Paying your suppliers in the Shopify Collective app

When a customer places an order in your store, you receive full payment for that order. From that payment, you need to pay your supplier for the cost of the product sold, and for the cost of shipping.

Shopify Collective automatic payments

If you meet Collective's eligibility requirements, then automatic payments are turned on when you install Shopify Collective. It's the recommended way to pay your suppliers for products and shipping. There are no extra charges for using Shopify Collective's automatic payments feature.

When automatic payments are turned on for you and your supplier in Shopify Collective, the cost price of any Shopify Collective product that you sell is automatically debited from your Shopify Payments balance. The funds then transfer to your supplier's Shopify Payments account automatically when they mark the order as fulfilled.

You can view and keep track of Shopify Collective payments directly in the Shopify Collective app.

If you turn off automatic payments with a supplier, then it's your responsibility to agree how you pay the supplier for the cost of any products that you purchase from them. For example, your supplier could send you an invoice.

Requirements for using automatic payments with connected suppliers

To use automatic payments with a new connection, both you and your supplier must meet all of the following criteria:

• Both stores must be based in the same supported country and be using the same supported currency.
• Both stores must have Shopify Payments configured in the same region as their store's country.
• Both stores must have a Shopify Payments account for the same country as the country that their store's located in.

Considerations for using automatic payments in Shopify Collective between stores you own

If you use Shopify Collective as both a retailer and a supplier, then you can use automatic payments to pay the supplier store you own for orders. To send all the funds (minus payment fees), set a discount of 0%, or add a different percentage discount to send a percentage of the funds.

In the same way that automatic payments work with a supplier store you don't own, funds will be collected immediately and held until the order is shipped. You can turn automatic payments off between stores you own so that no funds are deducted from your retail store to pay your supplier store, and payment isn't put on hold pending shipment.

Turn automatic payments on with a supplier

If you're eligible to use the Collective app, then you can view which of your suppliers you pay using automatic payments.

You can turn on automatic payments with a supplier directly from your Collective app, and the supplier is notified of the change by email.

Steps:

1. From your Shopify admin, go to Apps > Collective.

2. Click Suppliers.

3. In the Automatic payments column, view whether automatic payments are on or off with each supplier.

4. To turn on automatic payments for a supplier, click the relevant supplier.

5. In the Payments section, turn on the Automatic payments button.

6. In the dialog, click Turn on.

Turn automatic payments off with a supplier

Only suppliers can turn off automatic payments when they're on. Contact them directly to request this.

View your Shopify Collective payments

You can view your Shopify Collective payments on the Payments page of the Shopify Collective app. Payments are displayed only for fulfilled orders.

You can view the following information about your payments:

• payment date
• order number
• supplier that was paid
• payment status
• amount that was transferred to the supplier for the product and shipping

You can also view Shopify Collective payments together with all your store's payouts in your Shopify admin.

Steps:

1. From your Shopify admin, go to Apps > Collective.

2. Click Payments.

3. In the Order payments section, view Shopify Collective payments.

Dealing with insufficient funds

Sometimes there might be insufficient funds in your Shopify Payments balance for you to be able to pay your suppliers in Shopify Collective. This might happen in the following circumstances:

• When your customers pay using alternative payment methods such as PayPal, because these funds aren't available in your Shopify Payments balance.
• When your Shopify Payments payouts are frequent, for example, having daily payouts means that your available funds are lower for paying suppliers.
• When you've had a high number of refunds or chargebacks after a Shopify Payments payout.

What happens when funds are insufficient

When Collective can't debit your Shopify Payments balance for a supplier payment, the following scenarios happen:

• Automatic retries: Collective automatically retries taking the payment until it succeeds. You don't need to take any action.
• Supplier orders display as Payment pending: Orders are displayed as unpaid on the supplier side until the debit from your account is successful.
• Suppliers might delay order fulfillment: Some suppliers might wait for payment confirmation before shipping orders.

How to prevent insufficient funds

To avoid payment delays and ensure timely order fulfillment for your customers, consider taking the following steps:

• Adjust your payout schedule: Set your Shopify Payments payout frequency to weekly or monthly instead of daily. This keeps a larger balance available for Collective payments. Learn how to change your payout schedule.
• Use Shopify Payments at checkout: Funds from orders that are paid for through Shopify Payments are immediately available for Collective debits. Alternative payment methods such as PayPal don't contribute to your Shopify Payments balance.
• Minimize refunds and chargebacks: These might reduce your available Shopify Payments balance and can cause payment delays to your Collective suppliers.

What to tell suppliers when you have insufficient funds

Some suppliers might choose to fulfill orders before payment is confirmed to ensure prompt shipping for your customers. If a supplier does contact you about an order being displayed as Payment pending, then tell them that your Shopify Payments balance is being replenished and that this might take a few business days. When the Collective debit payment is successful, the order will be displayed as Paid on their order details page.