DTC Briefing: How brands are using Shopify Collective, the platform’s cross-selling tool

Over the past year, Shopify Collective has been adopted by a number of DTC startups, such as baby and toddler brand Lalo and mouth tape brand Dryft. The brands that do use it say that, so far, the revenue generated by Shopify Collective only makes up a tiny percentage of overall sales. However, some say it has been helpful in helping them address some key challenges for any DTC startup, such as figuring out what type of future products their customers might be interested in and getting their products sold in more places.

The trajectory of Shopify Collective also underscores a few key challenges Shopify itself faces when rolling out a new product: how to balance the needs of various merchants, as well as some of the vendors that sell B-to-B solutions through the Shopify app store.

When asked for information about how Shopify Collective has grown over the past year, the company pointed to the fact that active selling connections, which refers to partnerships between merchants utilizing Collective, increased 765% between August 2023 and 2024. In a statement, Shopify’s senior product lead Joe Rinaldi Johnson said, “our focus now is on building the lowest-effort, highest-impact solution that helps both shops drive increased revenue directly on Shopify.” 

Creating a mini-marketplace
Shopify Collective operates similarly to other cross-selling apps like Carro and Convictional.

With Shopify Collective, each brand can allow some or all of its product portfolio to be available on Shopify Collective. Participating brands also approve all requests from other Shopify merchants looking to list their products to avoid showing up on sites they don’t want to appear on. The way orders are fulfilled is that two customer emails are triggered when a third-party product is sold on a website, with the partner brand drop-shipping out its item separately. The brand selling the product then receives a percentage kickback from each sale.

Over the past year, Shopify says it has also rolled out a number of Collective improvements to make selling with other brands easier and more efficient. These include bulk actions, enhanced discovery and live-fetched shipping rates.

Dryft, which sells sleep wellness products like mouth tapes and ear plugs, began experimenting with Shopify Collective earlier this year.

Dryft co-founders Jess Windell and Lindsey Rosenberg said that they first learned about Shopify Collective when another brand requested to carry Dryft products on its website. In turn, Dryft started offering third-party products via Shopify Collective about six months ago. Windell said the company chose to curate sleep-related items from other women-owned brands, like a satin pillowcase and sleep mask from accessories brand Kitsch. 

Now, about 5% to 10% of Dryft orders currently contain products from partner brands. However,  Rosenberg said, the benefit is that “there is zero lift on our end and [it] brings incremental income.” Shopify Collective is still free to use for all eligible U.S. shops. 

Customers are likely to bundle these add-on products, Rosenberg said, because they see a stamp of approval from a brand they already trust.  

Windell also said that given the startup’s limited R&D resources, offering other brands’ products in similar categories allows Dryft to test and track what shoppers are gravitating toward.

“We’ve added products and taken them off based on our messaging and evolving portfolio,” Windell said. “We don’t need to go all-in on investing in a new product before seeing whether it resonates with our consumer.” In the coming months, Dryft will be removing a Shopify Collective listing and replacing it with its own version with a new product launch.

This presents a potential challenge for Shopify as it seeks to scale Collective: brands that see how well a certain item is performing on their site may just end up creating a version of the product themselves. It also raises questions about how comfortable brands may be in the long run about selling their products on other brands’ websites.

However, Rosenberg positioned this as a typical practice in retail, similar to when retailers create their private-label products. “Everyone from Goop, Erewhon, Kroger and Trader Joe’s does it,” she explained.

Rounding out a product portfolio 
Other brands are listing third-party products via Shopify to help fill category gaps that may appeal to a wider customer range.

Texas-based retailer Heartstrong Sleep is an authorized seller of medical sleep devices like CPAP machines. Heartstrong has a physical retail Texas location, but in recent years the small business has seen its national online presence grow thanks to more people searching for and buying medical devices online.

Joshua Arterbury, co-founder and president at Heartstrong, said the company decided to try listing adjacent products via Shopify Collective to help acquire new customers. Heartstrong has since added wellness items from partner brands, such as heart monitors, sound machines and supplements.  

Arterbury said the company has strict limitations when it comes to distribution and marketing. 

“We can’t use marketplaces like Amazon due to FDA regulations,” Arterbury explained, which require a doctor’s prescription. “About 90% of our web sales are from existing customers, so we’re actively looking for co-branding opportunities to bring in new people.” 

At the same time, manufacturer agreements also prohibit Heartstrong from advertising the machines on social media and search engines like Google. “That means we can’t reciprocate on Shopify Collective and have our products sold on other sites,” Arterbury said.

In the nine months since Heartstrong started listing partners’ products, Arterbury said website traffic and sales have shown improvement. “It’s not a substantial amount of additional revenue, about 1% of overall sales come from these other products,” he explained. “But they [Shopify] make it really easy to add that it’s a win for us, it also doesn’t cost us anything to use it.” 

There are still some kinks in the program to be worked out, mostly to do with the branding of cross-listed products. For instance, Windell said, currently Dryft shoppers may miss the fact that they are buying non-Dryft products. The listing doesn’t prominently feature the partner brand’s name and logo, even though shoppers can see on the product photo that it comes from a different brand.

Brands like Dryft and Heartstrong plan to continue growing sales from the Collective tool while Shopify’s program is still in its infancy. In the last few weeks, Dryft adapted its ad campaigns to show more of its marketplace offerings and not just the brand’s own products.

“I think the future of online retail is a marketplace model,” Rosenberg of Dryft said. “We all want to see alternatives to Amazon that align with our interests and needs.”

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