Shopify Collective

Love it! However, beware that if you add several brands you will quickly run out of media file storage and images will stop showing up. We've also been using an image compression app which helped a little but now we've hit their limit. It doesn't quite make sense that as a Shopify app, only connecting Shopify stores where the brands' images are hosted on their own site that it would affect our media limits. It seems like a huge area for improvement on Shopify to correct this. Otherwise, it's an amazing app and possibly the new wholesale procurement route - seamless and beneficial to all.

good

AWFUL. Absolutely zero understanding from Shopify on how UK VAT and Tax works. Listing collective suppliers that offer 10% margin on goods, yet really there charging you 10% to sell there product! So yeah amazing business model, losing money for selling suppliers products because at the last minute they add 20% vat onto the charge to the retailer. What on earth is going on. Its disgusting that they have no solution in place for this. Sam Hampton of shopify support suggested we paid for a bulk editor like "Matrixify" or "Bulk Price Editor" that might be able to solve the issue. So shopifys are basically telling you collective in the UK is a broken model. I cannot believe they have not fixed this issue and automatically added 20% on the price to any store that is collecting tax.

In response to Shopify response -
I can confirm this issue is not resolved, you built this with USA in mind and not the UK. Its a mess. Fix it.

This is a wonderful option for our small family run business to generate another revenue stream.
Thank you Shopify

It’s awesome!

After implementing Shopify Collective and starting real sales, a fundamental accounting and tax problem appears that Shopify does not clearly communicate, and which in practice makes this model unworkable for EU businesses.

Once you connect to a supplier:

you sell products directly to end customers,

payments are received by your store,

Shopify automatically splits the revenue based on a predefined “margin”,

but you do not receive any purchase invoices from the supplier that would document the cost of goods sold.

Key tax consequence

From a tax authority’s perspective:

a cost exists only if there is a valid invoice,

no invoice = no deductible cost.

As a result:

100% of the sales revenue is treated as taxable income,

authorities assume the goods were acquired “for free”,

income tax is calculated on the full turnover, not on the margin.

The margin in Shopify Collective is an illusion

The margin shown in Shopify Collective:

has no tax or accounting validity,

is not recognized as a cost,

is only an internal platform settlement.

In practice:

you transfer part of the revenue to the supplier,

you still pay fees, payment costs, ads, etc.,

but income tax is charged on the full sales amount.

This means the merchant ends up subsidizing each sale instead of making a profit.

High risk for EU merchants

Shopify Collective operates like dropshipping or a marketplace, but:

provides no supplier purchase invoices,

offers no self-billing mechanism,

does not issue consolidated monthly cost invoices,

shifts all tax risk onto the merchant.

Under EU tax rules:

Without a cost invoice, there is no cost of goods sold — regardless of real money flows.

Conclusion

Shopify Collective may look attractive from a technical standpoint, but:

it is not aligned with EU tax and accounting requirements,

it prevents proper income tax reporting,

it creates serious financial and compliance risk for merchants.

I strongly discourage using Shopify Collective if you operate a business in the EU and want to stay compliant and profitable.

It’s easy to find suppliers that fit my brand, and the instant imports option makes bringing products into my shop effortless. Thanks to Shopify Collective, I’m able to build a store that truly reflects my standards and vision.

Supercalifragilisticexpialidocious

Optimal

Limited reporting. No way to rate suppliers. Documents don't show where order originated, so it causes confusion for the customer. Suppliers can break connection with no warning, even if there are transactions pending, shipping, payment, etc...I could go on but not enough time. We have over 300 suppliers in collective, and have used it since early availability. We have encountered every problem that can be imagined. I would love to talk to someone on the team and give feedback. While collective is a very valuable tool it could be improved. So if anyone wants to reach out to us I am open to a conversation.