Manufacturers Selling Directly to Customers: What Changes and What It Takes
When a manufacturer starts selling directly to customers, three things change at once: the margin on each sale, who owns the customer relationship, and how much of the operation the business now has to run itself. The first two are gains. The third is where most direct-to-customer projects struggle, because a factory that has shipped pallets to distributors for twenty years is suddenly picking single orders, answering emails from the public and handling returns. This guide sets out what changes, what to protect, and what has to be in place before the first order.
The market has moved
Australians spent a record 82.6 billion dollars online in 2025, up 14 percent on the year before, with 9.8 million households buying online, according to the Australia Post eCommerce Report 2026. Buyers now expect to find the maker of a product online and to be able to buy from them. For a manufacturer, that is a channel that did not exist at this scale a decade ago, and one that competitors overseas are already using to sell into Australia.
What you gain
Margin. The distributor’s and the retailer’s share stays with you. That margin funds the operation you are about to take on, so it is a gain only after the costs below are counted.
The customer relationship. You know who buys, what they buy, how often, and what they ask. Through distributors you know none of that. Over time this is worth more than the margin: it tells you what to make next.
Control of the brand and the price. Your products are presented the way you intend, and you decide the price rather than discovering it on a retailer’s clearance table.
Speed. A new product can be on sale the week it leaves the line, rather than the season after a distributor agrees to range it.
What you risk
Channel conflict. Distributors and retailers who have carried your products for years will notice you selling against them. Decide before launch how you will handle it: a different range online, a price that does not undercut them, exclusive products for retail partners, or an honest conversation about which accounts you will keep. Surprising them is the one option that reliably goes badly.
Operations you have never run. Single-item picking and packing, parcel carriers rather than freight, customer service by email and phone, returns under Australian Consumer Law, payment fraud. None of it is hard. All of it is new, and it lands on whoever answers the phone in the office.
Cash tied up in retail stock and packaging. Retail-ready packaging, product photography, a website, and stock held for individual orders rather than shipped in bulk.
What has to be in place before the first order
A store that connects to what you already run. Shopify, BigCommerce or WooCommerce, connected to your inventory or ERP so stock levels are real and orders do not have to be retyped. If orders are keyed by hand into the factory system, the channel will be abandoned within a year because nobody has time.
Product data. Titles, descriptions written for a buyer rather than a trade catalogue, dimensions and weights for shipping, photographs. This takes longer than the website.
Shipping that works for single items. Carrier accounts, packaging that survives a parcel network, rates that do not scare a buyer at checkout. The Australia Post report found 73 percent of shoppers say a good delivery experience makes them more likely to shop online, and 69 percent want a range of delivery options at checkout.
Customer service and returns. Someone whose job includes answering buyers within a working day, and a returns policy that complies with Australian Consumer Law, which applies to every online sale regardless of who the seller is.
Automation for the repetitive parts. Order confirmations, dispatch notifications, stock sync, invoice creation in the accounting system. These are the tasks that eat the office if they are done by hand, and they are the easiest to automate.
Pricing when you also sell wholesale
The pricing question causes more arguments than any other. If the online price is lower than your retailers’ shelf price, you have undercut the people who stock you. If it is the same as the shelf price, buyers ask why they should buy from the factory. The workable answers are a recommended retail price that you hold online and retailers are free to discount from; an online range that overlaps little with the retail range; bundles, customisation or extended warranties that retailers cannot offer; and free or cheaper delivery as the online advantage rather than a lower sticker price. Whichever you choose, write it down, apply it consistently, and tell your trade customers before they find out. Note that in Australia a manufacturer may recommend a retail price but cannot require a retailer to sell at it; resale price maintenance is prohibited under competition law, so the policy has to be about what you do with your own prices, not what you make retailers do with theirs.
Want this as a one-page checklist? Ten things to have in place before you sell direct to customers, on one A4 page.
A worked example
This is a hypothetical, not a client. Take a Ballarat manufacturer of outdoor furniture that has sold through hardware chains and independent retailers for fifteen years. It launches a Shopify store with a range of twelve products that the chains do not carry, so there is no direct price conflict, and tells its retail accounts before launch. The store connects to its inventory system so stock is live and orders flow into the factory’s job list without retyping. Shipping is the hard part: the products are bulky, so the first month is spent finding a carrier and packaging combination that arrives undamaged at a price buyers accept. By month three the online range accounts for a modest but growing share of sales, and more usefully, the business knows for the first time which colours and sizes customers actually want.
Marketplaces as a half step
Marketplaces took 18.9 billion dollars in 2025, 23 percent of all online spend in Australia. Selling on Amazon or eBay before launching your own store is a reasonable way to learn single-item fulfilment and customer service without building a website, at the cost of the marketplace’s fees and its ownership of the customer. Many manufacturers do both: the marketplace for reach, their own store for margin and the relationship. Our marketplace development page covers the setup.
How High10 helps
High10 builds online stores for manufacturers on Shopify and WooCommerce and connects them to the inventory, ERP and accounting systems the factory already runs, with workflow automation for orders, stock and invoicing so the channel does not depend on someone retyping. We also handle custom eCommerce development where products are configured or quoted rather than bought off the shelf. Every project is quoted in writing after a scoping call.
Frequently asked questions
Should a manufacturer sell direct to consumers?
If the margin and the customer relationship are worth more than the risk to existing distributor and retail relationships, and the business is prepared to run single-item fulfilment and customer service, yes. Many manufacturers start with a range that retailers do not carry, which avoids the price conflict.
How do manufacturers avoid conflict with distributors when selling online?
By deciding the policy before launch and telling partners: an online-only range, prices that do not undercut retail, exclusive products for key accounts, or a clear agreement on which accounts stay. The one approach that reliably fails is letting them find out.
What systems does a manufacturer need to sell online?
A store platform connected to inventory or ERP so stock and orders flow without retyping, product data and photography, parcel shipping with suitable packaging, a way to answer customers within a working day, a compliant returns policy, and automation for confirmations, dispatch notices and invoicing.
Is it better to start on a marketplace or your own store?
A marketplace teaches fulfilment and customer service quickly, at the cost of fees and the customer relationship. Your own store keeps the margin and the data. Many manufacturers run both, using the marketplace for reach and the store for repeat customers.
Want this as a one-page checklist? Ten things to have in place before you sell direct to customers, on one A4 page.
Related reading
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