Subtitle

A personal look at the trails and triumphs of creating a business from the ground up; of starting a business selling what you create.

Monday, April 27, 2015

Aromatherapy Laws in the U.S.A.

As promised I am back to talk about the recent Aromatherapy webinar I attended and its outcome regarding my business plans.

A few weeks ago, thanks to a great Facebook post by The National Association for Holistic Aromatherapy, I found out about a free webinar they were hosting along with the East West School for Herbal and Aromatic Studies. The webinar was about the labeling of aromatherapy products for sale. I have been having an issue deciding what I should include on my own labels so this webinar was timely.

Out turned out to be very informative in a way I was not expecting. I signed up for the webinar in hopes of getting ideas for label design as well as what I should include on my labels. There was no label design elements but there was tons of information on what could and could not be included on an aromatherapy product label as per the laws in the US, Canada and Europe. But since I live, make and sell in the US, that's the information I am going to share here. Its the most complicated as well.

Required label information included: brand name, product name and net size/weight on the front facing labels. Business name and location as well as a list of ingredients should also be included on your product label but can be put on side or back panel labels. Ingredients should be in order of amount used; greatest to smallest; and use their INCI (International Nomenclature of Cosmetic Ingredients) names. INCI was set up back in the 70s by the Personal Care Products Council and is maintained and updated by them. This system is followed here in the US as well as in many countries around the world. That concludes the MUST HAVEs for your product labels; now on to the DO NOTs. What you are not allowed to use are drug claims in your descriptions. This was the hot topic and the one that brought me to a very important business decision.

To explain what drug claims are and why they are not allowed on aromatherapy labels, I will need to explain the drug, cosmetic and aromatherapy laws in the US. So bear with me and do click the links so that you can get a fuller picture. Here in the US, there is the FDA (Food and Drug Administration), who mostly oversees the Food, drug and cosmetic industries. There is some overlap with the the USDA (United States Department of Agriculture) and the FTC (Federal Trade Commission) though. These government entities have stricter laws and rules for the creation, manufacturing, promotion and sales of food and drugs. This is for multiple reasons; the two most important in this instance being fair competition in those industries and also so that consumers have choice and variety without subterfuge. Basically, it's to make it easier for the average Joe to buy what they need and knowing it works as the labeling and marketing says it will. That being said, the cosmetics industry does not have those same rules nor the same amount of oversight. Probably because it is a newer industry comparatively.

FD&C Act, Sec 201(i)
As for products in the even newer aromatherapy industry, those mostly get categorized under cosmetics as far as the law is concerned. One specific law in particular specifies whether a product is the Food, Drug & Cosmetic Act which defines cosmetics and drugs by their intended uses. Even though essential oils, which make up most of the aromatherapy industry, have therapeutic qualities that have been known for centuries, they are at most used in the alternative medical fields. Which is to say most people think of them as a last resort in most cases there. Anywho, I will speculate that this is because essential oils cannot and do not give the same results all the time to most people so they were never seen as big money makers to the pharmaceutical companies. So they were relegated to aromatherapists and massage therapists. Not that there is anything wrong with either of those professions but both are required by law to go through more training than say your average bath and body product maker since they use essential oils for therapeutic purposes which classifies them as working with 'drugs.' 

This all leads us back to what is allowed on aromatherapy labels and what is not. Because the cosmetic industries, which includes aromatherapy, does not have the rules that the Food and Drug industries do, it makes it simultaneously easier and harder to make a living in these areas. It is easier because there is less oversight and almost anyone could start a home business because the fair business practices are suggestions rather than requirements as in other industries. The FDA does not have to approve products before they go on sale. They do not inspect labs or products nor do they require companies to register with them or get any licensing. This is a bit scary as a consumer since it explains people getting infections from some lipsticks and things like that. But on the plus side prices for aromatherapy products that can be used for therapeutic purposes are cheaper than most medications.

FD&C Act, Sec 201 (g)(1)
Now, for the negative side of this from a business owners point of view. We are not allowed to make drug claims on our packaging, websites, etc. The FDA is on the internet too. Drug claims include pretty much any of the therapeutic qualities of essential oils. For example we cannot use the words, antibacterial, antifungal, antiviral, which most essential oils are. You are not allowed to claim that your product has any altering affect on the body, particularly internally. For example, relieves aching muscles, removes scars, expectorant, soothes stomach upsets, suppresses coughs, removes acne, etc. These are all drug claims. You would be claiming that your product does what a drug would do without having followed any of the rules and practices required for selling a drug in the US. There is this huge long list if things you cannot say if you run an aromatherapy business.

Now, there are a few alternatives. You can say things like soothes muscles, reduces the look of scars or acne, refreshing, comforting, etc. Sound familiar? Now you know why every cosmetic ad and commercial sound and look the same. You're welcome. What can and cannot be put on your labels is covered by the FDA under the FP&L (Fair Packaging and Labeling) Act. This is also where the FTC and USDA come in as well. The FTC regulates all advertising of products with the FDA and the USDA regulates the term organic and any organic products under its National Organic Program (NOP) regulation 7, CFR 205. Some of this all goes for the use of herbs as well. Herbal supplements are classified as drugs by the FDA.

Its frustrating that once you've created something that you can only use about a dozen words to describe it, none of which can go in depth about the ingredients true qualities and all of which every other business even remotely similar to yours uses as well. That being said, I understand why. However, as I reiterated back during my first blogging 101 post, I had plans to write ingredient posts giving my followers and customers a look into why I use certain items and their benefits. With the rules about drug claims, I would not be able to do that. I already do not do that in my Etsy product descriptions since when I joined Etsy, they decided that all if their sellers should follow FDA rules.

Now, I was assured that the FDA is not going to come arrest every small business owner during this webinar. Most companies just get a warning or a fine. They don't have time to look for and find everyone. But, some of the big, popular essential oil companies have gotten warnings or fines. After this webinar, I had a choice to make. As many of you know, I have a Scarlet Moon Creations shop on Etsy from which I sell the physical things I create, the majority of which are bath and body products. I use all natural ingredients which means I fall into the cosmetic/ aromatherapy category. I created this shop for a bit of extra income.

What you do not know is that I have struggled with how much of myself to put into this business. You see my ultimate career love goal is to have my own event services business. My bath and body products were to simultaneously help soothe my need to physically make stuff while funding my startup. I've been working as if this business was my end goal and putting my all into not only creating but researching for the benefit of my customers. I'm an all or nothing kind of girl and I want the best for everyone. But, this could be classified as a hobby and if so I would not feel obligated to keep information from my potential customers in order to follow business rules. Honestly, I don't really make a profit on this business and I have decided to just keep the Etsy shop in the hobby category. This way I can focus more on my plans for event services. That webinar really clarified my personal priorities.

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