Shopify Collective: Your 101 Guide For a Head Start

Shopify Collective makes it easier for owners of Shopify stores to work together for mutual development. Online store owners can use it to speed up business growth without having to spend money on marketing or inventory management.

Having said that, the goal of this in-depth guide is to provide you with a complete grasp of Shopify Collective, including its features, advantages, and how to use this effective tool to promote success and growth within the Shopify ecosystem. 

1. What is Shopify Collective?

Within the ecosystem, Shopify Collective is an app and sales channel that lets Shopify stores interact and sell each other’s goods. By offering a digital infrastructure for product sourcing, order administration, and fulfillment processes, the platform simplifies the conventional wholesale model.

The following are advantages for retailers:

• Easy Product Sourcing: Shopify owners can quickly and efficiently expand their product lists by purchasing goods from verified Shopify Collective suppliers, avoiding the need to create new products and spend money on inventory.
• Dropshipping Capabilities: Shopify Collective’s dropshipping feature provides a solution for companies wishing to increase their product line without managing inventory. You can depend on your partner stores to handle shipping and inventory management while listing products from those online stores.
• Simplified Checkout Procedure: Shopify Collective’s checkout process integrates all vendor products into a single, easy-to-use platform. The simple integration procedure results in happy clients who are more likely to make additional purchases.
• Automated Inventory Management: Shopify Collective’s automated system for managing inventory across several vendors makes real-time inventory management possible. Through its functionality, the system keeps correct product listings, reducing the likelihood of overselling and out-of-date stock information.

The following are advantages for suppliers:

• Wholesale Partnerships: Direct-to-consumer businesses can enter the B2B market by utilizing Shopify Collective’s wholesale partnership option. By entering into wholesale arrangements with shops, suppliers can boost sales and create enduring relationships.
• Increased Sales and Market Exposure: Suppliers can greatly increase their reach and gain access to new consumer bases by establishing connections with several Shopify businesses.
• Lower Operational Costs: The Shopify Collective app eliminates the need for independent marketing and fulfillment initiatives by streamlining the selling process to sellers.
• Opportunities for Collaborative Marketing: The platform enables suppliers and retailers to collaborate closely to create and execute mutually advantageous marketing plans.

2. How does Shopify Collective work?

The Shopify Collective app facilitates smooth product integration and automated order processing by connecting suppliers and retailers. 

2.1. Shopify Collective for suppliers

By installing the Shopify Collective app, suppliers can become members of Shopify Collective. They can do this directly from the platform’s landing page or by receiving an invitation from a store.

When things are all set up, retailers can your Shopify Collective portal to place orders. When an order is made, you are responsible to handle and deliver orders straight to customers.

After an order is fulfilled, the system will automatically collect payments from Shopify merchants and transfer to you. The Collective app has the tool for you to track product demand and sales performance to supervise and grow your business.

2.2. Shopify Collective for retailers

Through an easy-to-use interface, the Shopify Collective app gives retailers access to a carefully chosen vetted supplier network. After launching Shopify stores with the Collective, you can look through the supplier directory or let them find you.

When you find the desired products, you can bargain to achieve fair prices. The, use automatic synchronization to add the products to your store. When customers make an order, the suppliers will take care of it.

You will only need to respond to questions about those products using the channels you typically use and maintain good relaarionships with them.

3. Key features of Shopify Collective

The Shopify Collective app offers essential features that facilitate your eCommerce businesses. Yet, if it lacks anything that you wish for, you can turn to Shopify store setup services to get you the necessary plugins or integrations.

3.1. Product sharing

By carefully sharing products with merchants via price lists and having their Shopify stores stock their products, suppliers may increase the visibility and reach of their products. To enhance their product options, retailers can display these items alongside their current stock.

Suppliers use Shopify Collective to customize their product offering and prices for each retail partner, in line with shared business goals. This makes the goods more visible to a network of prospective Shopify customers and boosts sales.

3.2. Inventory sync

To guarantee product availability without the need for human restocking, you can switch to a digital inventory system that updates in real time with your suppliers. The app can maintain correct store listings and synchronize pricing, stock levels, and product information in real-time.

This integrated strategy guarantees that each party retains control over its own operations while benefiting from automated workflows. The foundation of the platform minimizes operational complexity for all users while facilitating scalable expansion.

3.3. Automated order management

The system gives suppliers automated order processing and real-time inventory management tools. The automated order management procedure operates as follows:

• Order fulfillment: A fulfillment request is automatically created to instruct the suppliers to begin preparing the order as soon as the buyer completes a purchase from the retailer’s shop and pays.
• Return orders: Retailers may automate returns on Collective orders with the supplier thanks to Shopify Collective’s return policy. Return processing, return window and costs, rejected and canceled returns, and supplier refunds are all covered by these policies.

3.4. Integrated shipping

To provide a better customer experience and maintain operational control, you can automate the synchronization of orders, tracking data, and shipping updates, even while suppliers manage fulfillment directly to end users.

3.5. Automated payments

When an order is fulfilled, retail partners can use integrated payment systems to automatically handle supplier payments without paying additional fees. For instance, when automatic payments are enabled on both ends, money is automatically delivered to the merchant following the supplier’s refund request.

4. How to use Shopify Collective 

4.1. For retailers

Before you start using the Shopify Collective app as retailers, review the following considerations:

• Shopify Collective app doesn’t support digital products and gift card products.
• Shopify Collective app doesn’t pass duties, taxes, or tariffs to suppliers.
• You can’t use the Pause and Build plan with the Shopify Collective app.
• You must decide how you and your supplier will collect taxes if your company is situated in Canada and you collaborate with a Canadian supplier. Typically, your supplier collects taxes from you, and you collect taxes from your customers.

Now, you can start configuring the platform as a Shopify Collective retailer in the manner described below:

• Step 1: Log in to your Shopify store 
• Step 2: Navigate to the Shopify Collective page and follow the steps to “Get Started.”
• Step 3: Specify that you are a retailer.

• Step 4: Open the email invitation, click the “Install Shopify Collective” link, and select the store where you want to integrate the app.
• Step 5: Use the “Add Sales Channel” option in the Shopify admin to enable Shopify Collective.

• Step 6: Reach out to suppliers already on Shopify Collective by sending invitations or accepting connection requests.

• Step 7: Use the Shopify Collective app to explore suppliers’ product catalogs and select items to import directly into your store.

• Step 8: Adjust pricing to reflect the supplier’s retail prices while incorporating your desired profit margins.

4.2. For suppliers

To join Shopify Collective, suppliers must meet specific criteria:

• You are based in the same country and use the same currency as the retailer.
• You need to be active on the Shop app.  
• You need to meet the Shop merchant guidelines.

With our prebuilt Shopify stores, you can be sure to meet all these criteria. So, you can save your time and jump right to become a Shopify Collective supplier:

• Step 1: Log in to Your Shopify Store 
• Step 2: Navigate to the Shopify Collective page and click on “Get Started.” If your store meets the eligibility criteria, Shopify will have already sent an invitation to your registered email address.
• Step 3: Specify that you are a supplier.

• Step 4: Open the invitation email from Shopify, click on the “Install Shopify Collective” link, then follow the instructions. Choose the store you want to use if the email is linked to more than one.
• Step 5: In your Shopify admin, click “Add Sales Channel” from the navigation menu to integrate Shopify Collective.

• Step 6: Activate the discovery mode in your settings.

• Step 7: To allow shops to request permission to resell your products, add a “Become a Distributor” button or similar feature on your website.

• Step 8: To establish wholesale prices for your goods and provide your store partners with a clear pricing structure, navigate to “Price Lists” in the Shopify Collective app.

• Step 9: After retailers submit requests, evaluate them and decide whether to accept or reject them in light of your preferences and corporate objectives.

5. Does Shopify Collective benefit dropshipping?

Although it is not exactly the same, the Shopify Collective app is essentially a particular kind of dropshipping that makes use of Shopify’s platform and promotes cooperation amongst Shopify merchants. Based on our Shopify Collective reviews, it significantly affects dropshipping in both positive and negative ways.

Here’s how Shopify Collective benefits dropshipping:

• Simplifying Dropshipping: The Shopify Collective app makes it simpler to locate and import goods from multiple suppliers without requiring actual inventory by automating the process of integrating with other Shopify companies.
• Smooth Integration: Collective doesn’t require any additional software or integrations because it connects directly within the Shopify ecosystem.
• Simplifying Order Fulfillment: An order placed by a customer is automatically sent to the appropriate supplier, who completes and ships the item straight to the customer.
• Concentrating on Sales: Dropshippers can concentrate on marketing and sales initiatives instead of inventory management by outsourcing fulfillment.

In contrast, here are potential downsides for dropshippers:

• Less Control: Dropshippers that use Collective may have less control over price, promotions, and other elements of their store, even while the platform is convenient and automates several tasks.
• Lower Profit Margins: Compared to typical dropshipping models, where merchants have greater control over price, Collective’s pricing structure, which is frequently wholesale-to-retail, can lead to lesser profit margins for retailers.
• Restricted Product Variety: Dropshippers may not be able to discover a large variety of products to sell because the Collective platform may only provide products from brands that are members.

6. Success stories with Shopify Collective

The real stories and numbers in this part will definitely convince you how effective and helpful Shopify Collective is. 

6.1. Drake Related

Drake is well-known throughout the world for his music and significant cultural impact. He has established Drake Related as a central location for all of his endeavors, which include Better World Fragrance House, a brand of high-end scented candles, and NOCTA, a special partnership with Nike. 

• Challenge:

To include their new brand partnerships into their site design, the Drake Related team came up with the exciting idea of creating an artistic reproduction of Drake’s famous Toronto home, known as “The Embassy.”

However, there were many obstacles in the way of this ambition. They had to handle the technical challenges of adding new items to their site with photographs and metadata. Additionally, these partnerships would require shipping and warehousing the new products well in advance of a launch.

• Solution:

The Drake Related team received assistance from Shopify Collective in streamlining and simplifying the process of their brand partnerships. The team used Collective to discover distinctive items in new markets that enhanced their current offerings. In just a few minutes, they were able to establish connections with the businesses, form alliances, and add their goods to the Drake Related store.

• Result:

Drake Related, powered by Shopify Collective, has achieved amazing outcomes:

• Partnerships have been made simpler, and connecting with brands that share similar values is now easier.
• Quick deployment with only 20 minutes to establish brand partnerships on its website.
• 72% of sales, including those from products sourced through Collective, come from first-time buyers, demonstrating effective audience growth.

6.2. Cozy Earth

Cozy Earth is a high-end bedding and loungewear company with headquarters in Utah that is dedicated to providing the utmost comfort and elegance. The company sells a variety of goods made entirely of bamboo viscose.

• Challenge:

The team encountered some difficulties when they attempted to use smart cross-selling to raise awareness of their most recent endeavor, Fount Society. In addition to offering a convenient shopping experience by allowing customers to create a single basket with related products from both companies, both brands agreed that co-branding would be a no-brainer and may increase their bottom lines.

However, the teams were unsure of how to co-brand without primarily depending on their fulfillment center to oversee the process because the brands function as distinct entities under the Cozy Earth banner.

• Solution:

They were able to keep their own branded websites while taking advantage of a complimentary co-brand for the common SKUs thanks to Shopify Collective. Additionally, Cozy Earth switched to Shopify Payments, which made it simple for them to manage automatic payments across the two stores.

• Result:

Following its Shopify Collective launch, Cozy Earth has observed:

• Shopify Collective purchases account for 46% of Fount Society’s revenue.
• Co-branding accounts for more than 60% of the internet traffic to Fount Society.
• According to the Cozy Earth website, 36% of Fount Society sales came from new clients.

6.3. Paceline

Paceline is transforming wellness by converting it into monetary benefits and encouraging healthier lifestyles through seamless integration with fitness devices like Garmin and Apple Watch. 

• Challenge:

Paceline first used gift cards to encourage healthy behavior, but this strategy had several drawbacks. Faced with a typical business conundrum, Paceline aimed to diversify its catalog and increase the range of products it offered beyond gift cards without having to commit to upfront goods purchases and storage.

• Solution:

Paceline first used Shopify Plus and then Shopify Collective to address the issues of inventory management and expanding its product line. By making this strategy change, they were able to integrate products into their store without having to buy any stock upfront and establish connections with leading direct-to-consumer brands.

• Result:

Paceline has seen the following since switching to Shopify to power their marketplace through Shopify Collective:

• Without making any upfront inventory commitments, 150 partnerships were created and 3,000 SKUs were made available to their customers through Shopify Collective.
• YoY sales increased by 262% thanks to an expanded product catalog.
• Support queries decreased by 90% as a result of switching from gift cards to physical goods.
• 185% more new clients were acquired YoY through curated offering

7. Conclusion

To sum up, Shopify Collective is a revolutionary solution for eCommerce, providing Shopify merchants with an easy and effective means of connecting, working together, and growing their presence within the Shopify ecosystem.

It enables you to seize new chances for expansion and success by allowing smooth brand collaborations, optimizing inventory control, and improving the shopping experience for customers.

So, study this blog from eComStart carefully and begin looking for vendors or merchants!

8. FAQs