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Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Rules and Regulations
mattress, as defined in ASTM F293319, is not an infant sleep product covered by the final rule.
2. Suppliers to This Market Manufacturers of infant sleep products are categorized under many different North American Classification System NAICS categories, because there is not a NAICS code specifically for infant sleep products. These items are made by companies that have baby furniture, baby bedding items, mattresses, other durable baby items including strollers or car seats, toys, or general merchandise as their primary business. Businesses are generally considered small per the Small Business Administration SBA size standards if they have fewer than 100 employees for importers or wholesalers, or fewer than 500 employees for most of the relevant types of manufacturers for this rule. The SBA size standard for mattress manufacturing is 1,000 employees. The relevant NAICS codes include:

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314999 All Other Miscellaneous Textile Product Mills 337910 Mattress Manufacturing 339930 Doll, Toy, and Game Manufacturing 339999 All Other Miscellaneous Manufacturing 423220 Home Furnishing Merchant Wholesalers 424330 Womens, Childrens, and Infants Clothing and Accessories Merchant Wholesalers
The SBA size standards for small for the relevant NAICS codes mean that most suppliers in this product category are considered small. A U.S. company that has a factory employing 100 people might be a top 10 supplier in a particular infant sleep product category, but would be considered small by SBA standards. Similarly, an importer with a U.S. warehouse staff of 50 people would also be considered small.
Prior to the recalls of some infant inclined sleep products, large domestic and foreign companies and the larger small companies by SBA size standards were responsible for most of the sales volume for the hard frame inclined sleep products and inclined play yard sleeper accessories. Many of the inclined sleep products were available at big box chain retailers, and a few were available at mattress retailers. The larger companies have recalled or discontinued these products, and most big box stores have stopped stocking them. However, inclined sleep products are still available from small manufacturers and importers, and discontinued items made by large companies are still available from online merchants. Small companies have always accounted for a majority of
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the suppliers of the unregulated flatbottomed sleep products and infant hammock categories. A large number of suppliers exist for these products; the market is fragmented with many sellers.
Many of the products covered by the final rule, particularly the soft-sided products and the products sold by small businesses, are only available online.
The majority of the suppliers to which this final rule would apply are small by SBA standards. At least 60 small U.S.based manufacturers and importers are in this market, as well as 5 large domestic companies, and dozens of foreign companies, some of which ship these items directly to customers in the U.S. via online marketplaces. In addition, more than a thousand homebased businesses supply flat sleep products that would be subject to the final rule, of which hundreds ship from the U.S. Some firms sell these items under multiple brand names and models, including small manufacturers that make store brands for larger companies. The number of importers selling flat sleep products is approximate because the proliferation of online retail makes it possible for importers to quickly change their product offerings based on demand for particular products. The number of foreign companies is approximate for the same reason. In addition to the foreign companies that ship from U.S.
distribution sites, dozens of third-party sellers are on major internet retail sites that ship products to U.S. consumers directly from a foreign country. The analysis in this FRFA focuses on the impact on small U.S. manufacturers and importers that ship from the U.S., as well as U.S.-based home businesses, but the large and foreign companies will also be impacted by the cost of complying with this rule. The large number of companies in the flat sleep products market covered by this rule reflects both a strong market demand for these products and a competitive market with relatively low margins.
D. Testing and Certification Under section 14 of the CPSA, once the new infant sleep product mandatory standard become effective, all suppliers will be subject to the third party testing and certification requirements under the CPSA and the Testing and Labeling Pertaining to Product Certification rule 16 CFR 1107, which requires that manufacturers and importers certify that their products comply with the applicable childrens product safety standards, based on third party testing, and subject their products to third party testing periodically. Third party testing costs are in addition to the costs of
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modifying the infant sleeper products to meet the standard.
For infant sleep products, the thirdparty testing costs are expected to be about $1,500 per testing cycle per model, including both the costs of the testing and the costs of the samples to be tested. This is consistent with the IRFA in the SNPR, which estimated a cost of $1,100 for testing alone, not including the cost of the samples to be tested; we did not receive any comments on the SNPR providing a different estimate. Based on comments received on the bassinet and cradle final rule published in 2013, one-time costs of redesigning a product to meet the standard could be as high as $500,000
for products requiring major redesign.
As allowed by the component part testing rule 16 CFR 1109, importers may rely upon third party tests obtained by their suppliers, which could reduce the impact on importers. In addition, all businesses selling products covered by this rule were already required to certify compliance to general childrens product rules for lead, phthalates, and small parts with third party testing, so those third-party testing costs would not be considered new costs of compliance for this rule.
E. Impact of Final Rule by Product Category The impact on small businesses would vary by product category. We describe each product, provide information on the types of firms that supply the product, and describe the impacts for each product type for complying with this rule or taking action to exit the market sector.
1. Inclined Sleep Products a Hard Frame Inclined Sleepers, Compact Foam Inclined Sleepers, and Play Yard Accessories Since the NPR was published in 2017, some inclined sleep products have been recalled or otherwise removed from the market. However, while resale of recalled products is prohibited, discontinued items that were not recalled are still available on the secondary market, as well as additional physically similar products sold by small companies that were not recalled.
JPMA has two manufacturers that are certified as compliant to the current ASTM F3118 standard for inclined sleepers. While larger companies have removed most of their inclined products from the market or remarketed them as chairs or loungers, some smaller importers and foreign direct shippers still offer them as sleep products. Some play yards with inclined sleep
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