Reading time: 5 minutes

Any commercial entity that regularly sells goods or services to consumers (meaning they are ‘in trade’) needs to make sure they comply with their consumer law obligations. The law provides specific requirements for consumer products and trader behaviour so that consumers know they are getting a fair deal. If your business relies on e-commerce and has manufacturers ship directly to consumers, it may be challenging to ensure you are meeting these legal requirements. Consumer law will also apply to your manufacturers, but that does not absolve you of responsibility. For some guidance, this article will go through manufacturers obligations when shipping goods directly to consumers.

Meeting Consumer Guarantees as an Online Retailer

When you sell your products to consumers, the law requires that you meet various guarantees about those products. These help to maintain consumer standards across industries so that your customers have protections available to them. When you sell consumer products, you guarantee that they are:

  • fit for purpose;
  • shipped on time and in good condition;
  • of safe and acceptable quality;
  • the same as your description or sample;
  • priced reasonably in the absence of a pre-agreed price; and 
  • sold legally.

As the product seller or online retailer, you are responsible for ensuring your products meet these guarantees when customers order and receive them. If they do not, then you need to provide a remedy. For example, if a customer does not receive their ordered goods within a reasonable or expected time frame, you are initially responsible for handling that issue. This is because you failed to uphold this guarantee, and you need to rectify the situation.

Meeting Consumer Guarantees as a Manufacturer

Manufacturers obligations include automatic consumer guarantees that apply if they provide consumer goods. Their goods must:

  • match their description;
  • be of acceptable quality; and
  • have spare parts or repair facilities available for a reasonable time after shipment.

“Acceptable quality” means that goods:

  • meet their intended purpose;
  • are free from minor defects;
  • have an acceptable appearance and finish;
  • are safe to use; and
  • will last for as long as can reasonably be expected.

If the manufacturer has any written warranties they provide with their products, they must maintain those warranties for as long as they are valid under consumer law. This warranty begins on the original purchase date of a product.

Avoiding Misleading Your Customers

Consumer law also prohibits misleading your customers, which includes:

This means that when you provide expected delivery times for your customers, you need to be reasonably confident that these are accurate. If you place an order with a manufacturer to ship directly to a consumer, you need to make sure your manufacturer can fulfil your order. This is so that you do not mislead your customers about product availability. These requirements also apply to your manufacturers about any representations they make about stock availability and delivery timeframes.

Whether you are a manufacturer or a retailer, you need to be as transparent as possible with consumers about:

  • delivery costs;
  • potential fees or taxes; and
  • delivery timeframes.

What Is My Business Responsible For?

If your manufacturers are responsible for delivering directly to your customers, you still need to make sure you meet the consumer law obligations outlined above. If you are a manufacturer as well as a retailer, these requirements still apply.

When you sell products to a consumer, you are their first point of contact if something goes wrong. This means that you are responsible for handling any customer complaints, even if the manufacturer and not your business caused a delivery issue. You need to facilitate a remedy for the affected customer in the form of a:

  • repair;
  • replacement; or
  • refund.

You should work with your manufacturer to provide this remedy when you do not produce your goods yourself.

Manufacturer Responsibilities

If your manufacturer ships goods directly to your customers, you should have provisions in your contract with them detailing what they are responsible for should something go wrong.

For example, say that a customer’s order was damaged during delivery. They contact you first, and you refund them the full price of that product. Depending on your contract, your manufacturer would then refund you the cost of the product.

If a customer cannot contact your business as the retailer, they can go directly to the manufacturer for breaching their obligations under consumer law. In this situation, the manufacturer then has to:

  • pay compensation and cover any losses; and
  • honour any warranties they provided with the sold product.

Key Takeaways

If you sell consumer goods through your e-commerce business, then you are the first point of contact for customers reporting any problems relating to those goods. Manufacturers obligations are providing adequate products and meeting any provided warranties. They also need to meet their contractual obligations regarding delivery management. If you would like more information or help with your manufacturers’ responsibility, contact LegalVision’s regulatory and compliance lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What are consumer guarantees?

Consumer guarantees are promises you make as a trader about the products you sell. These relate to delivery, product quality, and product descriptions.

Can manufacturers ship directly to consumers?

Manufacturers can ship directly to consumers. This is common for dropshipping businesses or if the manufacturer is also a retailer.

Do consumer guarantees apply to manufacturers?

Yes, consumer guarantees still apply to manufacturers. There are specific consumer guarantees they promise regarding repair facilities, product quality, and product descriptions.

Are manufacturers responsible for the goods they ship directly to consumers?

If the retailer is not available and something goes wrong during shipping, then the consumer is entitled to go to the manufacturer for a remedy. Even if they go through the retailer for a complaint, your manufacturer may owe you contractual obligations if you are the retailer.

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2019 Top 25 Startups - LinkedIn
  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards