Latest / The DTC Marketing Podcast with Fexingo: Direct-to-Consumer Brands, Shopify, and E-Commerce Growth / How DTC Brands Use Shopify Collabs for Creator Partnerships
Transcript
- Lucas: So I want to talk about a tool that a lot of DTC brands are quietly adopting — Shopify Collabs. It's not new — Shopify acquired the app back in 2021 — but the adoption curve has really steepened over the last twelve months. Luna: Collabs being their creator and affiliate management platform, right? I've seen it pop up more in brand job postings too. Lucas: Exactly. And I think the reason is that brands are tired of the manual spreadsheet and dm approach to influencer partnerships. Collabs gives them a structured way to recruit creators, manage commission rates, and track performance — all inside Shopify. Luna: Does it replace something like ShareASale or Impact? Or is it more complementary? Lucas: For smaller DTC brands — say under ten million in revenue — it can absolutely be a replacement. You don't need a dedicated affiliate network when you can invite creators directly through a link. The commission structure is fully customizable: flat rate, percentage, tiered, even one-time bonuses for top performers. And the creator gets a dashboard where they can see clicks and conversions in real time. Luna: That real-time piece is big. Creators I've talked to say they hate waiting thirty days for a report from some network. If they can see a sale happen and the commission appear instantly, they're more motivated to keep posting. Lucas: Right. And there's a discovery component too — brands can set up a public landing page where creators can apply to join the program. So you're not just relying on your own outreach. You can have creators come to you. One supplement brand I looked at — does about twenty million a year — they opened their Collabs page in March and got seventy creator applications in the first week. Luna: Seventy applications? That's impressive. What were they offering? Lucas: Twenty percent commission on first purchase, then fifteen percent recurring. Plus a free product sample kit with the welcome email. They said their customer acquisition cost dropped from about forty-five dollars to under twenty-seven for affiliate-sourced customers. That's a forty percent reduction. Luna: Forty percent is huge. But I wonder — does the tool lock you into Shopify's ecosystem in a way that's hard to leave? If you're a brand that might migrate to BigCommerce or something later, you're rebuilding that whole network. Lucas: It's a fair concern. Collabs doesn't export your creator relationships in a neat CSV — you'd have to manually re-invite everyone. So there's definitely some lock-in. But for most DTC brands, that's a trade-off they're willing to make for the seamless integration. The checkout flow stays on your domain, the discount codes auto-generate, and you avoid the clunky tracking links that break half the time. Luna: Let's talk about the tiered rewards. How are brands structuring those to actually drive performance? Lucas: A common setup I've seen is a three-tier system. Tier one — anyone who signs up gets a base fifteen percent. Tier two — if you generate over five hundred dollars in sales in a month, you go to twenty percent. Tier three — over two thousand dollars, you get twenty-five percent plus a monthly bonus of, say, a hundred dollars in store credit. That incentivizes creators to keep pushing, and it rewards your top performers without giving away margin to everyone. Luna: And the creators can see their progress toward the next tier in their dashboard. That gamification element is smart. It's like a loyalty program for your partners instead of customers. Lucas: Exactly. And the brand can set the rules so that commissions are lifetime — if a creator brings in a customer, they get a cut of every future order from that customer. That shifts the incentive from one-off promotion to ongoing brand advocacy. A skincare brand I spoke with said their lifetime value from Collabs-sourced customers was thirty percent higher than from paid social. Luna: But lifetime commissions can get expensive if a creator goes viral and brings in ten thousand customers. Is there a cap? Lucas: You can cap it. Some brands set a maximum commission per creator per month — say five thousand dollars — so you don't get a surprise six-figure payout. Others limit the commission window to twelve months. The platform gives you that flexibility. The key is to model it out before you launch. If your average order value is fifty dollars and you're paying twenty percent commission, you need the repeat purchase rate to be high enough that the math works. Luna: What about smaller brands that don't have a big creator network yet? Is Collabs useful for them? Lucas: Absolutely. In fact, I think it's most powerful for smaller brands because it lowers the barrier to entry. You don't need a budget for an affiliate agency. You can start by inviting five micro-creators who already follow you on Instagram — maybe they're customers themselves. Offer them a free product and a fifteen percent commission. If they each generate just five hundred dollars in sales, that's twenty-five hundred dollars in revenue for maybe fifty dollars in product cost. That's a solid return. Luna: And once you have a few early success stories, you can feature them on your Collabs landing page as social proof. Other creators see that and think, 'I want in.' Lucas: Exactly. The network effect is real. One thing I'd caution against is setting commission rates too low. Some brands start at five percent because they're nervous about margin. But creators compare notes — they know if another brand in your space is paying twenty. You'll struggle to recruit anyone worthwhile at five percent. Fifteen to twenty is the sweet spot for most DTC products under a hundred dollars. Luna: That makes sense. Now, I know this tool has been around for a few years, so what's changed recently that's driving adoption now? Lucas: A couple things. First, Shopify made the app free for all merchants — it used to require a paid plan. That removed the friction for smaller brands. Second, they added better analytics — you can see top-performing creators, which products they're selling, and compare conversion rates across tiers. Third, and this is the big one — they integrated with Shopify Audiences, so brands can target lookalike audiences based on customers acquired through Collabs. That closes the loop between creator-driven sales and paid acquisition. Luna: So you can take the data from your top creator's audience and feed it into Facebook ads. That's powerful. Lucas: It is. And it means the brand can scale what's working without relying solely on the creator's ongoing posts. If a creator brings in a thousand customers, you can build a lookalike and go after similar people with your own ads. The creator still gets their commissions on any direct sales, but the brand can amplify the impact. Luna: I want to push back a little, though. Doesn't this create a dependency on Shopify? If your store goes down or you have a dispute, you're locked into their affiliate system. And creators have complained about delayed payouts. Lucas: That's a fair point. The payout timing is set by the brand — you can do instant, weekly, or monthly. But if the brand delays, the creator has no recourse within the platform. And if you ever want to leave Shopify, you lose the whole affiliate infrastructure. So I'd recommend brands think of Collabs as a starting point, not necessarily an endgame. For a brand doing under fifty million, it's probably enough. Above that, you might need a dedicated platform like Post Affiliate Pro or Refersion. Luna: Where do you see this going next? Any feature on the roadmap that you're watching? Lucas: I've heard rumors that Shopify is working on a creator marketplace within Collabs — basically a directory where brands can browse and invite vetted creators by category, follower count, and engagement rate. If that launches, it could become the go-to discovery tool for DTC brands. Also, I'd expect deeper integration with Shopify's Shop app, so creators can share a 'shop now' link that opens directly in the app for a seamless checkout. Luna: That would be huge for mobile conversion. Right now, the affiliate flow is still web-based — creator shares a link, customer goes to the browser. If it's in-app, you're cutting out steps. Lucas: Exactly. And the tracking becomes more reliable because the whole journey stays within Shopify's ecosystem. No more worrying about cookie expiration or ad blockers stripping affiliate parameters. Luna: You know, speaking of tools that genuinely help small teams punch above their weight — this is one of those areas where listener support makes a real difference. A couple of dollars a month is genuinely what keeps these episodes ad-free and focused on practical tactics like Collabs. Lucas: Yeah, and it's not about big pledges — it's the small, consistent contributions that let us avoid sponsors and keep the content independent. If these episodes have helped you think about your marketing differently, buy me a coffee dot com slash fexingo is where that support goes. It genuinely covers hosting and research costs. Luna: And it keeps us free to dive deep on whatever tool or tactic is actually moving the needle. So thanks to anyone who's chipped in. Lucas: Alright, back to Collabs. One last thing I want to mention: if you're a brand that sells high-ticket items — say over two hundred dollars — consider using Collabs with a flat fee per sale instead of a percentage. A flat fifty dollars per sale can be more attractive to creators than a twenty-five percent commission that only gives them fifty anyway on a two-hundred-dollar item. It simplifies the math for them. Luna: That's a great tip. And for low-ticket items, percentage works better. No one wants five dollars for selling a twenty-dollar candle. Lucas: Right. So the takeaway is: Shopify Collabs is a flexible, low-cost entry point for DTC brands to build a creator affiliate program. Start small, tier your commissions, and use the data to fuel your paid acquisition. But keep an eye on platform dependency and plan for what you'll do if you outgrow it.