CUSTOM PLUSH TOYS - No Re-Quote Necessary

On December 18, 2009 the Consumer Product Safety Commission (CPSC) voted to extend the 1 year STAY on 3rd Party Independent Product Testing and General Certificates of Compliance (GCC) required to be performed and provided as part of the 2007 Consumer Product Safety Improvement Act (CPSIA) law. The STAY of enforcement on this component of the law is in effect until February 10, 2011.

PLEASE BE AWARE THAT YOUR PRODUCT QUOTATION OR ORDER DOES NOT INCLUDE TESTING OR CERTIFICATE OF COMPLIANCE COSTS.

Artistic Toy focuses on product safety from concept design through final production. If you need higher levels of assurance to protect your stakeholders we will provide separate price quotations for 3rd party safety testing and GCC's.

See www.artistictoysmfg.com/toysafety.html for more important news on safety testing procedures, sample reports, and FAQ's.

CUSTOM PLUSH TOYS: Re-Quote Now

Due to the Consumer Product Safety Commission's (CPSC) scheduled expiration of the one year STAY ending on February 9, 2010, Artistic Toy has included Independent Product Safety Testing as part of all product price quotations after December 16, 2007. All custom toy products quoted and ordered after this date will be manufactured after the February 10, 2010 effective date. The further implementation of the CPSIA law will require third party testing for a large spectrum of promotional products.

DELIVERY REMINDER: Due to the Chinese New Year all custom plush toy orders received and approved on or before January 29, 2010 will deliver standard by sea to customers in April 2010. (See article Key Decision Dates to Navigate the Beginning of your 2010 Sales Cycle for details on Chinese New Year.)

We are notifying all customers who have open price quotations for Custom Plush Toys to check back in with clients to see if the project quoted is expected to be in the purchase plan for 2010. If the Custom Toy project is a 2010 possibility, we recommend that our distributor customer's contact us (info@artistictoysmfg.com or 888-288-TOYS) to request a re-quote immediately, so that all the required independent safety testing costs can be confirmed and communicated back to the client for inclusion in the final purchase decision.

All open price quotes or pending orders including Artistic Toy stock inventory product line will not need to be re-quoted for Independent Safety Testing. Products manufactured before February 10, 2010 will not require the Independent Product Safety Testing; however, do still require compliance with all other toy and CPSC product safety standards. During 2010 clients can expect to see a gradual increase in stock inventory product prices as older inventory is depleted, and new inventory is manufactured with the required third party safety testing costs.

Independent Product Safety Testing procedures and costs vary due to the complexity of the product design and could range from $500 to $2,500 based on the components of the product. (See article CPSIA “STAY” or “GONE” for more details on how to approach safety testing with your client.)

CPSIA “STAY” or “GONE”

One major pain point that could cause frustration for salespeople in 2010 is the February 10, 2010 CPSIA “STAY” or “GONE” decision by the CPC. Many manufacturers and distributors will be lobbying for the CPSIA "STAY" extension that is expiring in February. Every industry discussion group I have attended indicates that the STAY will be GONE effective 2/10/10, which means the full requirements of the law will go into effect.

All Children’s and Child Care products manufactured after 2/10/10 will require an independent laboratory safety report before it is distributed. Products distributed without approved safety reports will be subject to substantial fines. This is important to salespeople who are thinking about selling stuffed plush toys this year. While your target market is clearly designed to reach audiences over 12 years old, the CPSIA may not support that decision if your promotional strategy looks like duck and quacks like a duck, it’s probably a Children’s Product or Childcare item.

Here are a few of things to expect from your trusted industry suppliers:

1. Increase minimum order quantities to offset the fixed cost of safety testing.
2. Safety testing now a standard component of product unit cost.
3. Separate line item analysis for toy safety testing.
4. Manage product safety from design to delivery including coordination with testing laboratories.

In order to battle this frustration, Artistic Toy will assist salespeople with strategies and case studies to look beyond the plush toy product and see into the exciting world of Character Marketing (TM). A Character Marketing (TM) campaign will provide salespeople the unique selling proposition to provide reasons to increase order sizes and further substantiating the testing costs. Challenge yourself to have a forward thinking approach to the fact that the STAY is GONE. You can seize this opportunity to discretely raise the bar for your client's advertising campaign. Instead of facing this challenge as a road block, use it as a tool to increase the purchase decision beyond a singular product and look at the broader campaign.

While facing the new safety requirements you should also be aware of some of the other challenges that will arise:

1. Increased delivery timing because more samples and approvals will need to be received before products are moved into production.
2. Toy Safety testing is required to be performed by an accredited laboratory.
3. Every product component must be individually evaluated for testing creating a variable price structure for independent toy testing. On average, prepare your client for spending approximately $1,000 to $2,000 for this testing.
4. Pricing for testing varies significantly between accredited safety laboratories.
5. Work with a supplier that understands the testing requirements and the design elements of your product so they can explain to your client's legal departments the requirements and negotiate with testing laboratories so you are not overcharged or delayed in production timing.

This is your opportunity to expand your client relationship and dig deeper into their business strategy. Call Artistic Toy if you need help developing a program that quacks as loud as AFLAC and won’t be stopped by CPSIA.

Key Decision Dates to Navigate the Beginning of your 2010 Sales Cycle

Whether you are an industry veteran or newcomer, this is the time of year that suppliers talk about the impact of Chinese New Year on product delivery. The recognition that that world tilts off its axis for about 30 days can be an uneasy time for those of us in the Western Hemisphere. It never fails that the biggest clients always want to push up against the Chinese New Year and demand orders placed in December deliver before the end of February. We have always advocated on our client’s behalf to encourage the factory to rush the production or stop the workers from going home; however, it is a battle we have yet to win.

There seems to be an inevitable cycle of misunderstanding, frustration, and then remorse with salespeople and clients. In order to better equip you for the beginning of your 2010 selling season, we want to arm you with critical facts and important information about several key dates. You might want to print this out and put these dates and topical discussion points in your sales toolbox to battle the frustrations.

The annual frustration point to address is the February 14, 2010: Chinese New Year. We are fortunate to work in an industry where our clients are not dying on tables. Help yourself avoid remorse by being honest with your deadlines and work with your supply partner as if they have a vested interest in your success. If you don’t feel that way, get away while you can. The other pain staking truth is yes, it is going to cost more. The amazing thing is clients remain loyal and pay more for problem solvers. If your client has an important business problem to solve or key objective to meet in Q1, they will approve the resources necessary to get the work done.

Before you get approval to enlist herculean resources, you should know more about Chinese New Year and critical dates. Artistic Toy’s stuffed plush toy factories will be operating on the following holiday schedule:

• Saturday, January 30, 2010

The last of all the managers and employees will have left the factory to visit their families in different provinces far from the factory’s city.

• Saturday, February 14, 2010

February 14, 2010 marks the first day of the Chinese Year 4,707. You may have wondered why Chinese people live longer than other cultures. It’s because on the Chinese New Year, everyone becomes one year older. There is also an old Chinese secret you should know about. The New Year starts on a different day each year and is shorter than our 365-day year. So the year of the Tiger starts on February, 14 2010 and ends on February 2, 2011, while the following year of the Rabbit begins on February 3, 2011 and ends on January 27, 2012.

• Saturday, February 27, 2010

All of the factory employees, who are likely to return to the factory in 2010, have arrived and are ready to resume production. It’s helpful to know that the Chinese New Year has significant cultural and economic implications on the workers and the factories. A growing percentage of factory workers do not return to the factory after the holiday season every year. So while a majority of the factory is back in operation by the end of February, you can expect to see a slower production line because some of your workforce has not returned and some of the workforce will be new and inexperienced.

• Saturday, March 20, 2010

This is the expected sailing date for the first container leaving after the Chinese New Year holiday. When the factory closes its doors for a month they clean everything off the production line. In the perfect scenario your order molds, proofs, and fabric are all complete and sitting there ready to start production on February 27.

This Chinese New Year calendar can be a big frustration point for some clients; however, if you can communicate clearly the key decision dates below you will reclaim your prowess as the go-to product and campaign planning advisor. Encourage your clients to make quick decisions and get approvals back to you to achieve the following results:

Key Decision Dates

While these key dates are helpful, it’s also good to offer your clients alternatives like a partial order delivery by air freight or an alternative product from our stock plush toy line. Let’s challenge ourselves and our customer service team members to think creatively and provide positive energy into the process we know will consume many as the limitations prevail.

20 Years and Still Having Fun...

This past month Artistic Toy celebrated a very important moment in history. The first employee to cross the 20 year anniversary with the Company.

This is monumental for a small business that has operated under a new name and new management for only 4 years.

Helen Haring of Easton, PA started working for Art's Toy Manufacturing, Inc. in 1989. She has served in many exciting roles including switchboard operator, new employee liaison, quality control inspector, production manager, box packer, t-shirt imprinter, sewer, and product assembler.

Helen has set a standard for hard work and quality control at Artistic Toy. She will not allow anything pass through her department unless she would feel comfortable giving the product to her grandchildren or other members of her family. Helen has an attention to detail and relentless pursuit for efficiency that cannot be touched by anyone. With Helen on our team, we never worry that a rush job or big order will not ship on time.

We asked Helen what was her secret to working 20 years at the same place and she replied without hesitation, "You gotta love what you do!" Helen's simple and yet profound advice inspires all of us find what we love to do and have fun doing it.

Helen has helped me realize that we have more than special plush toy products that needed to be promoted. Some of our greatest treasures are right inside our office doors and if we don't take the time celebrate, we will miss what is truly remarkable about our business. Thank you Helen for all your hard work and inspiration.

Jim Socci
President

Sperm Plush Toy Triggers 7% Duty & CPSIA Exclusion

The U.S. Customs TEAM 717 has determined that they will re-classify some of Artistic Toy's plush toys as NON-Toys because they don't meet the the US Custom's definition of a toy. Our salespeople and customers need to be aware of this because it triggers a 7% duty to be paid on non-toys. The Consumer Product Commission (CPC) and the Promotional Products Industry need to be aware of this due to manufacturers getting conflicting messages from different government agencies. At the same time, more evaluation is required by manufactureres to stay in compliance.

Artistic Toy follows the basic classification guideline that all their products qualify under the Consumer Product Safety Improvement Act's (CPSIA) definition of Children's Toys; "a consumer product designed or intended by the manufacturer for a child up to 12 years of age for use by the child when the child plays"

U.S. Customs uses a general rule of thumb to define toys. "A toy must bring amusement to children or adults to be classified as a toy for US customs importing."

When U.S. Customs, determines that an Artistic Toy plush toy is a NON-TOY then a 7% duty is due. The new Customs reclassification will also trigger Artistic Toy to examine the NON-TOY classification and see if it will provide relief from the CPSIA law.

There could be some potentially good news for customers because it was assumed all Artistic Toy products were Children Toys and would require CPSIA enforcement. Upon further review by U.S. Customs, it was found not all of the products are considered toys. This non-toy ruling triggers some discussion and possible exclusion from the CPSIA regulations.

Below are some products examined by US Customs:

1. Sperm Toy - RULED NON-TOY - Subject to 7% Duty. Customs believes this product will sit on someone's desk, deemed miscellaneous textile product (6307.90.9889 HARM Code), and will not provided amusement of children or adults.

2. Baby Paper - RULED NON-TOY - Subject to 7% Duty. Deemed to be miscellaneous textile product because they couldn’t readily see it as a toy and how it would be played with by infants.

3. Boobie Blanket- RULED TOY - NO DUTY - After physical examination determined that duck head on blanket qualifies product to be toy.

In the case of the Baby Paper and the Boobie Blanket products examined by U.S. Customs clients will be need to comply with both regulations(7% Duty + CPSIA). According to U.S. Customs the Boobie Blanket qualifies as a Toy because the duck head is seen as a toy a child would play with. You might be confused right now; however, could find it encouraging to know that there is a Ruling Database that can be researched and appealed for US customs decisions. Although you should be aware the appeal process can be long and costly.

The client who ordered the Sperm will be unhappy to know they now have a 7% duty to pay; however, they will have a favorable argument to exclude their product CPSIA's regulations because it would fall outside of the scope of the law. (i.e. Children's Product, Children's Toy, Child Care Article)

"Cause".... It Works!!!

The holiday season is coming and your client wants to put together a marketing campaign that transcends community involvement. Take a look at how a national retailer built a cause promotion using a variety of soft stuffed plush toys to help the community, attract shoppers, and increase register sales.

This is a great concept targeting a $5.00 price point that generates a lot of support from customers. This plush toy program has helped contributed to over $126 million raised for children across the country.

See Kohl's website for more details on the program.