GPSR: How British Businesses Can Adapt

The European Union’s new General Product Safety Regulation (GPSR), effective 13th December 2024, has sparked significant concern from small business owners in Britain. For many, the changes are proving to be a trade barrier, especially when small businesses are already under pressure.

What is the GPSR?

The General Product Safety Regulation is a set of rules that ensure all consumer products sold within the EU are safe. It introduces stricter obligations for manufacturers, importers, and distributors to ensure product safety at all stages of the supply chain.

Online marketplaces like Amazon and Etsy will have new responsibilities to address the safety of products sold through their platforms. The regulation mandates improved traceability, requiring businesses to keep detailed records of product origin and distribution, as well as clear labelling and user instructions. It also strengthens recall and notification procedures, emphasising swift action in removing unsafe products from the market.

Non-compliance can result in fines and damage to reputation, making adherence to this updated framework essential for all companies operating within the EU.

Understanding the Impact

The goal of GPSR is to enhance product safety across the EU. Northern Ireland, which remains part of the EU’s single market for goods following Brexit, is directly affected. Retailers in England, Wales and Scotland must now comply with these regulations when selling to NI, which includes appointing a compliance officer based in the six counties or the EU.

The new requirements are particularly burdensome for businesses without an NI-based distributor or wholesaler. Outsourcing compliance duties can cost anywhere between £150 and £4,000 per product annually—an expense many small companies cannot afford.

Some British sellers have chosen to cease sales to NI and the EU to avoid the risks and costs associated with non-compliance. For example, London-based clothing retailer Scott Fraser Collection paused shipments, stating: “These are extremely hard to meet requirements for small business, and we, like many others, are finding it very hard to see a way through the red tape”.

Challenges for Small Businesses

For sole traders and small firms, the GPSR presents several hurdles:

• Increased Costs: Compliance-related expenses can hit profit margins.

• Complexity: The rules call for extensive paperwork and clarity about product categories.

• Resource Limitations: Many businesses need more personnel to manage new administrative burdens or the funds to hire third-party compliance officers.

• Uncertainty: Ambiguity around the rules has left many small businesses figuring out how to proceed.

Tips for British Business Owners

Despite the challenges presented by GPSR, there are steps small businesses can take to adapt:

1. Stay Informed

• Join Online Training: The UK Export Academy offers online sessions on GPSR compliance. These resources provide valuable insights into the regulations.

• Consult Guidance: Monitor updates from the UK Government and online platforms like eBay and Amazon, which are working to help sellers navigate the changes.

2. Consider Outsourcing

• Evaluate Providers: Research and compare reputable compliance services. While costs vary, some firms offer flexible packages for small businesses.

• Collaborate with Others: Explore partnerships with fellow SMEs to share compliance resources or split costs.

3. Review Your Offering

• Streamline Offerings: Focus on high-margin products that justify the compliance investment.

• Local Sourcing: Seek suppliers within NI to reduce the need for additional compliance measures.

4. Enhance Communication

• Transparency: Inform customers about potential changes in shipping availability.

• Build Loyalty: Use this opportunity to strengthen relationships with existing customers.

5. Plan for the Future

• Monitor Trends: Be aware of shifts in customer demand and competitor strategies in light of the new regulations.

• Invest in Expertise: Consider long-term solutions like hiring internal compliance experts as your business grows.

For small businesses in Great Britain, resilience is key. Companies can thrive in the new regulatory landscape by staying informed, seeking support and adjusting operations.

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