Routes to market in Australia: distributor, broker, agent or direct

The four routes sort cleanly on two questions: who owns the stock, and who sets the price. A distributor buys your products from you and resells them to local retailers, adding their margin to the price. According to the Australian Government's Go Global Toolkit, distributor fees run higher than an agent's because the distributor takes on more responsibility: carrying stock, running marketing, sometimes extending customer credit. Once a distributor owns your stock, decisions you might assume are yours, like the price offered to the retailer, travel with it.

An agent is the opposite structure. Per the Go Global Toolkit, an agent never buys or owns your products. They are paid a commission on the sales they generate, sometimes plus a monthly retainer, and they pass orders back to you. You still deliver, invoice, collect payment and set the selling price. A broker runs the same commission logic, and in practice the labels blur; in Australian food and grocery the commission model is usually called brokerage.

Direct supply means you do everything: the buyer relationship, the new line submission, trading terms, EDI, invoicing, deduction management and the range review calendar. It is the cheapest route on paper and the most expensive in hours, and it is entirely viable. Retailers deal with founders direct every week.

Broker pricing is the most published. The Go Global Toolkit puts broker commission anywhere between 5 and 10 percent, notes that some also charge a monthly retainer, and warns that most brokers ask for a 6 to 12 month retainer upfront when taking on a new brand, payable even if they do not sell your product. That retainer clause deserves more attention than the commission rate. For a published Australian example, food and beverage broker Dynamic Retail Solutions lists its pricing as a monthly retainer or sales commission, whichever is higher, of $5,000 a month or 5 percent for branded product, with less for private label.

Distributor cost is a margin, not a fee, and it is larger because the distributor is running warehouses, trucks and sales teams. The scale is easy to misread. A Reserve Bank of Australia Bulletin analysis of 2007/08 data found that around half the final price of Australian retail goods is the cost of the goods themselves, with the other half covering the gross margins of wholesale and retail firms. In that analysis, wholesalers' gross margins were 16 percent of the final sale price, 14 percent of it the cost of doing business and only 2 percent net margin, about half the retailers' 32 percent gross margin.

The thin net shows up at scale today. Metcash, which describes itself as Australia's leading wholesale distribution and marketing company, earned a Food EBIT margin of just 2.3 percent in FY25, the year ended 30 April 2025, per its results announcement. A distributor's quoted margin mostly funds the work, not the profit. So the question is never whether the margin is fair. It is whether your pricing waterfall survives it: retailer margin roughly 25 to 45 percent by category, trade spend commonly 10 to 25 percent of gross sales, then the route's cut, then freight, before anything reaches you per unit.

Route choice is shaped by market structure, and Australia's is concentrated. The ACCC's Supermarkets Inquiry final report, released in March 2025, estimates Woolworths holds 38 percent of supermarket grocery sales nationally, Coles 29 percent, ALDI 9 percent, and Metcash, standing in for the independent supermarkets it supplies, 7 percent. The same report puts Coles and Woolworths together at approximately 67 percent of supermarket retail sales and found a bargaining power imbalance between Coles and Woolworths and some of their suppliers.

The independent channel is effectively a wholesale route whichever representative you hire. Metcash evidence in the same ACCC report estimates about 74 percent of all IGA purchases run through Metcash, although Metcash banner stores source between 50 and 90 percent of their fresh produce from other suppliers. Metcash reported FY25 Group revenue of $19.5 billion including charge-through sales, with the IGA network taking roughly 60 percent of its total Food sales, per its FY25 results announcement. If you want hundreds of independent stores, you are dealing with a wholesaler at some point, with or without an agent or broker in front of it.

The rules around the biggest counterparties changed recently. The remade Food and Grocery Code of Conduct started on 1 April 2025 and is mandatory for grocery retailers and wholesalers with over $5 billion in revenue, which the ACCC lists as ALDI, Coles, Metcash and Woolworths. Covered businesses must deal with suppliers lawfully and in good faith and cannot vary supply agreements retrospectively, and from 1 July 2026 the very large retailers over $30 billion in revenue, Coles and Woolworths, must not engage in excessive pricing of grocery products, per the ACCC. The Code protects how you are treated. It does not decide whether you are ranged. The buyer decides that, on every route.

Whoever fronts the buyer, the retailer's requirements land on someone, and you pay for them somewhere: in a distributor's margin, an agent's commission or your own hours. EDI builds take months, not weeks. Barcodes must be GS1 verified at unit, carton and pallet level. For Woolworths, item and pricing data flows through the National Product Catalogue, the data pool GS1 Australia states it operates with Woolworths for supplier onboarding.

The calendar does not change by route either. Range reviews come around roughly every six months, presentation invitations can arrive with about two weeks' notice, and the first purchase order typically lands one to six months after a win. What changes is who carries the cash across those gaps. A distributor buys your stock, which shortens your cash cycle. Under an agent or broker you keep title, so the working capital gap between production and retailer payment stays yours.

Failure has a price on every route as well. Chargebacks for non-compliant deliveries commonly run 1 to 5 percent of invoice value, and 871 Australian retail businesses hit insolvency for the first time in FY25. A route that buries your numbers inside someone else's margin does not make them better numbers. It makes them harder to see.

There is no best route, only a best fit for your binding constraint. If cash and logistics are the constraint, a distributor solves both and charges accordingly. If you have margin but no buyer relationships and no time, an agent or broker sells while you build the business. If your margin is too thin to share, direct may be the only route where the waterfall survives, provided you cost your own hours honestly. And if your brand is importing into Australia, none of these routes replaces your own advisers on customs and import mechanics.

Our position is worth declaring: Built for Retail works the agent model, selling on commission as your representative while you keep title, set the price and see every number, and our team has ranged founder-led brands into Australian retailers as the agent. Past rangings never promise future ones. If you want the route-by-route waterfalls modelled before you commit to any of them, the Retail-Readiness Sprint is a fixed fee of $15,000 for a single retailer scope or $25,000 across multiple retailers, about four weeks, and you keep the model either way. The Sprint is indicative and does not guarantee ranging. Whichever route you take, the buyer decides.