Last updated on 31 August 2022
When you work with multiple suppliers, splitting payments can be a pain. The manual process of doing so is a pain. However, tools like CollabPay can help you automate supplier payments on Shopify.
Below, we will provide you with a step-by-step process on how you can automate your supplier payments using CollabPay.
What is CollabPay?
CollabPay is a Shopify app developed by Massive Monkey Limited that assists you by automatically splitting payments between multiple collaborators. The plugin works by automatically calculating earnings divided to different vendors or suppliers, producing reports based on that, and sending the money where it needs to go.
CollabPay provides you access to four different plans:
- Freelancer – 1 integration, 3 collaborators, 3 payouts per month ($9 per month)
- Startup – 3 integrations, 12 collaborators, unlimited payouts per month ($19 / mo.)
- Business – Unlimited integrations, Unlimited collaborators, unlimited payouts per month ( $35 / mo.)
“Integrations” refer to the number of apps it can work with. Shopify put most of the effort, with plans to expand to apps like WooCommerce and Magento coming soon.
How Do You Install CollabPay?
To get started, you’ll need to have a Shopify store. Once you get that out of the way, you can install it by clicking the “Add app” button located on Shopify’s app store link.
You’ll need to select a plan (from the list above) before starting. What you choose depends on the number of suppliers you work with.
You’ll know the installation is done when you see it on your app list. If you are still running on a Shopify free trial, you’ll need to select a plan before installing CollabPay.
Adding Your First Suppliers
In the upper-left-hand corner, you’ll see a link for collaborators. This is where you will list the people you work with (your suppliers).
Because Collabpay works with PayPal, you’ll need your supplier’s PayPal email address to get started. Keep this in mind when filling out the form that contains your supplier details.
You’ll also need to associate your collaborator details with specific products, which you can do with these four steps:
- Go to your app
- Go to the ‘Products’ page
- Click on the product you want to add a collaborator to
- Choose “Add new collaborator”.
Setting Up For Automatic PayPal Payments
The CollabPay website has a PayPal tutorial on how to get this done yourself. However, you’ll need these things to get started:
- An active PayPal business account
- Permission to use PayPal Payouts
First, you need to:
- Go to CollabPay, then go to “Settings“
- Go to “PayPal Payouts“
- Click the “Login with PayPal” button
- Click “Agree and connect“
Next, you will see a message from PayPal just below about contacting them to enable this setting. You’ll need to communicate with PayPal regarding your store plans so they know you are a business.
PayPal is somewhat picky with this process, requiring all new applicants to go through the approval process. But a short conversation telling them that you are a Shopify eCommerce store owner should solve any problems.
Finding Out Payment Status on CollabPay
Once you have a processed order under a product associated with CollabPay, you’ll see it on a list under “Payouts.” There are two different settings to pay attention to:
- Paid – meaning that CollabPay has sent the payout
- Pending payout – meaning that the payout is calculated and no more orders will be added (but not yet sent)
- Active – orders are still being added to the payout
Knowing the difference between these will enable you and your suppliers to quickly track how much is being paid. This can be important in maintaining your PayPal balance, ensuring you have enough to pay your suppliers.
You can also filter to account for payout dates of interest for your supplier. If your supplier has a pay dispute, this can be essential information, claiming that you owe them something. When overcoming difficult suppliers, CollabPay makes things easy.
How Often Are Suppliers Paid Under CollabPay?
The number of payouts you do per month depends entirely on your plan. For example, the freelance program is the cheapest, only allowing you to do three payouts per month.
You’ll want to set these expectations with suppliers beforehand, ensuring they understand your limitations. Some suppliers like to receive payments often and daily, which you might consider if you make a solid profit by working with them.
Will Suppliers Need To Pay As Well?
CollabPay only requires the store owner to pay for the service. Unless your supplier also has different vendors and suppliers to work with, there’s no reason for them to establish a CollabPay account.
However, Suppliers will need an active PayPal account to receive payments. You can also accept payments via Collabpay by entering your PayPal email under the “account” section.
Does CollabPay calculate sales tax or VAT?
CollabPay can calculate sale tax and VAT.
Does CollabPay calculate sales prices?
If your product is on sale, CollabPay will automatically include these calculations. You won’t need to do anything weird with final payouts.
Does CollabPay slow down your store?
CollabPay does not slow Shopify stores because it is entirely off the platform. It requires no site code to run, so it will not slow down any store.
Will Products automatically sync with CollabPay?
Yes, any products on Shopify will automatically be part of CollabPay. If you need to modify payouts per specific product, go to them in your products list.
If you want to make real money with your Shopify store, you can’t waste your time chasing payments. Instead, allowing automated services to help you manage your store is how you focus on growth activities.
CollabPay is easily the most straightforward system for automating supplier payouts. If your current system for connecting suppliers is a struggle, check it out today to see how it works.