Where were you when the iPhone and Kindle were being designed?

Indian Sign
Creative Commons License photo credit: truedudi

As we discussed yesterday, anti-competitive businesses sometimes do “unfair” things.

Occasionally, they commit illegal acts to gain an edge. Commonly mentioned examples include bribing officials to get contracts or have them look the other way on enforcement or quality issues.

Sometimes the unethical things are illegal, such as refusing to sell spare parts to repair shops that compete with the manufacturer’s repair department.

The CPSIA/Mattel inspection situation is an example that surely makes you wonder. Legal (perhaps), but unethical handling by both Mattel and the CPSC.

Ultimately, competitive behavior has two sides. Let’s discuss a few examples…

Where were you when Pittsburgh, Tokyo and Guangzhou were investing in internet and manufacturing infrastructure?

  • Were you talking about how your infrastructure/facilities were “good enough”?
  • Do you (or did you) laugh at the quality of products that say”Made in China”? Do you find better alternatives locally?
  • When other companies moved call centers to India, did you follow suit in order to cut costs? Or did you follow suit because they provided better service to your customers?

Where were you (and what were you up to?) when Apple was designing the iPhone? When Amazon was designing the Kindle?

  • What – besides stare and/or cuss – have you done to respond to those “threats”?
  • If you aren’t the most strategically advanced vendor in your market – what have you done about that this year? Next year, will you be in a higher position strategically than you are now? How will you get there?

Where were you in the 90s when Amazon was investing in the long term, developing their e-commerce platform and despite their youth, doing e-commerce far better than anyone else? Note: “investing in the long term” often called “losing tons of money” on Wall Street.

  • Did you spend any time figuring out how your business could incorporate e-commerce – or if it even made sense to do so?
  • When the Kindle came out, did you buy one to better understand the competition that just popped you in the mouth with a right cross?
  • When Costco and WalMart started offering best sellers at or below your wholesale cost, did you complain about unfair competition or did you do something to make your business a better place for readers to buy books?

Where were you over the last 30-40 years as Wal-Mart laid the foundation for today’s domination? (and then continued to improve upon it – and did so right in front of your eyes)

  • Were you making it easier to buy?
  • Were you making it easier to park and enter your business?
  • Were you making is easier to pay your invoice, shop, ship, get a refund, repeatedly place an identical order, or talk to customer service?
  • Were you giving your customers more reasons than ever to come to your store instead of the local box store?
  • Did you start to build(or enhance) a high-value relationship with your customers that no minimum wage employee in a blue vest could *ever* break?

Where were you when Mumbai built business centers out of slums, trained tens of thousands of workers, and built a modern communications infrastructure?

  • Were you enjoying your existing legacy, built 40-50-60 years ago? (Ask Woolworth where that got them).
  • Were you letting your city or your manufacturing plant rot while holding out for another government bailout or sweetheart contract with a government entity?
  • Did you spend more on lobbyists in the last 5 years than you did on educating your employees?

Where were you when colleges and secondary schools in China and India were ramping up the quality and technological level of the training they deliver?

  • Were you complaining about your school taxes or local school boards?
  • Were you complaining about the parking problems caused by the local university?
  • Were you whining about the foolishness of having a local community college?
  • Did you sigh in disgust after interviewing yet another unqualified prospective employee?
  • Did you complain to your CPA or another business owner about the cost of training your staff?
  • Were you still running Windows 95 in your schools?
  • Were you ignoring the fact that most of the local school’s students are more technologically savvy than their teachers or administrators (much less their parents)?
  • Have you ever looked at the budget for your local school board? For that matter, do they make it readily available?
  • Have you thought to yourself “Yeah, but we can’t do that here, this is *your town’s name*?”

When things go south

When things go south, our culture (I’m speaking of the U.S., primarily) is to find someone to vilify…to blame. Generally speaking, we must point the finger at someone because it can’t possibly be our fault.

You’ll be glad to hear that I can save you some time there.

If you insist on laying blame, the person who can pull you out of it is the same person can blame: You.

Tomorrow, we talk about that and the ROI (return on investment) of blame.

After 3 days, we’re finally going somewhere positive and useful with all of this.

Watch out for those kids

They just don’t know any better and they’re the ones Seth is talking about here.

They don’t know that you’re supposed to dominate your industry and they are supposed to respect your dominance just because your daddy or great-grandpappy started your business 50 or 100 years ago.

They don’t know that they are supposed to adhere to 2, 20, or 200 year old rules that rule your market for reasons no one can remember, much less explain.

All they know is…they can do it better. And without all your baggage.

That’ll be $40 for 2 bags, sir.

But…not all of them have that baggage. Some see past what everyone else is doing.

Like Toys ‘R Us. Yeah, a nationwide box store.

We’ve talked about how the CPSIA has dealt a tough hand to small lot, one-of-a-kind (OOAK) and handcrafted manufacturers of toys and childrens’ clothes (and a zillion other things for kids under 12).

Most of the noise has come from small businesses, even though the big stores have to deal with it too. They have some upside vs the little guy because their lot sizes are large and they can wield power with suppliers. (Or they’re like Mattel and get an exemption…but we won’t talk about that today)

Despite all the inane things that a lot of these big chains do, this one was different.

They were smart enough to do this.

Most big box stores don’t have the brass to do that.

Be different AND better

For example, when most big box office stores have a big sale whose volume is controlled by how much stuff you can cram into a sack, they exclude a bunch of stuff – usually expensive stuff. And they only let you have one bag.

Guess if I wanted to buy enough expensive stuff to fill 10 bags that might tick em off? I guess I’ll just get it somewhere else.

If they had a trade-in sale, they’d normally limit it to 1 item and require purchase from a specific list of replacement items.

Not Toys ‘R Us.  Their trade-in event appears to have no limits.

Just like those 3 kids who just decided to start a company…in your market.

Watering down your message

Apocalyptic Elegance
Creative Commons License photo credit: NyYankee

While grumbling to myself about the effectiveness of the “Making CPSIA testing economics reasonable for small business” population (my name for a number of “us”, not a name this non-group group has adopted), I continue to be disappointed in the actions being taken by Congress to repair the Act.

With that, I think it’s a good time to announce that the political posts here will cease.

I’ve created another blog that is designed specifically to address political and regulatory issues faced by small business.

Why?

I simply don’t want to dilute the message that Business is Personal has stuck to for the last 4 years (yeah, I forgot to mention we had a birthday – what the heck am I thinking?) and frankly, I’ve done exactly that over the last several months.

While it has been a positive for the blog’s traffic, it isn’t the reason why BIP exists. I thought briefly that maybe it should be, as it resonated with a lot of folks (blog traffic has tripled since I started talking about CPSIA).

Despite that, I’m taking that message elsewhere. It’s off topic, mostly.

When I have that “elsewhere” ready to unveil, I’ll let you know. It won’t be too long.

The force is strong with this Congress

For decades, I have avoided getting involved in politics mostly because it has a way of seriously annoying me.

As I hope you’ve noticed, I’ve also avoided getting politic-y here at Business is Personal – maybe with the exception of discussions regarding the CPSIA.

Despite my best efforts, Congress is working overtime to pull me into their world.

And then this morning, I’m talking to a prospect who asks “Do you get involved in politics much?” Hooboy:)

Never fear, however. BIP is not here to be political. I will avoid it at every possible occasion.

Regulation is necessary

Regulation is necessary and anarchy is a pretty bad alternative. The problem is that Congress seems to be working overtime to destroy small businesses, intentional or otherwise.

Those that deserve it, so be it. Most do not, IMO.

It seems fairly obvious that we can legislate the loss of jobs a whole lot easier and faster than we can create them via legislation.

Almost 30 years ago, the Regulatory Flexibility Act (RFA) was put in place to protect small business from a “substantial impact” from new rules put in place by agencies as a result of new Federal laws.

The name sounds all nice and cuddly, doesn’t it? “Regulatory Flexibility Act” Awwww:)

The law requires an analysis of any new agency rule to make sure that it wont significantly harm a substantial number of small businesses. Agency rules implement the enforcement of legislation passed by Congress and signed into law by the President.

Problem: New rules can avoid the analysis if the enforcing agency’s head “certifies” (by publishing a statement in the Federal Register) that rule won’t adversely affect small businesses.

For example, the CPSC (Consumer Product Safety Commission) recently entered official comments into the Federal Register regarding several important CPSIA issues.

One of the things in that Federal Register entry is the RFA certification statement that says the CPSIA “doesn’t impact small business”. In that link, see page 10479, section G where they make all things right with the small business world by simply saying small businesses (even those “evil mommybloggers” who own businesses<g>) won’t be affected.

My Kingdom for Safe, Modern Food!

A new challenge for some small businesses might be HR875, which has an easy-to-like name: the “Food Safety Modernization Act“.

Not even Mr. Peanut would try to convince you that we don’t have food safety work to do.

Like the CPSIA, this law appears to target large food processing facilities, corporate farms, imported foods and so on. After all, you don’t hear about thousands being poisoned from foods purchased at the local farmer’s market.

Just like the CPSIA doesn’t differentiate between moms who sew outfits for my granddaughter and big Chinese factories that import a few thousand container loads of mass-market clothes per year, the FSMA (HR875) doesn’t differentiate between Tyson, Conagra and the guy who owns 9 chickens so he can sell eggs once a week at the local farmer’s market.

Not even the USDA-certified organic farmer escapes the FSMA’s reach.

All your chickens are belong to us

No, that is not a typo.

Finally, there is the new animal radio ID labeling regulation currently National Animal Identification System that is winding through Congressional committees.

Yes, I regularly remind you to measure everything, so I can see the good coming from this.

Except…

The problem with the NAIS, as with the CPSIA and the FSMA, is in the cost of implementation when you compare a large corporate farm to someone who organically (or not) maintains even one head of livestock or 9 chickens.

The point of all of this? You need your trade association. If you don’t have one, start one. If yours stinks, get involved and make it better.

No, it won’t be easy, though fixing an org is easier than starting one.

Working as a Wal-Mart greeter is easy. Pushing the Staples Easy button is easy. If you wanted easy, you wouldn’t have started / bought a business.

These laws can just as easily impact your employer as they can you as a self-employed person, so you’re going to be subject to some of them one way or another.

Get involved.

The CPSIA, Glenn Beck, the Chicken and the Egg

Am I the last so-called journalist in this country? (stupid question, I’m not even one of those<g>)

You may or may not know I write a business *opinion* column once a week in the Beacon – and that isn’t even my “real job”.

What am I talking about? Yes, the CPSIA again.

Rob over at CPSIA Central emailed today and said that Glenn Beck wasn’t covering the CPSIA because Glenn or someone on the show staff says “there’s no public outcry”.

Really? Is that the minimum daily requirement to get a journalist to write a story? I must’ve missed something.

Per Rob’s request, I wrote a letter to the Glenn Beck Show in hopes that they would realize that THEY (the press) are quite often the catalyst to creating that public outcry.

Here’s my letter to Mr. Beck:

Mr. Beck,

My understanding is that you feel there is no reason to cover the CPSIA story on the Glenn Beck Show because “there is no public outcry”.

I suppose that Watergate wasn’t worth covering for that reason, and nor was Iran-Contra or the Lewinsky story, et al. Part of what causes a public outcry is that journalists learn about stories that the public SHOULD learn about and/or SHOULD be upset about – and proceed to educate them via their media.

Isn’t that part of your job?

Honestly, it might be that you just aren’t listening in the right places. You’re a busy guy. You can’t possibly be everywhere and hear about every little story that affects tens of thousands of businesses across the US.

In addition, I suspect a lot of the lack of attention stems from the idea that this really only hurts “mommy businesses” – and the perception is that these “mommy businesses” really don’t do much but keep moms out of the mall and give them a little something to do when baby is taking a nap.

Because those perceptions are so dead wrong, I ask that you do three things:

First: Read http://www.rescuemarketing.com/blog/2009/01/13/strategic-cpsia-awareness/

Notice that this ISNT just about “mommy businesses”, but it reaches out to a substantial piece of the business community.

Second: Google CPSIA and see what you find: 985,000 search results. No outcry indeed.

Third: If you’re really interested in learning more about the CPSIA, read http://www.rescuemarketing.com/blog/category/cpsia/, http://www.thesmartmama.com/bg
http://www.fashion-incubator.com just to get started.

Thanks for listening,

Mark Riffey

Rescue Marketing

406-249-0307

By the way, if you feel like joining the fray, Mr Beck’s email address is me at glennbeck dot com.

Warm chocolate chip cookies and the big difference between you and them

[audio:http://www.rescuemarketing.com/podcast/WarmChocolateChipCookies.mp3]

Almost every day, I stumble upon someone looking for a way to differentiate their business from their competitors’.

Far too often, they try to compete almost solely on price.

Since I’ve beat the dont-compete-solely-on-price drum in the past (eg: all those WalMart posts), so today we’re going to take a different tack.

Is it the steak or the sizzle? Or maybe something else?

Ever been to Sizzler, Western Sizzlin’ or Ryan’s Steak House?

Likewise, have you been to Morton’s, Ruth’s Chris Steak House, Charley’s, Shula’s or Chicago Chop House?

Which would you prefer if you had a coupon for a free meal, or if someone else was buying?

My money is on Charley’s (followed very closely by Ruth’s) – though I have to admit I haven’t made it to Shula’s as yet.

Why? Because everything about the place is simply amazing. The steak, the experience, the service, and so on.

One of the best moments I’ve had with my dad was after a photography trade show (yeah, back in the software company days), where we found ourselves sitting at the bar in Charley’s near the Tampa airport.

If you eat at the bar (almost no one seems to), you get to watch the chefs fire the steak – away from the quiet luxury of the dining room – and you still get incredible service, quite possibly more attentive than the service in the dining room if that’s possible.

What about retail?

Over the last several months, I’ve spent a lot of time talking about the CPSIA situation.

Despite widespread knowledge of the Consumer Product Safety Improvement Act by some store owners, I see very few of them using it as a competitive advantage.

Maybe they’ve been too busy spending time trying to get their Congressional reps/Senators to change the bill. OK, maybe that’s a reason, but it isn’t an excuse. You know the difference, right?

Here’s an example: If you have a newborn and you walk into an upscale handmade baby clothing store and see a sign that says “All of our fashions for babies are tested and certified safe according to the CPSIA”, isn’t it obvious that it plants a seed in the mind of the persnickety shopper?

IE: “Shouldn’t everyone’s stuff be tested and certified safe?” Hmmm. Remember, in a store like that – the persnickety shopper is absolutely the one you *want* in your store.

If you wanted to get really aggressive about it, add “…Do the other stores you frequent care as much about your baby’s safety as we do? Ask them about the CPSIA and their testing and safety certification of the fashions they offer for your child.”

Fresh from the oven

If you have a choice, do you want warm, soft chocolate chip cookies made from scratch that are fresh out of Grandma’s oven, or do you want generic store-brand “chocolate” chip cookies that you know might have been baked a month ago?

I’d bet that you’d prefer the warm cookies from Grandma’s oven.

What about your business, product and service can create a chasm that wide, making it *that* easy to make a decision between your product/service and theirs?

Make a point of focusing on it. Educate your clientele to call attention to it so that they expect exactly what you do/sell if they find themselves elsewhere. You want to be the standard that everyone else has to meet.

DeMint gives CPSIA instructions to small business owners

Look what happens when you step away from the CPSIA bonfire for a couple of days to get some work done…after all, *someone* has to bail out the country, may as well be me.

Senator DeMint from South Carolina is working on some legislative fixes to the CPSIA, but more importantly, in his blog he describes the steps you must take to get support for his changes. 

His common sense proposal to change the CPSIA is also covered in that same blog post. Clarity – a little shocking.

Once again, I’m asking you to call your senator’s WASHINGTON office (not the local, in-state one) as DeMint instructs.

CPSIA 1 year stay granted: Proof of the might of social media for marketing

The letter to the Commission is here and the press release is here.

Good news. Buys some time to get the darned thing right.

Thank Kathleen Fasanella for getting it started, but also thank social media

I’d be lying if I didn’t tell you that the power of social media is what made this happen.

Not directly, but as a viral means of getting the word out and getting a grass roots effort on fire.

Via Twitter and blogs, a fairly small group of advocates found the people and motivated them to call, fax, email and write to Congress and the CPSIA.

Now, if this is proof enough for you, maybe you can find a way to use it as a marketing tool.

Andy Hoffman tells CPSIA whiners to “grow up”

Pop-Tarts ARE Supposed To Be for Kids, Right?
Creative Commons License photo credit: CarbonNYC

Over at PopTort.com, consumer advocate Andy Hoffman says that opponents to the CPSIA need to “grow up”.

I shared this comment with Andy on his blog, but just in case he doesn’t see fit to mark my comment as public, I’ll repost it here. Feel free to join in with your own reply.

Here’s what I had to say to Mr. Hoffman:

You’re only missing one little issue, Andy.

This isn’t about greedy business owners wanting to avoid the lead law.

In a lot of cases, its about stay at home moms who squeeze a second income out of their cottage business and use that as a way to enable them to stay home and be a mom to their kids prior to their kids entry to school.

Some have managed substantial success, doing more than just squeaking by.

These moms (and others) who manufacture organic cotton onesies, tshirts and so forth for infants (along with a litany of other stuff) quite often started making these things *because* of the crap that is sold at WalMart and elsewhere that was found wanting in the environmentally-kind department.

Before you think that I too am just another whiner throwing a tantrum – be aware that I dont own or work for a children’s products business and NONE of my clients are in that category.

What the uproar is really about is giving small businesses who dont have the economies of scale on their side a means of testing that doesnt put them out of business.

When you manufacture (which often means “sew”) something for $6 and tell it for $12, you cant afford to spend $57 to test it. Anyone can see that math isnt going to work.

The big thing that many miss about this law is that it isnt limited to impacting those who make, retail or resell children’s products: it’s the ripple effect throughout the economy from there.

All of those businesses use accountants, lawyers, graphic artists, web site geeks, and so on. All of them will be doing less of that.

To get a full image of the ripple, I suggest you read the post linked to above (in his blog form) and take note that 80% (yes, EIGHTY) percent of the people in the room were standing when I was done asking them to.

If 80% of the businesses in your area are affected by a law that could easily be altered, it might be in your best interest to look at it without wearing the jaundice-tinted Consumer Reports hat.

Small businesses aren’t asking for an exemption and they arent asking for a different set of rules.

All they are asking for is the ability to use the component testing performed by the manufacturer of the lot of cloth, vat of vinyl, etc.

That allows everyone using that lot (etc) to absorb the cost, rather than every manufacturer having to absorb the full cost of the test for every line of items they make from that bolt of cloth and so on.

Thanks.

Your turn: Pay a visit to Poptort.com and let Andy know how grown up you are.

CPSIA: I’m from the government and I’m here to help

Way to go, Brownie
Former FEMA Director Michael Brown

One of the natural reactions to a CPSIA discussion with store owners, manufacturers, the press and other business people that I speak to about the Act is “Oh, the government would never do anything to shut down an entire niche of businesses, especially in this economy.”

Well, they would be wrong.

Take a long, hard look at the 18th Amendment to the U.S. Constitution, ratified in 1919 and reversed in 1933 (depression, anyone?)

Regardless of how you feel about the consumption of alcoholic beverages, think long and hard about how that hurt a specific niche of businesses (bars, breweries, dance halls, distilleries, night clubs and similar), and what the situation has in common with today’s CPSIA fiasco.

It isn’t just about the bars and the drunks. Moms and dads lost their jobs.

I’m from the government and I’m here to help you

Now, are you so sure that the Federal government – or more accurately, Congress – wouldn’t intentionally do something that might impact an entire industry – intentional or otherwise?

That’s what the CPSIA will do to the segment of the children’s product industry that doesn’t depend on massive manufacturing plants in China (clothing, toys, books, you name it).

It might push those overseas plants to adhere to safety regulations (a welcome change from the People’s Republic of Melamine), but it also grants them the power to decimate much of their competition – simply due to economies of scale that finished product testing costs will burden handmade manufacturers with.

The CPSIA *favors* China with its “step-wise approach”

You heard me right. Large scale manufacturers can afford to do the testing. They simply have to raise their prices a little. It’s the little guy, the stay-at-home mom, the cottage industry shop that employs 12 local people – they are the ones whose business gets hammered by finished product testing costs by lot.

“This step-wise approach will impose immediate changes to protect children while giving manufacturers additional time to develop controls to ensure that all children’s products are free of lead.” (see http://oversight.house.gov/documents/20071003152943.pdf)

The reality is that the legislation isn’t limited to toys – even though Rep Pelosi *repeatedly* uses the term toy when talking about the CPSIA. Toys are not the only thing the law controls.

And yes, 6 months might be time enough for manufacturers to “develop controls” – even the small ones – if you gave manufacturers the ability to use component testing for products manufactured after the law becomes effective.

A Scout is no longer Thrifty

If you still think it wasn’t intentional…. Look long and hard at the “simple, commonsense” effort Representative Waxman and Senator Feinstein made to be sure that trouble to make the law retroactive, covering to all children’s products ever manufactured.

Operative text from the letter: United States Senator Dianne Feinstein, California: This language unambiguously restricts not only the manufacture of these products following enactment, but also the retail sale of any childrenâ??s toy manufactured before this deadline.

Thrift stores? Not on their radar. Doesn’t matter if they don’t have any intention of selling lead-infused baby bottles, doesn’t matter if they are a specialty resale shop that only sells clothes made from organic US-grown cotton and wool: they can’t even take a chance, because they can’t afford to test anything given their margins.

Being thrifty could become a lot more difficult if the law stands as written.

I don’t even like “lead” pencils

Again, no one wants lead in stuff made for kids. Likewise, not everyone wants to close their business and go work at Wal-Mart or what not.

Yet that’s clearly the direction that the CPSIA is driving many small businesses because the economics of testing using XRF and digestive technologies couldn’t possibly have been considered in the sphere of homemade products and similar items.

They’re PROUD of what they’re forcing businesses to do, without a second thought to the smaller businesses that will be forced to close or cut children’s product lines because they have no way to reasonably test their products in an economical fashion.

One thing becomes clear when you did around for comments made by the lead (heh heh) proponents of the CPSIA: Small businesses and work at home moms weren’t even on their radar.

And they still aren’t. It hasn’t been that long since the CPSC’s spokesperson dismissed those working against the CPSIA in a derisive tone, calling them “mommy bloggers”.

Be careful. Those mommy bloggers just might buy a swift boat, if you know what I mean.