314 | Shopify Invests in Faire. What This Means for You with Katie Hunt
News recently broke that Shopify was closing Handshake, its wholesale sales platform and investing as a shareholder in Faire. Today’s episode is bringing you the news mixed in with a few of my thoughts on the topic. I will be doing a deeper analysis and sharing some research I’ve done within our LABS program - so definitely look for that if you’re one of our LABS members.
As you listen today, please keep in mind that I have no ties to Shopify or Faire, other than I coach thousands of people who use both platforms daily. The opinions expressed today are mine based off of information I’ve read in the news, research I’ve conducted and my general thoughts as someone entrenched in the wholesale world.
Today’s episode is brought to you by our free, on-demand wholesale audio series.
In this audio series I’ll walk you through the biggest mistakes and most common questions folks have when they are starting and scaling wholesale—so you don’t make the same mistakes myself and others did.
You can binge this audio series in less than an hour and you can listen on the go in your favorite podcast player. No fluff here, just concrete action steps and answers to help you simplify and strengthen your wholesale sales.
Shopify & Faire Partnership
In case you missed it, Shopify and Faire have expanded their partnership and Shopify has invested in Faire as a shareholder.
I dug for details about the deal, but both companies declined to disclose how much money changed hands or how big of a shareholder stake Shopify now has in Faire. But, the partnership of these two online platforms is big news.
The partnership brings together two category leaders in retail and wholesale commerce spaces — Faire leading the wholesale and business-to-business (B2B) space and Shopify leading the retail and direct-to-consumer (DTC) space.
Shopify signing on as a shareholder of Faire means that they will have a say in the future direction of Faire. They have a seat at the table to help make decisions at Faire. It also means that Faire is now their recommended wholesale marketplace for Shopify users — including buyers and sellers.
Benefits of the Faire & Shopify Partnership
The press release that was jointly issued by Faire and Shopify highlighted four key features that will roll out in the coming months to “allow businesses to grow and manage their B2B offerings across Faire and Shopify.”
Two are aimed at shop owners who use the Shopify point-of-sale system (POS) in-store and two are aimed at brands that sell on Faire. Let’s go through them one by one.
Benefits for Shop Owners Who Use Shopify
Shop owners will have access to a new Faire buyer app that integrates with their Shopify point-of-sale system, which allows for easy reordering from brands on Faire along with inventory management solutions that will sync Faire orders into their Shopify POS.
The following bullet mentions that new merchants using Shopify can immediately source inventory from more than 100,000 brands on Faire.
I’m curious how this is a new feature because shop owners can and do source these products directly in faire. I’m unclear on how this will make the process easier or faster.
Reading this, I had questions about the retailer vetting process.
Will Faire be checking resale certificates and ensuring that qualified resellers are on the platform? Or will anyone with a Shopify POS account be eligible for a buyer account on Faire?
I see possible red flags here that need to be addressed.
Benefits for Brands that Sale on Faire
The press release says that Shopify brands will be able to “simplify their wholesale distribution by selling through Faire.”
I’m curious how this will roll out and what it means in practice because historically, Faire has limited the number of sellers in different product categories, citing that they didn’t want over-saturation in certain markets or inexperienced wholesale brands on the platform.
Does this new partnership open the gates for anyone with a Shopify account to sell on Faire?
Lastly, Brands on Shopify will be able to add a free Faire-powered Stockist Map on their e-commerce websites to help consumers shop their products locally.
This is a helpful perk, assuming that brands will be able to adjust settings and customize the map to their needs.
For example, many of the smaller independent wholesalers I work with keep stockists on their list for 12-18 months and then remove if they do not have a new order in that time frame.
Larger brands may adjust more frequently — so this isn’t an area where one size fits all.
Initial Thoughts & Questions on the Fiare & Shopify Partnership
So, what are my initial thoughts about all of this…
To be honest, I’m not sure. The information currently available online is vague at best. The press release that Shopify and Faire jointly issued seems to be an educational piece about their individual business models, how they are rolling out features that don’t really feel new, and how they are excited to endorse each other.
On the one hand, I think stronger integrations between the two platforms would make life easier for the brands selling on both of these platforms. I don’t have data points, but I’m sure the overlap in customer bases is quite high between Shopify and Faire.
On the other hand, these are two tech giants who have captured significant market share over the last few years, and consolidated power like this in any industry concerns me.
With the limited information available, it’s hard to know how this will impact the sellers and buyers on Faire and Shopify. I’m unclear on what the effects will be on your business.
And I have a lot of questions.
Will Faire be an open market, or will they maintain requirements about who can buy and sell on the platform?
Will they vet buyers to ensure they are qualified and legally allowed to make wholesale purchases? This is not only important to the integrity of Faire but could also raise legal compliance issues for the brands selling on Faire if stores haven’t been properly vetted.
How will they approve or decline sellers on Faire? Does anyone with a Shopify account qualify to sell wholesale on Faire whether they have wholesale experience or not? If so, this could lead to a diluted marketplace with inexperienced sellers, which means buyers will have to sift through more brands and products to find what they need and that detracts from the buyer experience.
What does this mean for folks who have their own Shopify wholesale site on their own domain?
Will Shopify discontinue the use of wholesale apps on their sites and prevent brands from running wholesale orders through their own sites where they have more control?
What does this mean for the commission structure? We know Faire’s revenue comes from commission fees on transactions completed through its platform. Will brands selling wholesale through their private Shopify website be forced to pay Faire commissions on those orders?
Is this more of a partnership based on technological ease and integration enhancements? Or are they looking to expand the cross-selling opportunities between Shopify & Faire users? Maybe a combination of both?
And while this isn’t a question… it makes me uneasy that two online commerce platforms have such a large market share.
Recommendations for Our Proof to Product Community Members
My recommendations to the makers in our community who utilize these platforms.
Faire & Shopify are Tools!
Remember that Faire and Shopify are tools.
They are two of many tools available to you in your business toolbox — just like your:
shipping solutions
CRMs
Leverage these tools for the benefits they offer but also don’t become so reliant on them that you have all your eggs in one basket.
Stay Alert to the Marketplace
Also, stay alert and pay attention to what’s going on in the marketplace, announcements, and changes that are being made.
I’m not suggesting that you change your business practices to adapt to someone else’s algorithms or rules, but rather stay informed so that you can make the best decisions for your business.
Change is Inevitable
And lastly, change is inevitable. I’m hopeful we’ll receive additional updates and feature announcements as this partnership develops.
Stay Up to Date with the Faire & Shopify Partnership
The best way to stay up to date with what is happening is to join us inside of LABS, our membership for product-based businesses looking to streamline & scale their businesses.
We will continue this conversation inside of our LABS community and I’ll update you with new information as this develops and I learn more.
I also have some interesting data points and opinions to share about market share and valuation of these companies. I’ll dive deeper into this in our LABS community.
If you’re not in LABS, request your invitation to join our membership community so you can stay up-to-date.
Quick Links
Here is a quick recap of links to other helpful blogs and podcasts shared in this post.
If you have ever wanted to pick my brain, or get my eyes and ears on your business, Proof to Product LABS is the place to do it.
We have monthly group coaching calls and a wide range of On Demand training specifically for product-based business owners. We open up the doors a few times a year so be sure to sign up to learn more!
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Connect with Katie Hunt
Katie Hunt is a business strategist, podcaster, mentor and mama to four. She helps product based businesses build profitable, sustainable companies through her conferences, courses and coaching programs.
Website: prooftoproduct.com | Instagram: @prooftoproduct
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