There have been a series of significant suits litigated within the past two years involving safety issues and children’s toys.  The manufacturer of a toddler’s climbing toy was forced out of business due to the outcome of a  highly publicized class-action suit involving safety issues of the product.  In addition, the national discount chain Smart-Mart was assessed one million dollars in damages because they sold customers a product that was not certified by the SCPA (Safe Children’s Products Association).  Due to this pivotal case, Smart-Mart has refused to carry any product that is not SCPA-certified.  Most of the major national discount chains have followed Smart-Mart’s lead and have issued similar policies.  Since W4K’s products are all certified by the SCPA, this suit does not have any negative impact on W4K’s business.  In fact, the situation has resulted in increased sales opportunities for W4K, since retailers are actively seeking SCPA-certified toys to fill the shelf space once occupied by the displaced products.

Further laws could be enacted that would raise the safety standard on toys.  If passed the legislation would cause the cost structure at W4K, competitors, and the industry as a whole to rise.  This is not likely because SCPA certification is already fairly strict and all encompassing, but is certainly not beyond a reasonable possibility.