Collective can simplify some of the mechanics of selling another merchant’s products. There are still several questions we’d answer before launching.

1. Does the commercial model work?

Not holding inventory upfront doesn’t mean every Collective product is automatically profitable.

You still need to understand the relationship between:

• the retail price;
• the supplier’s cost; 
• discounts; 
• payment costs; 
• returns; 
• customer acquisition; 
• customer-service costs.

The important question isn’t simply whether there’s a difference between retail and supplier price.

It’s whether there’s enough contribution left after the other costs of selling the product.

This becomes particularly important if you regularly run broad promotions such as sitewide percentage discounts.

We’ll look at this in more detail in a separate article on Shopify Collective payments and margins.

2. Can the supplier deliver the customer experience you promise?

The supplier may fulfil the product, but the customer purchased it from the retailer.

That means customers are likely to associate the resulting experience with the brand they ordered from.

It’s therefore worth considering suppliers on more than product range and price.

How reliable is their stock? How quickly do they fulfil? What is their packaging like? How do they deal with problems? What happens if an order is delayed?

Customer checkout, payments and customer service sit with the retailer, while product supply, inventory management and fulfilment sit with the supplier.

In practice, those responsibilities are connected.

A supplier fulfilment issue can quickly become a retailer customer-service issue.

3. What will shipping look like to the customer?

Shipping deserves careful thought, particularly if customers can mix your own products with Collective products in the same order.

A basket could potentially contain:

• products you fulfil yourself;
• a product from one Collective supplier; 
• another product from a second supplier.

Operationally, those might become separate fulfilment journeys.

The customer still experiences one checkout.

So you need to consider what happens to:

• delivery charges;
• free-shipping thresholds; 
• delivery estimates; 
• separate parcels; 
• customer messaging.

Something can work perfectly from a technical point of view while still creating a confusing checkout experience.

Mixed baskets are therefore something we’d test before rolling Collective products out widely.

4. How will returns work?

The technical refund process is only one part of the customer experience.

Both retailer and supplier need to understand what happens when someone wants to return something.

Who does the customer contact? Where is the item returned? Who approves the return? Who deals with a damaged product? Who pays the return postage?

The important introductory point is simple: agree the process before your first return arrives.

5. Does it fit your wider Shopify setup?

The simpler the Shopify store, the easier this question might be.

For more customised stores, we’d look beyond Collective itself.

Think about anything that uses product, inventory, fulfilment or order information:

• ERP systems;
• warehouse systems; 
• product feeds; search;
• recommendations; 
• subscriptions; 
• bundles; analytics;
• Shopify Flow; 
• customer-service platforms; 
• custom integrations.

The question we’d ask each time is: “What changes when this product is sold by us but fulfilled somewhere else?”

That can uncover assumptions in the rest of the Shopify architecture that aren’t obvious when you’re simply testing whether a Collective product can be purchased.

Shopify Collective and CRO

Collective presents an interesting CRO opportunity because it changes the economics of testing product propositions.

Traditionally, testing a new cross-sell might require buying stock first.

That creates an incentive to prove the idea will work before you can actually test it properly.

Collective can potentially reverse that.

A retailer might start with a small number of complementary products and introduce them at specific points in the customer journey.

For example:

• related products on a product page;
• recommendations in the basket; 
• dedicated complementary collections; 
• bundles or routines; 
• merchandising around common customer needs.

You can then measure what happens.

Do customers actually add the product? Does average order value increase? Does overall conversion change? What happens to revenue per visitor? And crucially, does the extra revenue translate into additional contribution margin?

This makes Collective particularly interesting when approached as an experiment.

Start with the customer need. Select a small number of products. Measure the outcome. Then expand if the evidence supports it.

Is Shopify Collective right for your business?

Collective could be worth exploring if:

• customers already have a clear need for complementary products;
• you’d like to test a new category without initially buying inventory; 
• you have potential supplier relationships with brands serving similar audiences; 
• complementary products could increase basket value; warehouse space or inventory investment is a constraint;
• suppliers can meet the standards customers expect from your brand.

It might be less suitable if:

• complete control of fulfilment is fundamental to your proposition;
• your margins are already extremely tight; 
• highly predictable delivery is a major competitive advantage; 
• you rely heavily on large sitewide promotions; 
• adding third-party products would dilute a tightly focused brand proposition; 
• your wider ecommerce setup requires complete control over inventory and fulfilment.

None of these automatically rules Collective in or out. They’re simply the questions worth answering before treating the ease of connecting two Shopify stores as a reason to launch.

Making the Most of Shopify Collective

Shopify Collective removes one of the traditional barriers to expanding an ecommerce proposition: the need to own every piece of inventory you sell.

That opens up some genuinely interesting opportunities.

Retailers can potentially test new categories, build closer partnerships with complementary brands and add products that increase the value of existing customer journeys without making the same upfront inventory commitment.

But that doesn’t mean the best Collective strategy is to add as many products as possible.

We think the more interesting approach is almost the opposite.

Start small. Identify a genuine customer need. Find products that complement what customers already buy. Make sure the commercial and operational model works. Then test whether adding those products genuinely improves the customer journey.

Used in that way, Shopify Collective isn’t simply a tool for expanding a catalogue.

It can become a way of testing and improving the wider ecommerce proposition with considerably less inventory risk.

Considering Shopify Collective?

If you’re looking at Shopify Collective for your store, the Shopify configuration is only one part of the decision.

It’s worth considering the customer journey, merchandising, margins, fulfilment and wider Shopify setup before choosing where Collective fits.

Talk to Mucky Puddle about Shopify Collective and ecommerce optimisation.