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Shopify Collective: Is Dropshipping Dead?

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Over the years, Shopify has stood out as one of the best e-commerce platforms due to its high versatility and ease of use. Retailers and wholesalers have come to rely on Shopify to create professional-quality online stores with minimal setup. These features have attracted large-scale stores such as dropshippers. While dropshipping has been a profitable niche for various e-commerce sites, Shopify has now unveiled a number of changes in its 2023 summer updates to cater to large-scale stores. These updates are focused on streamlining processes, allowing traditional merchants to take dropshipping to a new level.

As a result, the Shopify Collective is a new feature many Shopify merchants are eager to test. Given that it’s hot out of the oven, many retailers are still unfamiliar with how it works. In this article, we’re going to take a look at what the Shopify Collective is, what it involves, and how you can take advantage of it.

If you are in dropshipping industry or are thinking about getting into the dropshipping business, read on because this article will provide several insights you don’t want to miss!

What Is Shopify Collective?

In the dynamic online retail landscape, Shopify Collective stands as a beacon of innovative opportunity for Shopify stores seeking to expand their product offerings and maximize profits. This simple yet powerful platform facilitates inter-store connections, allowing retailers to seamlessly sell each other’s products within the Shopify ecosystem’s confines. As a retailer, you’re poised to unlock the potential for increased cart sizes and enhanced profitability, all without the burdens of upfront inventory costs or lengthy commitments.

Now, let’s take a look at an overview of how Shopify Collective works:

Embracing the potential of Shopify Collective is straightforward and efficient. Whether you’re an established retailer or a rising entrepreneur, this platform opens doors to exciting possibilities. You have two routes to begin your journey:

#1: Request Pricing from Brands

Delve into an array of brands aligned with your store’s ethos and audience. By requesting pricing from these brands, you initiate a process of discovery and collaboration that can revolutionize your product lineup.

#2: Connect with Existing Suppliers

Nurture your existing supplier relationships by inviting them to join you on Shopify Collective. This bridge of connection deepens your bonds and augments your access to new, compelling products.

As you can see, Shopify Collective greatly simplifies brands selling each other’s products. Retailers need to source products from other brands in traditional dropshipping and incorporate these items into their product catalogs. Then, separate ads and product pages must be created for these items.

That process goes away with Shopify Collective. Now, brands can sync their inventories to create a streamlined experience so customers can access various brands at various locations. This approach offers merchants unlimited opportunities to cast an extremely wide net across their niche markets.

However, the benefits of Shopify Collective go beyond syncing product inventories. The following section takes a look at the main benefits you can expect from Shopify Collective.

The Benefits of Shopify Collective

Here’s a close look at the benefits you can expect from Shopify Collective, particularly when compared to traditional dropshipping:

#1: The Collaborative Process

Once connected with your chosen brands or suppliers, potential opens up. Suppliers can seamlessly share their product portfolio, empowering you to import these offerings directly into your store. The possibilities are as diverse as your imagination, enabling you to curate a unique collection that resonates with your customer base.

#2: Profit Strategy

Profitability lies at the heart of Shopify Collective’s allure. Margins, which can vary by supplier, generally fall within the enticing range of 20% to 40%. The equation is simple yet impactful: You procure products at a discounted rate from the supplier and then retail them at the supplier’s predetermined price. The profit accrued from each sale is unequivocally yours, a tangible result of your strategic acumen.

#3: Streamlined Customer Experience

In the world of online retail, customer satisfaction is paramount. Shopify Collective ensures that the customer journey remains seamless. Upon making a sale, the process transitions effortlessly to your suppliers. These suppliers assume the mantle of fulfillment and shipping, sparing you the complexities of logistics.

Further enhancing this seamless experience, tracking numbers synchronize from your supplier’s store to yours. This orchestration triggers your customary branded shipping notifications, offering your customers a reassuring thread of continuity in their shopping experience.

#4: Accessibility and Opportunities

Shopify Collective encapsulates the spirit of empowerment. For eligible stores based in the United States, this platform is accessible without charge—a testament to Shopify’s commitment to democratizing growth. Regardless of size, every retailer is bestowed with the tools to harness the synergistic power of collective collaboration.

Indeed, Shopify Collective represents a new chapter in the evolution of e-commerce. By fostering connections, simplifying operations, and driving profitability, this platform redefines what it means to thrive in the digital market. Seize the opportunity to be part of this transformative journey and propel your business toward unparalleled growth. Your voyage toward success commences now.

The Shopify Collective App

Shopify Collective works for stores based in the United States. At this moment, stores based outside of the US are not eligible. Nevertheless, US-based stores with suppliers in Canada may need to consider setting up special tax rules. You can check out our comprehensive guide on taxes here.

Before jumping into the Shopify Collective app, here is a look at the requirements your store must meet:

  • Your business must have its operations within the United States.
  • The currency for transactions within your store must be the US Dollar (USD).
  • It’s a requirement to activate Shopify Payments for transactions within your store.
  • Your store should have achieved a minimum revenue of USD 50,000 in the last 12 months.
  • If your business is in Canada, you can access Shopify Collective only through a direct invitation from a supplier already using the app. This supplier should also be based in Canada and use the Canadian Dollar (CAD) as their store currency.

When using the Shopify Collective app, the following considerations are essential:

  • Shopify Collective is not compatible with digital goods, gift cards, or product drops.
  • For Canadian businesses collaborating with Canadian suppliers, it’s important to establish a taxation strategy. Typically, as the retailer, you collect taxes from your customers, while your supplier collects taxes from you.
  • To apply accurate tax rates in Canada, you can configure your tax settings within Shopify.
  • To ensure precise taxation rates for your suppliers and to manage your tax obligations appropriately, it is recommended to seek guidance from your local tax authorities or engage with a tax expert.
Shopify Collective
Source: https://www.shopify.com/

Downloading the Shopify Collective App

Connecting on Shopify Collective is as easy as installing an app. However, you can’t just download the app and hit the ground running. As a retailer, you must get invited to connect with a supplier. Suppliers can invite you to connect, allowing you to install the Shopify Collective app. Once installed, you are synced with that particular supplier. Then, you can start selling their products on your Shopify store.

Here’s how it works:

  • Go to the Shopify Collective landing page to get the retailer app.
  • Connect with one or more suppliers by accepting their invitation.
  • Then, install the app directly from Shopify to get started.

Now, you can follow these steps to install the app:

  • You must install the Shopify Collective app from the invitation email sent to you.
  • Next, log into your account.
  • Please note that you must choose one to sync the supplier if you have several stores.
  • Lastly, click “add app,” and you are good to go.

Bear in mind that once you have installed the Shopify Collective app, you can invite other suppliers to sync with your store. As such, the challenge is to get the first supplier to send you an invite. Once you’ve gotten the first invite, you can add other suppliers as you see fit.

How to Accept an Invitation from a Supplier

Getting that first invite from a supplier can be a thrilling experience. So, when you get that invitation message, here is what you need to do:

  • Access your Shopify admin panel and navigate Settings > Apps and sales channels.
  • On the Apps and Sales Channels page, locate and select Collective (Retailer).
  • Initiate the app by clicking Open.
  • Within the Collective (Retailer) app interface, proceed to Suppliers.
  • Navigate to the To Review tab.
  • Identify the supplier you wish to establish a connection with and click on Accept invitation.

This step allows you to view the supplier’s catalog and import products into your store. You can also find important shipping information. The established connection allows you to view the following information:

  • Automatic payment setup between you and the supplier.
  • The date since when you have connected.
  • Total number of orders.
  • Average order value between you and the supplier.
  • The total number of sales per transaction and dollar value.

As you can see, Shopify Collective’s information is highly useful in determining the overall valuation of each connection you establish. These insights can help you determine how valuable each of your suppliers is to your overall sales.

what is Shopify Collective
Source: https://shutterstock.com/

Finding New Suppliers and Products on Shopify Collective

Shopify Collective is a gateway to a seemingly unlimited number of suppliers and products. As such, it is crucial to understand how the process works. The great news is that Shopify Collective facilitates this process. This situation is a huge contrast to the traditional dropshipping business model.

Retailers would need to do all the legwork in traditional dropshipping to find suppliers. This process often entails connecting with unknown suppliers, potentially risking their business. That risk goes away with Shopify Collective.

The Shopify Collective app displays information such as the supplier’s physical location, company description, product information, retail prices, and shipping origin. Plus, you can acquire other highly useful pieces of information from the Shopify Collective app.

For additional details regarding the product, including pricing margins and shipping expenses, you should initiate a pricing request and communicate directly with the supplier. When you send an invitation, it encompasses pertinent information about your brand, encompassing brand assets and links to your social media profiles. Suppliers receive this invitation via email, and they have the option to either accept the invitation or proceed with ongoing communication through email. Keep in mind that response times from different suppliers may vary.

Let’s look at how you find new suppliers and products on Shopify Collective:

  • Navigate to your Shopify admin panel and select Settings > Apps and sales channels.
  • On the Apps and sales channels page, locate and choose Collective (Retailer).
  • Initiate the app by clicking Open.
  • Within the Collective (Retailer) app interface, select Discover.
  • Identify the product you wish to examine and click on it.
  • Thoroughly review both the product’s details and the pertinent supplier information, which may encompass shipping particulars and social media profiles.
  • Initiate the pricing inquiry by clicking on Request Pricing.
  • Compose the desired message for the supplier and finalize by clicking Send.

This process allows you to do homework on suppliers you’d like to connect with. By reviewing their product information, you can get a sense of how useful connecting with that supplier may be. Now, let’s look at how you can invite suppliers once you’re ready to connect with them.

  • Access your Shopify admin panel and navigate Settings > Apps and sales channels.
  • On the Apps and sales channels page, locate and select Collective (Retailer).
  • Initiate the app by clicking on Open.
  • Within the Collective (Retailer) app interface, proceed to Suppliers.
  • Initiate the supplier invitation process by selecting Invite Supplier.
  • Input the supplier’s pertinent contact information, including first and last names and valid email addresses.
  • If desired, you can include an additional note visible in the invitation email sent to the supplier.
  • Finalize the process by clicking Send.

That’s all there is to it! You can easily connect with suppliers on Shopify Collective. This feature greatly facilitates that overall dropshipping model. You don’t need to flip over rocks trying to find suppliers for the products you see. Shopify Collective takes care of that for you.

Additionally, you can discover new products and suppliers you may not have thought about. This situation allows you to explore other business opportunities you may not have explored before. So, take the time to check out what Shopify Collective has to offer. You may be looking for one thing and discover an entirely new one!

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Why Should Merchants Consider Shopify Collective for Dropshipping?

Shopify Collective presents a myriad of benefits for dropshipping merchants. From connecting with trusted suppliers to automating administrative tasks, the platform streamlines operations, fosters growth, and enhances the overall dropshipping experience. By leveraging its features, dropshipping merchants can thrive in a competitive landscape and deliver exceptional value to their customers.

So, let’s consider specific reasons why merchants should consider Shopify Collective as their dropshipping business model:

#1: Expanded Supplier Base and Product Range

Shopify Collective serves as a dynamic hub where merchants can uncover new suppliers and diversify their product offerings. The platform’s intuitive interface facilitates efficient exploration and selection of products that resonate with the target audience. This bolsters a merchant’s catalog and keeps the offerings fresh and appealing.

#2: Effortless Supplier-Retailer Connections

A key advantage of Shopify Collective is the ease with which suppliers and retailers can establish connections. The streamlined process ensures that partnerships are forged swiftly, allowing merchants to expand their offerings without hassle.

#3: Enhanced Trust through Vetted Relationships

Shopify undertakes the crucial role of vetting both retailers and suppliers participating in the Collective. This meticulous screening process minimizes risks for all parties involved. As a result, merchants can confidently engage with reputable suppliers, fostering trust and reliability in the dropshipping ecosystem.

#4: Automation: Simplifying Administrative Tasks

The burden of administrative tasks can be substantial in dropshipping. However, Shopify Collective alleviates this challenge through its automation capabilities. From payment processing to tax management, the platform effectively handles these aspects, allowing merchants to focus more on strategic business decisions and customer experience.

#5: Access to a Trusted Supplier Network

Being part of the Shopify ecosystem grants merchants access to an extensive network of established suppliers. This network comprises reputable players that have been successful on the platform, further bolstering the trustworthiness of available options.

#6: Swift Inventory Syncing

Inventory management is a critical aspect of dropshipping. With Shopify Collective, inventory syncing becomes an effortless endeavor. Merchants can rest assured that their product availability aligns seamlessly with supplier inventory, reducing the risk of overselling or undersupplying.

#7: Simplified Product Import

One of the most time-consuming aspects of dropshipping is setting up new product pages and collections. Shopify Collective simplifies this process by allowing retailers to import product information from suppliers directly. This significantly reduces the need for manual data entry and expedites the process of getting products to market.

Undoubtedly, Shopify has the potential to become a real game-changer. This new spin on traditional inter-store inventory syncing can transform the entire dropshipping industry, allowing anyone to dip their toes without the substantial legwork dropshipping can sometimes require.

Shopify Collective for Shopify Dropshipping
Source: https://shutterstock.com/

Shopify Collective as a Catalyst for Upselling and Cross-Selling

Shopify Collective presents an exceptional opportunity for merchants to harness the power of upselling and cross-selling, revolutionizing how they engage with customers and drive sales. Let’s explore how this platform acts as a catalyst for these strategies:

#1: Expansive Product Catalog

Customers gain access to a wide array of products thanks to the collective efforts of multiple retailers. This comprehensive catalog becomes a treasure trove for customers seeking primary purchases and additional items that complement their choices.

#2: Strategic Product Bundles

Retailers can ingeniously package related products into bundles, enticing customers to purchase complementary items together. This strategy boosts sales and offers customers a convenient way to acquire a cohesive set of products.

#3: Elevated Average Order Value (AOV)

Shopify Collective empowers retailers to enhance their AOV by strategically recommending products that align with customers’ interests. These suggestions encourage customers to explore additional options, ultimately leading to higher spending.

#4: Enhanced Discovery

Customers experience the joy of discovery as they navigate the diverse product offerings. The platform encourages them to stumble upon items they might not have initially considered, expanding their shopping experience.

#5: Refreshing Product Assortment

Retailers can effortlessly refresh their product offerings without maintaining excess inventory. By partnering with other retailers, they can present customers with diverse products, keeping the shopping experience exciting and dynamic.

#6: Convenient Brand Aggregation

Shopify Collective offers customers the convenience of discovering their favorite brands in one centralized location. This aggregation simplifies the shopping journey, fostering brand loyalty and enticing customers to explore additional products from trusted sources.

Shopify Collective’s multifaceted approach lays the foundation for a sophisticated upselling and cross-selling strategy. By offering an expansive product catalog, facilitating strategic bundling, elevating AOV, enabling product discovery, refreshing assortments, and aggregating brands, the platform equips retailers with the tools to create a compelling shopping experience. Through these mechanisms, Shopify Collective catalyzes upselling and cross-selling initiatives, fostering mutually beneficial relationships between retailers and customers.

Shopify Collective Dropshipping
Source: https://shutterstock.com/

Is Shopify Collective Really a Threat to Dropshipping?

Shopify Collective emerges as a transformative force with the power to reshape the dropshipping landscape. Seamlessly connecting retailers and suppliers within the Shopify ecosystem streamlines operations and catalyzes growth. This innovation offers unparalleled benefits such as easy supplier discovery, reduced administrative burden, and a vetted network, propelling dropshipping businesses to new heights.

However, it’s important to note that Shopify Collective’s impact is currently confined to the Shopify network. Dropshippers and suppliers operating outside of Shopify can continue business as usual. Nonetheless, as the concept gains traction, its potential ripple effect becomes evident. As more participants recognize the advantages and success stories of Shopify Collective, the platform could emerge as a magnet, drawing suppliers and retailers away from other platforms.

This phenomenon holds the potential to revolutionize the dropshipping industry at large. As more players transition to Shopify Collective, the industry’s dynamics could shift, fostering a more standardized, efficient, and trustworthy dropshipping ecosystem. While the transformative impact may be gradual, the groundwork laid by Shopify Collective could eventually redefine how dropshipping is conducted, setting new industry standards and shaping the future of online retail.

Conclusion for Shopify Collective: Is Dropshipping Dead?

Shopify Collective stands poised to revolutionize the dynamics of supplier-retailer connections. Its impact is limited to the Shopify network, yet the transformative potential is undeniable. The platform streamlines collaboration by seamlessly facilitating partnerships between suppliers and retailers, enabling efficient product integration and sales expansion. While currently exclusive to Shopify, the success and efficiency of this model are likely to resonate across the e-commerce landscape.

As the industry witnesses the benefits of such interconnectedness, other platforms may be prompted to adopt similar strategies, reshaping how suppliers and retailers interact. This inevitable evolution has the potential to catalyze a widespread transformation within the dropshipping sector, elevating standards, fostering collaboration, and ultimately paving the way for a more efficient and interconnected dropshipping ecosystem across various e-commerce platforms.

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  • Topics: Shopify Trends

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