Is Shopify a Marketplace Facilitator

Is Shopify a Marketplace Facilitator?

5 mins

As e-commerce becomes more and more popular, businesses are looking for ways to sell their products online. 

Shopify is a platform that allows businesses to create their own online store, and there is a lot of confusion about whether or not Shopify is a marketplace facilitator.

While Shopify is an e-commerce platform, it is not considered a marketplace facilitator because it does not own or operate any of the underlying inventory.

Rather, Shopify provides the tools and infrastructure for businesses to set up their own online stores. 

What is Market Facilitator and How Does It Work?

A market facilitator is a company or individual that helps to bring buyers and sellers together in a market.


In many cases, market facilitators provide an online platform that allows buyers and sellers to connect and transact business. 

While market facilitators can play an important role in helping to promote competition and efficiency in a market, they are not involved in the actual transaction between buyers and sellers.

Instead, their role is simply to facilitate the connection between buyers and sellers. 

In some cases, market facilitators may also provide other services, such as offering information about prices or products, or assisting with the delivery of goods.

Why is Shopify Not a Marketplace Facilitator?

There are a number of reasons why Shopify is not a marketplace facilitator. 

First, Shopify does not have the necessary infrastructure in place to support marketplace transactions. 

Second, Shopify does not have the necessary relationships with suppliers to enable it to facilitate marketplace transactions.

Finally, Shopify does not have the necessary technology to support marketplace transactions.

How To use Shopify As Market Facilitator?

Here’s How To use Shopify As Market Facilitator:

Step-1. Choose a marketplace model:

There are two main types of marketplaces: product-based and service-based. Decide which type of marketplace you want to create, and then find a Shopify plan that fits your needs.

Step-2. Set up your Shopify account:

Create a new account or log into your existing one. Then, add your desired domain name and choose your Shopify plan.

Step-3. Install the Marketplace App:

To turn your Shopify store into a marketplace, you’ll need to install the Marketplace App from the Shopify App Store. 

This app will give you all the features you need to run a successful marketplace, including multiple seller accounts, product reviews, and more.

Step-4. Configure your settings

Once you’ve installed the Marketplace App, take some time to configure your settings according to your preferences. 

For example, you can set up commission rates, shipping options, and payment methods.

Step-5. Add products or services

The next step is to add products or services to your marketplace. If you’re creating a product-based marketplace, add products by sourcing them from suppliers or manufacturers.

If you’re creating a service-based marketplace, add services by creating listings for service providers.

Step-6. Promote your marketplace.

The final step is to promote your marketplace to potential buyers and sellers. 

You can do this by creating marketing materials, such as social media posts, blog articles, or email newsletters. 

You can also run ads on Google or Facebook, or participate in online communities related to your industry.

Is Etsy a Marketplace Facilitator?

Etsy is a marketplace facilitator. This means that it provides a platform for buyers and sellers to connect and transact business. 

Etsy does not take possession of goods, provide credit, or facilitate payments. All of these activities are handled by the members themselves. 

Etsy’s role as a marketplace facilitator has made it very popular with small businesses and individual sellers. 

Since Etsy does not handle payment processing or product fulfillment, sellers can save money on transaction fees.

Additionally, Etsy’s reputation as a safe and easy-to-use platform helps to attract buyers who may be hesitant to purchase from an unknown seller on another site. 

Does Shopify Collect and Remit Sales Tax?

Shopify does not automatically collect and remit sales tax for its merchants. However, it does provide the tools and resources necessary for merchants to comply with their local sales tax laws. 

In addition, Shopify offers a free Sales Tax Calculator that can help merchants calculate the appropriate sales tax for their products and services. 

Overall, Shopify provides everything needed for merchants to collect and remit sales tax, making it quick and easy to comply with the law.

Does Shopify Collect Sales Tax for Sellers?

As an e-commerce platform, Shopify is required to collect sales tax on behalf of its sellers in certain states. 

The states where Shopify currently collects sales tax are:

  • Arkansas, 
  • Colorado, 
  • Connecticut, 
  • Georgia, 
  • Hawaii, 
  • Idaho, 
  • Indiana, 
  • Iowa, 
  • Kentucky, 
  • Maine, 
  • Maryland, 
  • Massachusetts, 
  • Michigan, 
  • Minnesota, 
  • Nebraska, 
  • Nevada, 
  • New Jersey, 
  • New York, 
  • North Carolina, 
  • Ohio, 
  • Oklahoma, 
  • Pennsylvania, 
  • Rhode Island, 
  • South Carolina, 
  • Tennessee, 
  • Vermont, and 
  • Virginia. 

If you are selling products to customers in any of these states through Shopify, the platform will automatically collect and remit the appropriate amount of sales tax on your behalf. 

For more information on how Shopify handles sales tax collection and remittance, please see our help center. 

What Companies are Marketplace Facilitators?

A marketplace facilitator is a company that operates an online marketplace or platform that brings together third-party sellers and buyers of goods and services. 


The facilitator may also provide other services to facilitate the transaction, such as payment processing, order fulfillment, customer service, and marketing. Some examples of companies that are marketplace facilitators include Amazon (which operates the Amazon Marketplace), eBay, Airbnb, and Uber.

These platforms enable customers to find and purchase products and services from a wide range of sellers without having to deal with each seller individually. 

Marketplace facilitation can be a very successful business model; for example, Amazon generated $177 billion in sales through its marketplace in 2017

However, it can also pose some challenges, such as managing fraud and ensuring compliance with laws and regulations.

Does Shopify Have a Marketplace?

Shopify does have a marketplace! The Shopify marketplace is a great place to find apps and plugins to help you customize and grow your online store. 

There are over 2,000 apps and plugins available in the Shopify marketplace, so you’re sure to find something that meets your needs.

Is Amazon a Marketplace Facilitator?

Yes, Amazon is a marketplace facilitator. In fact, they are the largest online marketplace in the world.

A marketplace facilitator is a company that provides an online platform for third-party sellers to sell their products.

Amazon operates as a middleman between buyers and sellers on its site, taking a commission from each sale.

Is Paypal Considered a Marketplace Facilitator?

Yes, PayPal is considered a marketplace facilitator. This is because PayPal provides the infrastructure and platform for sellers to conduct business online. 

PayPal also offers buyer protection services, which makes it a safe and convenient place to shop for buyers.

Final Thoughts

Shopify is a great e-commerce platform that has helped many businesses succeed online.

However, it is important to note that Shopify is not a marketplace facilitator. This means that Shopify does not own or operate any of the underlying inventory for the businesses using its platform. 

This distinction is important to keep in mind when considering whether or not to use Shopify for your business.


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