Why Manufacturers Selling Directly to Consumers Harms South Africa’s Economy
In South Africa’s office and school furniture sectors, a growing number of manufacturers are bypassing established suppliers and showrooms to sell directly to end users. While this may look cheaper on the surface, the long-term impact on jobs, small businesses and the broader economy is negative and unsustainable.
The Problem: Manufacturers Competing With Their Own Retail Partners
Manufacturers exist to produce quality goods at scale. Retailers and suppliers invest in showrooms, sales teams, customer support, delivery, installations and warranties. When a manufacturer sells direct, it uses its production advantage to undercut the very partners responsible for building the market and serving customers nationwide.
- Fair competition erodes: retailers cannot match factory pricing while bearing service costs.
- Service quality drops: fewer local showrooms and support teams mean poorer after-sales care.
- Investment slows: entrepreneurs avoid opening new stores in an unfair channel landscape.
Economic & Social Consequences
- Job losses across sales, logistics, warehousing, installations and customer service.
- Reduced tax base as fewer independent businesses operate and grow.
- Market concentration when plants also own retail outlets, increasing monopoly risks.
- Lower consumer protection where direct sellers avoid the accountability of established retailers.
Where Government Policy Falls Short
South Africa lacks clear, sector-specific rules that separate manufacturing from retail in furniture categories. In a country battling high unemployment, this regulatory gap indirectly rewards channel conflict and penalises job-creating suppliers with showrooms and service footprints.
Policy perspective (advocacy): We support legislation that limits direct-to-consumer sales by manufacturers in office and school furniture, protecting jobs and ensuring fair competition. The proposals below reflect a pro-jobs, pro-SME stance for public debate and do not constitute legal advice.
What a Fair Law Could Include
- Role separation: restrict manufacturers from selling directly to end users in defined categories.
- Conflict-of-interest rules: owners of manufacturing plants may not own or control retail outlets.
- Enforcement: meaningful administrative fines, and for repeat offences, licence suspension or revocation.
- Transparency: mandatory disclosure of channel policies and relationships to prevent covert self-preferencing.
- Support for SMEs: incentives for retailers maintaining staffed showrooms, regional service and installations.
Why Supporting Retail Suppliers Matters
Each purchase from a reputable supplier sustains local jobs, skills and tax revenues. Retailers provide consultative space planning, ergonomic advice, assembly, warranties and long-term support that factories are not set up to deliver at consumer level.
If you need help with office furniture and seating, choose a partner with real people, real showrooms and real service.
Frequently Asked Questions
Isn’t buying direct always cheaper?
Any short-term saving can be offset by higher risks: wrong specifications, no space planning, limited after-sales support and shorter product lifecycles. Rework and downtime cost far more than a small retail margin.
What about schools and public sector projects?
Transparent, competitive procurement is best served by a healthy retail ecosystem that can deliver at scale, provide installation teams, honour warranties and offer ongoing support near the site.
What can consumers and specifiers do today?
- Request quotes from established suppliers with service footprints and references.
- Insist on installation, warranty and after-sales commitments in writing.
- Support companies that employ South Africans in sales, logistics and support roles.