Dealing with the FDA and licenses
Mar 18th, 2009 Posted in Selling your Stuff | no comment »I was asked recently by a new lip balm and lotion maker about business requirements. I thought I’d pass along to you a bit of the conversation because it effects everyone in the USA who sells their products.
Hello
I have been making and selling solid cocoa butter lotion bars since
November. Tons of them, as well as lip balms and chapsticks.
I have been asked a couple times recently if I have to worry about the
legalities of selling these types of products. Are there are FDA
standards or licenses I have to have?
Homemade Beauty Products
The answer to that can be very complex, but in a nutshell: Sort of.
The Food and Drug Administration in the USA will have jurisdiction over you if you sell across the state line. If you are selling your items just within your own state then they do not have control over what you do and do not do. It is, however, a VERY good idea to follow their recommendations because they have you and your customer’s interests at heart. They want things clean, products to be clean and safe and labeled properly. So even if you do just sell within your own state, you should follow their regulations the best that you can.
The FDA does not issue licenses. It is a voluntarily thing for the most part. They have laws and they expect you are following them. If you do something wrong and they find out about it, they will pay you a visit. If you are working from your home, you have the legal right to tell them they cannot enter your property. If you are working from a public place, then you do have to let them in and comply with their requests.
The worst case scenario is you are doing something improperly. They will tell you what that is and what you need to do to comply. If you do not comply, they can and most certainly will confiscate your paperwork, products, labels, brochures, etc. And that’s about it.
There are some things which are exempt from the Food and Drug Administration’s control in the USA. Soap is one of those things. That is why sometimes you’ll see soap for sale and it doesn’t have any ingredients listed on the label (breaking and FDA rule?). It is because soap is exempt from their regulation. Typical pet care products are also exempt, such as pet shampoos. But! And this is a big but for soap makers, if you tell people your soap will have any effect on any medical condition like acne, weight loss, cure cancer, then they will instantly determine you are not selling soap, but you are selling drugs. They do control drugs. You cannot say your soap is going to treat any medical condition and you cannot have any literature in your company that says anything like that. So, it is a good idea to read their regulations and follow them. You can find their cosmetic laws at fda.gov.
But, the FDA is not the only thing to be concerned about in business. You need to have your proper local and state licenses to operate a business. There are some states who have their own cosmetic laws. You should probably ask your local business license office if your state is one of those states. Usually your local or state business license office will be able to point you in the right direction so you can obtain that information.
Lastly, there is something called ‘product liability insurance’. This is insurance in case someone has claimed to be injured by the products you make. Sooner or later, you should have this insurance. Some times there is a rider for home owner’s insurance you can get to cover your homemade goods. Ask your insurance agent about this. When you are first starting out, it is tough to do all that.
I think most people sort of get their feet wet and start out really small in their own kitchen and then see if they can sell their products. Once they see they can make a real business out of it, they start following more rules and regulations, getting their licenses and eventually adding the proper insurances. We all just do what we can. It would be ideal to be able to do it all first, but most people are not able to until they get going so they take some risks in the beginning. Which, doesn’t make it right, but it is the reality of small business startups.
