Following feedback from UK industry that the EU’s updated General Product Safety Regulation (GPSR) had been unclear and difficult to comply with, the Chartered Institute of Export & International Trade wrote to exports minister Gareth Thomas to highlight the challenges faced by small businesses.
The new rules, designed to ensure that products sold via e-commerce platforms are held to the same standard as through other sales channels, have seen many small sellers at a loss as to how to ensure they provide the necessary information on labels and websites, or how to secure a costly “responsible person” in the EU.
The Daily Update spoke to two such business owners to understand the day-to-day impact the legislation has had.
Costly representation
As with previous legislative rollouts, the requirement to secure costly European representation has deterred some businesses from continuing to sell to EU customers.
Sophie Cooke, owner of Imogen’s Imagination, sells hats, fascinators, berets, hair accessories as well as bespoke pieces to customers in Great Britain, the US and, until GPSR’s introduction, the EU. She sells through her own website and marketplace Etsy.
She feared “profiteering” from opportunistic companies and didn’t like the idea of paying a significant sum only for fees to later be reduced: “As businesses race to sign up for this,” she asks, “is there going to be a price drop?”
“Once the initial rush has passed, will prices settle? Will there be new companies coming in?”
Jane Garner, co-founding partner of Deadgoodundies, which stocks 19 brands of men’s underwear and swimwear, and sells to 80 countries worldwide, echoed these sentiments.
She had heard similar concerns from eight of the non-European brands she works with, although with less deliberation: “they just said: ‘no, we’re not doing that’.”
“Why would they pay for EU representation when they are established brands that understand safety but from a base outside the EU?” Garner asks.
Two others were in a position to easily adapt to the GPSR rules – which involve increased labelling requirements to ensure greater traceability – and appoint someone in Europe as their “responsible person”.
Lost trade
Garner says that it took three years to recoup EU business lost amid an increase in regulation post-Brexit, and that GPSR has undone that progress.
“I would say that probably by the end of last year, we've got things back up into Europe by 5-6%.
“It's not that much to lose, but you lose it again and we've invested a lot building it back up.”
Cooke felt left with no choice but to stop selling to the EU. In addition to costs associated with an EU representative, she didn’t feel confident enough about what GPSR would entail for her products to be sure that she could comply.
“I was resigned to turning off Europe, until I could actually make informed decisions.
“I didn't want to rush anything and make a poor decision.”
Like Garner, Cooke says that although EU exports don’t make up a significant proportion of business – accounting for about 8% of her yearly revenue – the decision still means an unforeseen loss.
Practical barriers
Even since making the decision to “switch off” her EU orders, Cooke has still been unable to stay fully compliant, as Etsy’s settings don’t allow her to exclude Northern Irish orders. The marketplace only offers the ‘UK’ or ‘Europe’ as seller destinations, a problem raised by sellers using other smaller marketplaces.
Implementing a fix for her own website was very simple, Cooke reflects: “All I did was select all post codes that begin with ‘BT’ [Belfast] and say that I'm not sending to those addresses”.
“I don't claim to be a ‘techno wizard’”, she adds, “In fact, I’d actively say I’m not a ‘techno wizard’”.
“But I’ve made the change on my website and it’s worked.”
Meanwhile, Etsy announced that it will release its own solution at the end of February, leaving many businesses with no choice but to turn off their shops for over two months or fall foul of GPSR, meaning they’ve lost access to European markets.
Communication breakdown
The first time Cooke had heard of GPSR was in November, just over two weeks prior to its implementation. Rather than an official communication, she spotted a post shared in her marketplace’s seller forum.
The marketplace had only just released its own guidance and sellers were responding to its advice, which Cooke says “had basically just been copied and pasted [from] what was on the Amazon site”.
Garner had more awareness, which increased throughout 2024, but didn’t receive any clear, official communication from government or industry bodies. She says that the pipeline of information flowing from the European Commission to UK ministers and businesses was essentially broken.
“Many of my suppliers knew that something was coming down the line but there was no detail, no transparency about what was to be expected and how it was supposed to work.
“There was no communication with official trade bodies and no communication with companies.”
Speaking of the brands she works with, Garner adds that “some of them knew nothing about this coming down the line”.
Others were aware of the legislation but wrongly assumed that her site could handle the requirements, “they didn't realise that because they're the manufacturers, they have to do it”.
Small business oversight
Cooke suggests this information vacuum reflects the way the SME label overlooks those like herself: single sellers or manufacturers, fulfilling a number of business functions in order to keep selling their goods.
She says that the “crucial part” of the experience was the “lack of support for SMEs”.
“When people are talking about small businesses, up to 10m turnover, less than 50 employees – that's big, and I don’t know how realistic that is.
“Most of my social circle is people like me. One-person businesses, creatives. Businesses making their products, whether that's jewellery, costumes, giftware, whatever.
“We're just the little people but there's a lot of us.”
She thinks that communication targeting these groups is insufficient and that many single sellers fall through the cracks, with communications going out via “official channels” reaching larger businesses, or those at the larger end of the ‘small’ designation.
The sentiment was echoed by Garner, who said not only that regulatory changes need to be translated into actional changes for businesses, but also that their impact should be assessed from a small business and sector specific perspective in the first place.
“Everybody tries to get the rules to fit Amazon and eBay – the big guys – instead of thinking actually, there are all these small businesses who are autonomous and working really, really, really hard to be successful. How does it work for them?
“Together, all these small businesses create a huge online retail sector that could make the UK a lot of money from exports.
“Regulators should do a ‘walk through’ to test the practicalities of their rules and work out how they can be best implemented at this level and scale of business.”
Change needed
Cooke suggests that a way of more effectively reaching smaller businesses would be to target them through social media ads or via email directly, ensuring single sellers are not missed and don’t need to spend excessive time “hunting” for relevant information.
Both she and Garner had sought to educate themselves as much as possible ahead of 13 December, attending expert-led webinars to find out more – Cooke attended three in the two weeks available before the deadline.
She also highlights the language used in official communications as challenging, saying that the “advice wasn't easy to understand.”
“It would say: ‘This condition applies if this article applies’, and I’d think: ‘OK, so now I've got to go and read another article’, and there was no clear breakdown.”
Garner suggests segmenting information about the regulation’s website page by sector and good: “If I could actually go through and select online retail, fashion, menswear, underwear for example, that would be really useful”.
Poor execution
Ultimately, both business owners say they think the intention behind the legislation, to improve safety, is laudable but question its execution.
Both urged ministers to rethink both how regulations will work in practice and how the government can communicate these effectively to businesses, especially single traders.
