I've always put safety testing as a first priority since I began to run this company in 1995.
Every order I do is safety tested which is legally required in the USA, Canada, UK and most other countries that you would be interested in selling too.
For years now, there are heavy fines and possible prison time attached to not complying with toy safety regulations. I have a competitor that suggests that you may be able to "get around" these rules. I personally think that's crazy. If you want to save a few hundred dollars to get around rules outlined by US Congress (and most other governments in the World) that is up to you, but I am legally obligated to do safety testing and provide 3rd party documentation from a US Congress approved safety testing lab.
Also, the law states that your sales must be under $1 million per year ($1,052,913 or less to be exact) to be excluded from the safety testing requirements. If a toy company qualifies for this, then you may want to reconsider working with them. Using a toy company with less than $1 million in sales, means you won't have much 'buying' power behind you.
You will also need to consider that the laws can be interpreted in different ways. The powers that be, may decide that the end factory is the "manufacturer" and it should have sales well over $1 million per year, in which case the law you thought did not apply to you and your toys all of a sudden does.
Also, I do toys for clients that ship to Walmart and their rules have become even more strict now with safety testing as recently as late 2013, with updated rules and regulations; specifically with labeling.
I follow strict standards with documentation, labeling, and following many, many steps to be sure your product is ready for retail store shelves.
A retailer is legally liable if they do not ask you for documentation showing that safety testing has been done. Walmart will ask you for proof that safety testing has been done. I know that for a fact.
Monthly I get calls from people I've quoted on their toy and they found a 'better deal' elsewhere. They were promised the toys were safe but when they receive their goods, they learn that proper steps have not been taken. Their toys can't be sold (or given away) legally.
The only reason I have this information available, is to educate people who are thinking about making their own toys. Whether you're dealing direct with a factory (which I'd not recommend these days without years of experience) or using an agent, make sure you have an answer in writing that clearly answers the question.
" Will my production run be safety tested to comply with CPSIA (or your countries) safety regulations by a US Congress approved safety testing lab. And will you provide a legally valid "Children's Product Certification. " I hope this information is helpful.