Shopify Collective

UPDATE after Shopify fix: Finally we are making some profit now, thank you. It would have been nice to sort the profits retrospectively though, or at least refund the Shopify fees for those orders we've lost money on.
There is still an issue with UK suppliers that sell to both businesses and consumers, in which case they'll have the prices without VAT included and this is added at the checkout. Well, in those cases with Shopify Collective although our shop is setup to include taxes, the products from respective suppliers are imported without tax and that's what it is shown to our customers. In fact, somebody just bought a product from us today and we've only realised that the supplier don't include VAT as this is calculated at checkout on their website. Well, our customer paid for the order without VAT being included which resulted again in a loss for us (now we need to remove the supplier and products).
So, although we had great progress, this still needs some work.

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UPDATE after 20 sales: Shopify Collective is gravely flawed for UK and European retailers, giving misleading margins that ultimately result in losses.

The app defaults to treating supplier prices as excluding VAT even when those prices already include VAT. This was confirmed by a Shopify Support Advisor after I provided an example of a supplier product priced at £115 with a supposed 10% margin (£11.50 profit) - the price is clearly VAT-inclusive on the supplier’s website, yet Collective treats it as tax-exclusive:

“The most important point is that Shopify Collective treats all B2B prices from suppliers as tax-exclusive, regardless of how the supplier lists prices on their own website.

So, just as you calculated, when Collective imports the product at £115 (listed as excl. tax), it calculates your cost first (which is £115 minus your 10% margin, so £103.50). Then, it adds the 20% B2B VAT on top of that cost. This results in the £124.20 total cost to you, which, as you correctly identified, can lead to a loss if you sell the item at the £115 price.”

I honestly do not know how this is even legal.

Like many retailers, we offer a 10% newsletter-signup discount. All our chosen suppliers offer margins of 20% and above, so we assumed we were safe. In reality, we made a loss on every sale with a supposed margin below 28%, and even above that threshold the profit was marginal.

To give a real-world example of a “positive” case:
A £479.99 VAT-inclusive item from a supplier offering a 30% margin. Collective displayed: Retail £479.99 excl. tax (although the price already includes VAT), Cost £335.99 excl. tax, Profit £144.00.
The customer used a 10% discount and paid £432. Shopify Payments fees were £13.64, giving us a payout of £418.36.

However, Shopify Collective charged us £335.99 (their margin-calculated cost) plus 20% VAT (£67.20), debiting £403.19 to pay the supplier — leaving us with a profit of just £15.17 on a £432 order.

Other sellers have reported the same issue, for example here: https://www.facebook.com/groups/490734433258832/posts/974975578168046/

Shopify Collective could be a great tool, and perhaps it works as intended in the US. But in the UK, where retail prices are VAT-inclusive, the current model is essentially unworkable — and borders on being a scam.

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INITIAL 3-star review: Interesting so far and I look forward to seeing results.

I would like to see a few improvements (if anyone from Shopify is reading...):
- The "excl. tax" is confusing as looking on the supplier website the same price is advertised to the public, including taxes.
- It would be very useful to be able to sort products by Inventory during import (that's particularly important with large inventories).
- Sorting by Retail price or Profit would be great too.
- For suppliers with multiple margins, would be very useful to filter out products with margins below X amount.
- The Recommendations on the Discovery page should exclude my existing Suppliers - also, would be good to be able to filter these by ratings