The Wall Street Journal has the tale of a business that succeeded beyond the entrepreneurs’ wildest dreams. They each used their last $1000 to invest in the product, and things took off. It was a goofy product marketed to adult office workers – a bunch of magnetic balls that stick together and make some neat shapes. They never intended the product to be used by children and it was never marketed it to children. But that doesn’t matter. The company is now pretty much out of business and battling the Consumer Products Safety Commission.
In August 2009, Maxfield & Oberton demonstrated Buckyballs at the New York Gift Show; 600 stores signed up to sell the product. By 2010, the company had built a distribution network of 1,500 stores, including major retailers like Urban Outfitters and Brookstone. People magazine in 2011 named Buckyballs one of the five hottest trends of the year, and in 2012 it made the cover of Brookstone’s catalog.
Maxfield & Oberton now had 10 employees, 150 sales representatives and a distribution network of 5,000 stores. Sales had reached $10 million a year. “Then,” says Mr. Zucker, “we crashed.”
On July 10, 2012, the Consumer Product Safety Commission instructed Maxfield & Oberton to file a “corrective-action plan” within two weeks or face an administrative suit related to Buckyballs’ alleged safety defects. Around the same time—and before Maxfield & Oberton had a chance to tell its side of the story—the commission sent letters to some of Maxfield & Oberton’s retail partners, including Brookstone, warning of the “severity of the risk of injury and death possibly posed by” Buckyballs and requesting them to “voluntarily stop selling” the product.
It was an underhanded move, as Maxfield & Oberton and its lawyers saw it. “Very, very quickly those 5,000 retailers became zero,” says Mr. Zucker. The preliminary letters, and others sent after the complaint, made it clear that selling Buckyballs was still considered lawful pending adjudication. “But if you’re a store like Brookstone or Urban Outfitters . . . you’re bullied into it. You don’t want problems.”
As for the corrective-action plan, it was submitted at 4 p.m. on the July 24 deadline. Yet the very next morning the commission filed an administrative lawsuit against Maxfield & Oberton, suggesting the company’s plan was never seriously considered.
Read the whole thing. The product came with explicit warnings to keep it away from young children. But that doesn’t matter to the bureaucrats.
So much for parental responsibility. When my kids were babies and toddlers I had locks on our kitchen cabinet doors, to keep their little hands away from things that could do them harm. There are many legal products out there that can harm children. It’s up to parents to keep those products out of reach. What are we going to do, outlaw everything because some parents aren’t responsible?
Here’s the video report if you can’t access the article.