsible Person (RP) for each product in online listings whose contact details must appear on product labels and online listings from 13 December.

Effectively, there are two types of Amazon sellers, FBM and FBA. FBM is Fulfilled by Merchant which means the items are listed on Amazon but shipped by the seller. FBA is Fulfilled by Amazon where goods are not only listed on Amazon but also held in one of Amazon's 30 or so UK fulfillment centers and when a customer orders, the items are picked, packed, and shipped by Amazon.

Pre-Brexit, if you sold goods in Europe, Amazon would hold FBA seller's items in continental fulfillment centers, transferring them by groupage as they thought best logistically. When the Trade and Cooperation Agreement came into force in 2021, Amazon stopped shipping these goods and made the sellers responsible for getting goods into the EU. 

Some did, many didn't and simply switched off EU countries in the seller's dashboard to avoid all the hassle for what may have been just a small percentage of sales.  Problem solved.

Now the GPSR rules threaten a similar issue for Northern Ireland but this time FBA sellers can't switch off sales into the province because that isn't an option on their dashboard and it would have massive political implications if it was.

So, FBA sellers who up to now are only servicing the UK market will have limited options. The first is to appoint an RP for each product (and some sellers have hundreds of products) which, according to Amazon, can be:

• The manufacturer or brand, if established in the EU.
• An importer established in the EU.
• An authorized representative established in the EU, who is appointed in writing as the Responsible Person by the manufacturer or brand.
• A fulfillment service provider established in the EU, if no manufacturer, importer, or authorized representative is established in the EU.

There are companies based in the EU who will act as an RP based on an annual fee for each product listed, but the costs could easily outweigh any sales into Northern Ireland. The second is to switch to FBM and explain in the listing that you don't ship to NI, accepting any blowback from NI customers.

The third option is to accept the costs and try to recover them by expanding into the rest of the EU, taking on all the freight and customs handling to get their items into Amazon fulfillment centers in the single market.

Bear in mind that according to Jungle Scout, a US search and market analytics business providing intelligence for companies selling through online marketplaces, around 80% of Amazon's 280,000 UK sellers use the FBA process. It is not a small problem.  Of course, the government could also find a workaround in the joint committee that oversees the Windsor Framework, but at the moment that isn't an option.

Amazon's guidance warns: "We’ll remove listings if we find they aren’t compliant with the GPSR on December 13, 2024."

So, the clock is ticking on another Brexit-related problem.