Cosmetic Product Recall Procedure

cosmetic product recall

Do you know how to responsibly execute a cosmetic product recall? There’s been some buzz recently in the clean beauty space after a well-respected, independent brand discovered that one of its most popular formulas isn’t stable. The development hit the airwaves last week, though the product has been beloved by editors and clean beauty fans from coast to coast for several years. The artisan took to their Instagram account and email list to announce that they’re temporarily halting sales while they investigate and reformulate though they stopped short of declaring a recall. I appreciate that this is a teachable moment for our industry, providing an opportunity  to shed some light on the best cosmetic product recall procedure.

 

How to Responsibly Execute a Cosmetic Product Recall

 

cosmetic product recall

 

A graduate of my cosmetic GMP class put the situation on my radar the day after our graduation, and I found the timing ironic. By way of background: I have both a depth of knowledge and an intense passion for the safety of natural cosmetics and ensuring a bright future for those who are pioneering this space. I spent fifteen years bootstrapping my beauty brand, implementing quality control systems, and building GMP-compliant production protocols. And I walked both the halls of Congress and the corridors of the FDA  for several years, working as a small business advocate to encourage government stakeholders to keep small, independent beauty brands in mind as they craft new federal legislation. As a consultant to makers and product designers, I now teach GMP principles to other beauty brand owners.

 

Product recalls are an unfortunate reality of modern consumerism, and product recall examples are abundant. But there’s a particular cosmetic product recall procedure that needs to be followed.

 

MY CONCERNS WITH THE RECENT SCARE FROM A POPULAR INDIE BEAUTY BRAND

There’s a whirlwind of confusion about the requirements for creation and distribution of personal care products within the United States. I engaged in direct dialogue with this beauty entrepreneur during her announcement and our conversation only deepened my concerns.

  • She elected not to use the word “recall” in any of the announcements that I could locate. That’s a critical keyword for this process and clarity is key.
  • The message to customers included romanticized verbiage like “bloom” and “mild fermentation” rather than clear terms which accurately describe what’s happening with those products: mold and contamination. She later conceded privately that she made “some language mistakes.” While my recommendation for an updated statement with clear language apparently fell on deaf ears, I remain hopeful that she’ll make an additional public statement with clear instructions for her customers.
  • When the brand owner addressed my concerns in the comments section of her Instagram post, she mentioned that she’d sold tens of thousands of units of this particular product over the years and affirmed that it “has always challenge tested stable.” She later reached out to me privately and said that the company was “undergoing challenge testing for all of [their] formulas as required by the EU regulatory system.” Those statements are contradictory and lead me to wonder if she understands the nature of these tests and when/why they’re required.
  • When customers inquired on Instagram about whether the product in their possession was safe to use, the company expressed that continued use was “at their discretion.” Both those who hadn’t noticed mold and those who spoke of scraping the mold off the tops of their face mask received that same information. *shudder*  This approach jeopardizes the health of customers while exposing the company to legal liability that’s simply not worth the cost of saving face.

 

BALANCING OUR DESIRE FOR NATURAL BEAUTY WITH THE PUBLIC’S NEED FOR SAFETY

 

Cosmetic Product Recall Procedure

 

Over the past few years, a host of bad actors have invited unwelcome attention and a sense of hysteria about cosmetic safety. I’m looking at you Claire’s, WEN by Chaz Dean, and Brazilian Blowout.

 

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An Interview with Max Rhodes, CEO of Faire

Interview with Max Rhodes

An Interview with Max Rhodes, CEO of Faire

 

Over the last few months, I’ve been exploring the Faire wholesale marketplace (formerly Indigo Fair) in an effort to help readers determine if Faire is right for you. In an interview with Max Rhodes, the CEO of Faire, I invited him to the table to respond directly to some of my findings and the feedback gathered from the artisan community. I’m honored that he took me up on the offer and I’m eager to share our conversation about the pros and cons of Faire, alongside Max’s thoughts about the evolution of the wholesale landscape.

 

I’ve published Max’s responses in their entirety without editing.

 

faire interview_max rhodes

 

LELA: What does Faire look for in a maker? What factors do you consider when reviewing a brand’s application?

MAX RHODES: We carefully evaluate each maker that applies to join Faire, and there are several factors that we look at to determine which to accept. Among those are the number of stockists they are currently carried in, the category and quality of products, and their overall brand aesthetic. When appropriate, we will also cross reference a brand’s social media presence to gauge how well their products might sell on our marketplace.

 

QUOTE2

 

LELA: How does Faire vet potential buyers on the platform?

MAX RHODES: Like makers that apply, we also review every retailer to make sure they are a good fit for our marketplace. We fully vet each retailer to confirm that they are legitimate retailers, meaning that they must actually sell goods, ideally in a brick and mortar environment. There’s no shortage of fraud in ecommerce, so we have a team dedicated to making sure that doesn’t infiltrate Faire.

 

LELA: What can you share about the algorithm that predicts a brand’s visibility on the Faire platform? What factors into that algorithm and how can makers maximize their visibility?

MAX RHODES: The recommendations that retailers get are informed by a variety of factors, including: the type of retailer they are, their profile and products, the kind of items they have historically purchased, and conversion rates for a given brand (in other words, whether or not retailers are ordering once they visit a brand’s page and if those items are being returned or not). The recommendations can vary greatly by retailer because they are curated and catered specifically to their business needs.

 

 

QUOTE3

 

LELA: One maker I spoke with raised a concern about tax ID numbers as it relates to her responsibility to collect sales tax. Her concern was that if she’s ever audited by the state, she’ll need to produce the resale certificates from her in-state retailers that prove that those sales were exempted from sales tax. If she fails to do so, then she can be held responsible for not having collected the appropriate tax, leaving her to settle the bill and any related penalties.

As I understand it, artisans don’t have access to that information about their retailers via Faire. How would you instruct her to handle that? Could a Faire artisan contact Faire representatives if they were under audit and gain access to the necessary certificates to absolve them of any tax liability?

MAX RHODES:  Faire is a reseller and all purchases made by it from any Faire.com wholesaler are for resale on its platform and therefore should not be subject to sales tax. Faire exercises commercially reasonable efforts to ensure that any goods sold on its platform are purchased by resellers for resale in their ordinary course of business. As such, sellers should not incur any sales tax liability for sales made on the Faire.com platform. We encourage any maker who is in need of assistance regarding a tax related inquiry to contact Faire’s customer support team.

 

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The Disadvantages of Faire

disadvantages of faire

Over the last several weeks, I’ve been exploring the potential pros and cons of Faire (formerly Indigo Fair) here on the Lucky Break blog. Today I’m sharing some of the disadvantages as part of an ongoing blog series about emerging wholesale marketplaces. While there’s certainly a lot to love about working with this wholesale platform for artisans, there are notable disadvantages of Faire, too. I shared a few of those disadvantages in a previous blog, and I’m back with additional thoughts to help you determine if Faire is the right opportunity for your brand.

 

The Disadvantages of Faire

dowside of faire header image_part2

 

I’m pleased to share that Max Rhodes, Faire’s CEO, graciously provided answers to a tidy list of queries I sent his way. In the final two blogs of this series, I’ll share his responses, my final thoughts, and the results of the Lucky Break community survey.

 

FAIRE FAVORS BUYERS ABOVE BRANDS

There’s a general feeling among many makers and product designers that retailers are getting the better deal when it comes to Faire. They enjoy generous ordering incentives, including free shipping, free returns on first orders from any brand, and $200 cash to spend when signing up through a brand’s Faire link.

 

ERIN

 

However, artisans often believe that they’re getting the shorter end of the stick. We’re enjoying an increase in exposure, but we’re also paying a princely sum (up to 28% of the order) for the privilege of being seen. Thankfully, we’re not saddled with the burden of product returns, though passing the baton to Faire on that front creates separate issues that are worth exploring.

 

SLUGGISH CUSTOMER SERVICE

I frequently hear criticism about slow responses from the Faire team, especially as it pertains to reviewing applications for new makers. Despite those rumbles of frustration, artisan satisfaction with Faire’s customer support team appears to increase exponentially once we gain acceptance onto the platform.

 

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How to Sell on Faire

How to sell on faire

If you want to know how to sell on Faire, then you’ve come to the right place! This blog is part of an ongoing, deeply researched series about selling on Faire (formerly Indigo Fair). The first post, What is Faire?, detailed how Faire works, how much Faire charges, and what kinds of products Faire sells.

 

HOW TO SELL ON FAIRE

 

 

How to sell on Faire

 

In this installment of the series, I’m unpacking some of the nuances of the platform. Because Indigo Fair/ Faire is a rapidly evolving marketplace, it’s important to recognize that this data is accurate as of the time of publication. The Faire executive team is pioneering in spirit and ambitious in scope, so their efforts are an ever-changing experiment. It’s akin to building the runway as you fly the plane, but that’s to be expected when you’re- quite literally- trying to “reinvent wholesale.”

 

Getting started with Faire is deliciously straightforward. Whenever I speak to artisans within the Lucky Break community, the onboarding process is something that earns rave reviews. Co-founder Max Rhodes has often boasted about how easy it is to use Faire.

 

“Makers can apply to join Indigo Fair, and once accepted, they just send us their product catalogue to get their profile up and running. Most makers receive an order within a week, and they get paid as soon as they ship the goods.”

 

HOW ARE ORDERS RECEIVED THROUGH FAIRE?

 

Buyers shop through the Faire interface from a seamlessly curated selection of products that are chosen for them based on an algorithm that considers numerous factors. While only the Faire executives and the software development team fully understand the mechanics of the algorithm, we do have some clues about how the system works. The aesthetics of the shop and the frequency with which any particular brand is ordered factor into which products are displayed for any specific buyer.

 

Faire dispatches an email notification to the brand once a buyer places an order. Brand owners then log into the system to discover several options at their fingertips, including:

  • Accepting the order and selecting a ship date.
  • Editing the item availability to backorder an item.
  • Canceling the order.

 

Payment for orders is settled upon shipment. Because buyers often enjoy trade credit (commonly known as “net terms”) via Faire, brand owners can pay an additional 3% fee for immediate payment. If they choose to agree to net 30 terms to settle the invoice, then they can forego the additional 3% fee. In all instances, Faire guarantees payment even if the buyer defaults on their obligation.

 

HOW DOES SHIPPING WORK ON FAIRE?

Shopkeepers often enjoy free shipping on Faire, and I can confirm that there’s almost nothing that they cherish more than zero shipping fees. But who pays for that?

  • When you notify Faire that an order has shipped, you attach the tracking number for the parcel and notate the shipping cost. This has been the process since Faire’s launch.
  • Faire reimburses for the shipping fees alongside the settlement for the merchandise, according to the schedule you’ve selected. (Immediate payment for an additional 3% or settling the invoice in 30 days for no additional fee)
  • Faire passes the shipping charges on to the buyer unless the shopkeeper is taking advantage of a free shipping special. In that case, Faire absorbs the cost of shipping.
  • In February 2019, Faire rolled out an optional, automated process for printing shipping labels within the program.  This eliminates the need to manually input shipping costs and tracking numbers.  Swing by the Faire FAQ to read more about Faire’s new shipping program.

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Four things you probably didn’t know about big wholesale accounts

Things to Know about Corporate Accounts

Please listen closely, dear makers and product designers: I’m throwing myself at your feet, imploring you not to get stars in your eyes when it comes to corporate retail deals.

 

Corporate accounts are the big, flashy accounts that many makers dream about. These details usually involve multiple locations (sometimes hundreds of doors, sometimes just a few dozen) that are all managed by a singular corporate entity. You know the ones: Nordstrom, Macy’s, Target, Sephora, Paper Source, Dean & Deluca, Anthropologie, Urban Outfitters… there are dozens and dozens of coveted corporate accounts that many makers are itching to crawl into bed alongside.

 

Over the course of my fourteen years as a full-time maker, I’ve done business with many corporate retailers. I’ve also helped dozens of makers navigate these relationships, giving me a unique peek inside the collaborations that so many of us covet. And while I’m huge proponent of dreaming big and scaling up a business, I know all-too-well that corporate retail deals aren’t right for every brand. Before you tee one up, I hope you’ll make certain that it’s a good fit for your business.

 

Things to Know about Corporate Accounts

 

THE BALANCE OF POWER SHIFTS SIGNIFICANTLY WHEN YOU’RE WORKING WITH CORPORATE ACCOUNTS.

These accounts expect you to have a game plan together and they offer far less flexibility than your friendly neighborhood boutique. Why? Because there are a lot of legs on this octopus.

 

The owner is not the buyer. The buyer is not the person who unpacks and inventories the order. And that’s not the person who puts merchandise out on the sales floor nor the person who rings the sale and wraps the parcel for you to carry home. Corporate accounts are highly systematized and the buyer is, in essence, a conductor who’s managing a dizzying number of logistics. They’ll expect you to climb aboard the train and keep your promises in order to ensure that the orchestra plays on.

 

Because these relationships involve more people, there will necessarily be more complexity and more coordination. Corporate accounts often mandate that orders are packaged a certain way, tagged in a particular fashion, shipped on a precise date, etc. They don’t want it a week early and they certainly don’t want it a week late. Working with corporate accounts may find you buried beneath a tidy stack of paperwork and wading through vendor manuals that explain the intricacies of order fulfillment.

 

You’re the sister-in-charge when working with independent stores. You call the shots, informing them how things will be packaged and delivered, and detailing how you expect to be paid.
However, the balance of power radically shifts when you crawl into bed with corporate accounts. They’ll tell you how they do business. You have to decide whether or not you can work within those perimeters and if you can’t, then you’ll need to pass on the account.

 

 

CORPORATE ACCOUNTS BOAST MUCH LONGER TRANSACTION TIMES.

There’s a common misconception that corporate deals are the fastest way to scale an artisan brand. Um, no. Let’s put that myth to bed once and for all…

 

These deals can take many months to bring to fruition. Generally speaking: the larger the fish, the longer the amount of line you’ll need to reel them in. Corporate deals aren’t an ideal solution if you desire is to grow your company quickly. Without a doubt: if a corporate account places an order, then certainly- that will help you ramp up business and scale. But if you need orders tomorrow, corporate accounts shouldn’t be the primary focus of your attention.

 

These deals take a substantial amount of time to nurture and working with these accounts requires a potent combination of strategy and patience.

 

 

THE FINANCIALS OF CORPORATE DEALS CAN BE OVERHWELMING TO SMALL BRANDS.

There’s no doubt that corporate accounts have enormous buying power, which is both good and bad news. Good news? They’re capable of placing orders with commas and zeroes. Bad news? That enormous buying power puts them in the driver’s seat for price negotiations, and they often use it to extract preferential pricing, which clocks in below normal wholesale.

 

And they frequently work on trade credit, too, meaning that they buy now and pay later… leaving you to float the financials between order placement and pay day. It’s good to be king!

 

How would you like be on the receiving end of a $25,000 order? Hells to that yeah, right? What brand couldn’t use a $25,000 cash infusion? But if that $25,000…

 

• Bills on net 90 terms (meaning that you’re paid 90 days after the order is delivered) and
• Your COGS (what it costs you to actually make the product) comprise 50% of your wholesale price…

 

Then you’ll need to round up $12,500 to front that order, with the understanding that you’ll receive a check in 3 months. That’s a bit painful.

 

If you’re a business who’s just beginning to cut your teeth on wholesale, that type of order could translate into major cash flow problems. It might entice you to venture out on a limb that perhaps isn’t yet sturdy enough to support you.

 

On related note: the volumes associated with corporate accounts will likely prove overwhelming for new entrepreneurs and solo makers. You should consider working with corporate accounts once you’ve refined your production process and supply chain, when you have some experience packing out larger orders, and the capacity to finance the order without losing 3 months of sleep.

 

 

CORPORATE DEALS OFTEN HAVE “BUY BACK” CLAUSES.

Buy backs are a contractual obligation that requires a vendor to “buy back” their own merchandise if it hasn’t sold within a specified period of time.

 

Let’s suppose that you’re an apparel designer. Nordstrom places a juicy order with you for Spring of 2017. At the end of the season, your contract may well stipulate that you’re required to buy back every piece of clothing that remains unsold. You’ll buy it at an agreed upon price if it hasn’t sold within the contracted time period and you’ll return it to your inventory.

 

Not all product categories and not all corporate entities have buyback programs but they’re definitely something to keep an eye tuned to. Don’t get me wrong: cashing that first big check is hella fun… until you have to dip into your back account six months after you’ve spent those funds.

 

Please know that I don’t mean to scare you off of corporate accounts. They can move your ball forward in powerful ways. They can deliver big, handsome piles of cash at your feet. They boost brand cachet and build exposure. Yes, corporate accounts carry a host of benefits, but they’re not for everyone. And many of the makers that I see drawn to them like moths to a flame are particularly vulnerable. Each of us should know what we’re getting ourselves into before we dive in with both feet!