Tech / Shopify

3 Unique Methods For Splitting Payments Between Product Vendors

Five different methods you can use for splitting payments between vendors
Published 7 August 2021

Last updated on 7 July 2022

As your store begins to grow, you are more likely to gain contacts with multiple vendors. As your vendor list grows, it starts to feel like managing a circus. With enough time, you might feel like you are spending more time on administrative duties. One of those administrative duties is splitting payments between vendors. 

How do you split these payments without feeling overwhelmed? The answer is by having a defined process for how you need to get things done. This article will dig through five options you have for managing vendor payments between multiple platforms.

Three Methods To Share Payments With Multiple Vendors 

  1. Manually – Bank transfer etc.
  2. Stripe for Marketplace 
  3. CollabPay

#1: How To Manually Calculate Vendor Payments

Manual calculation - vendor payout option one

Your first option for establishing regular vendor payments is manual calculation. While it’s the most cost-effective option, it’s also the most time-consuming.

Ideally, you will still have some systems to support you with calculation. Below are a few examples:

  • You can use a spreadsheet that divides the gross profit you make among multiple sources. For example, the vendor in cell 2B could request 10% of your gross profit for a product.
  • Software like Quickbooks can help you track how these payments might impact taxes. You can also use them to track what has gone where so you have evidence. 
  • Bank ACH bill payment services allow you to put regular payees. This feature enables you to access their information with relative ease. 

These are helpful in their own right, but they all still involve some knowledge of the process. There’s also the importance of clear legal documentation. 

The Importance of Legal Documentation 

A contract detailing what you can do with this information is essential to establish a level of trust here. You’ll want to confirm that your use of the information will be entirely professional right away. In this way, legal documents can be helpful. 

Once you get past that, you’ll want to establish them on your “bill pay” list. Whether you have a business or a personal bank account, you’ll be able to add this group to the list. 

You’ll want to establish two regular tracking dates:

  • A date where you calculate all of the money you owe vendors
  • The payout date of what you owe vendors 

The calculation amount is typically a percentage of all gross sales. However, you’ll want to pay close attention to your agreement when making this calculation.

Establishing a written record of your commission rate through legal documents is crucial. This situation is another reminder of the importance of legal documents confirming these rates.  

Legal documentation is a reference point when manually calculating your bills. Whether you send checks, use Venmo, or establish a regular ACH, always know what you will pay. 

#2: Stripe for Marketplace

Split payment option three - stripe for marketplace

Stripe for Marketplace is option number two. As one of the largest financial institutions in the game, they work with companies like Amazon and Google to crank out results.

Stripe is more of a complete financial suite of information. They include multiple services:

  • Split transactions between multiple recipients 
  • Automation of control of payouts for specific locations and dollar amounts
  • A dashboard to handle refunds and customer disputes
  • The generation of 1099s if you hire contractors 

Overall, the platform is pretty impressive. The number of features can be pretty overwhelming at first. If you are just looking for a vendor payout app, Stripe probably isn’t a provider for you. 

If you are looking for a complete financial suite, Stripe does provide a comprehensive solution. 

#3: CollabPay – A collaborative calculations app with platform crossover

Collab pay - split payment option five

The first and second are decent, but they all lack one significant aspect of scalability – Multi-channel product sales. If you know anything about online marketplaces, you know that it isn’t good to put all your eggs in one basket. For example, Amazon sellers shouldn’t limit themselves to only selling on Amazon. 

CollabPay addresses that concern by having greater scalability. It works with the WooCommerce and Shopify platforms, offering greater overall scalability. 

It also has a spotless interface compared to the other options on this list. CollabPay is a brand named for future potential rather than a single purpose. 

Their features include automatic payments, cross-platform connections, and accessible invitations through a simple link. As a comparatively new platform, it will be interesting to see how they compete. With this in mind, they already have some significant features when compared to the competition. Check them out via the CollabPay website for more details.

Vendor Payout FAQs

What is Vendor Payout?

Vendor payout is what you owe to product and service collaborators. Marketplace owners and storefront managers must address vendor payout to ensure they can continue to provide products. 

What is a Vendor?

A vendor falls into three broad categories:

  • Wholesaler
  • Reseller
  • Manufacturer

Vendors typically provide the product to another business, acting as a final point of sale (POS). Once the product goes from the previous reseller to the customer, the last vendor is removed. 

Technically, all businesses that transfer products are vendors. 

How Do I Find Vendors? 

Vendors are on wholesale websites, resale websites, and manufacturing plants. Websites like Alibaba are the most famous examples, but you pay for those products upfront. 

To address deals with vendors that pay on a per-sale basis, you will need to discuss dealings with the vendor. Many manufacturers or wholesalers will require some deposit upfront before you walk out with their product. 

How Should I Pay My Vendors on Shopify & WooCommerce?


You can use a vendor payout app to set up scheduled payments such as CollabPay. It’s essential to have this established before you make any product sales. Otherwise, you might end up owing a great deal of money all at once.


Again you can use a vendor payout app such as CollabPay. This will sync with your WooCommerce store easily.

What Vendor Payout Option Should I Use? 

There are many ways you can pay your vendors. Ultimately, your choice of how to pay vendors changes depending on your comfort level. However, you will want to be sure that your vendors appreciate the time and effort you put into this. 

Rather than burn time with manual calculation methods, having regular automatic payments is a must. Automation allows you to focus on high-level business efforts like brand promotion and adding new vendors. That’s why you need a vendor payout app. 

If you would like additional help on your Shopify store, check out our Shopify tips and tricks article. We hope this article helps you out. Thanks for reading!

About Author

Eli is sufficient in Shopify & general tech. He loves writing and talking about his interests in technology and ecommerce.