Ongoing Issues - Shopify Collective: Workflow Challenges of Stuck Orders and Misallocation of funds

[paulbaranda]

Hello Shopify Community,

I’m sharing my experience with Shopify Collective, hoping it resonates with other retailers and catches the attention of Shopify team members. While the platform has great potential, I’ve encountered recurring issues across multiple orders that have cost time, money, and customer trust. Let me walk you through a specific example with Order #1544 from my store, which illustrates a few of these challenges.

Uncovering Shopify Collective's Challenges: Lessons from Order #1544

1. Sufficient Funds, No Collective Debit

   • A customer placed an order (#1544) for $255.45, and the supplier cost was $204.55. Shopify deducted $7.71 in transaction fees, leaving a healthy positive balance in my Shopify Payments account.

   • Despite this sufficient balance—and new orders continuing to replenish it—Shopify Collective never attempted to debit the supplier cost. 6 days later, and still no Collective debit and I'll explain more why this continues to sit in a black hole.

2. Stuck in Limbo - A black hole

   • The order became stuck, meaning fulfillment was never triggered for the supplier.

   • Newer, smaller orders were processed without issue, further depleting the balance while the high-value order sat unresolved. You would think there is enough funds in this timeframe, but don't forget to factor in the payout frequency timeframe. When it's payout time, we start with an empty balance... or is that not how it works? Who knows, because Shopify Collective doesn't clearly explain how this works.

   • While the higher cost of goods wasn’t the root cause, it’s clear there was a misalignment in the flow of charges and debits, misallocating funds that should have gone to this order.

3. Customer Impact

   • I had to explain the delay to the customer, which strained their trust in my business.

   • The only option was asking them to place a new order—a frustrating and unnecessary step.

4. Financial Losses

   • Shopify charged transaction fees on the original order but offered no refund when fulfillment failed. If the customer placed a new order, I would be charged transaction fees again, doubling the financial burden.

5. Supplier Limitations

   • Suppliers had no way to intervene by sending me a manual invoice or overriding the system to fulfill the order directly. This lack of flexibility worsened delays and left no alternative resolution options.

6. Opaque Processes

   • There is no visible ledger or log to show why the Collective Debit wasn’t attempted or when it failed. Notifications about potential issues arrive too late and lack actionable details, leaving me guessing.

What’s Challenging About Shopify Collective?

1. Dependency on Shopify Payments

• Shopify Collective relies solely on Shopify Payments for supplier debits. Funds from PayPal or other methods don’t count, even though they’re part of the revenue.

• Unlike systems that debit directly from a connected funding source like your bank account, Shopify limits debits to the Payout Balance, which clears on a fixed schedule. This limitation creates a bottleneck that could be avoided with more flexible funding options.

• If the balance is perceived as insufficient at any point, orders are skipped, even if funds replenish shortly after.

2. Payout Timing Challenges

• With mandatory payout frequencies (weekly, in my case), timing becomes crucial. If a high-value order is placed before a payout clears, the balance may not align with the supplier debit.

• A more dynamic system, acting as a clearing account, could reconcile funds in real time to avoid these bottlenecks.

3. Misaligned Order Prioritization

• Newer orders are prioritized over older, stuck orders, leading to a perpetual backlog. This is especially problematic for large orders requiring higher supplier debits.

4. Cancellation Workflow Issues

• Retailer cancellation requests are automatically declined, even if the supplier forcibly cancels the order on their end. This leaves no way to retry fulfillment or resolve the issue.

• Suppliers also don’t receive proper notifications to accept or decline cancellation requests, further complicating communication.

How We Can Improve Shopify Collective

For Shopify Team

1. Prioritize Older Orders:

   • Ensure stuck orders are resolved before newer ones.

   • Introduce a retry mechanism for supplier debits when funds become available.

2. Increase Transparency:

   • Provide a real-time ledger to track debit attempts, failures, and reasons.

   • Clearly link Shopify Payments balances to pending supplier debits for better clarity.

3. Enable Supplier Flexibility:

   • Allow suppliers to issue manual invoices or override stuck orders to fulfill them directly.

   • Fix cancellation workflows so suppliers can properly manage requests.

4. Refund Fees for System Errors:

   • Waive duplicate transaction fees for replacement orders caused by system failures.

For Retailers

• Maintaining a buffer is only a temporary solution that works until the payout is scheduled based on Shopify’s mandatory frequency. There is no true way to avoid these issues if misalignments continue and retailers remain limited to using the Payout Balance as the sole funding source.

• Be proactive in communicating with customers when delays occur—though it’s clear the current system puts undue pressure on retailers to manage these issues.

Let’s Collaborate for Better Solutions

Shopify Collective could make retailer-supplier partnerships seamless with a few key improvements, but the current issues create unnecessary hurdles that disrupt operations and undermine trust. Retailers shouldn’t have to absorb financial losses or risk their reputation due to system shortcomings.

If you’ve encountered similar hurdles, I’d love to hear your perspective. Let’s work together to shine a light on these challenges and push for meaningful changes that make Shopify Collective a truly reliable tool for everyone.

Thanks for reading, and I hope we can see progress on this soon!