External Marketplaces on Shopify: Your Guide to Custom Payments and App Approvals

Hey everyone,

I recently jumped into a really insightful discussion happening in the Shopify community, and it touched on a point of confusion that I know many developers and store owners grapple with: navigating sales channels and third-party payment processing. It’s a classic head-scratcher, especially when you’re building something innovative that doesn’t quite fit the standard Shopify App Store mold.

Our community member, kenshin9, brought up a fantastic point about their experience trying to launch an app. They’re building what sounds like a really cool external marketplace – think along the lines of an Amazon or Etsy, but for Shopify merchants. Their platform drives customers, handles its own checkout process using Stripe, and acts as the Merchant of Record. The goal? To integrate with Shopify stores, syncing products and pushing orders back into the merchants' admin. Sounds perfectly legitimate, right?

Well, when kenshin9 submitted their app for approval (as a public unlisted app, not aiming for the App Store spotlight), it got paused. The reason? "Bypassing Shopify Checkout." This is where the confusion really kicks in, and honestly, it’s a common pitfall.

The Sales Channel Conundrum: External Checkout vs. Shopify Checkout

kenshin9 hit the nail on the head when they pointed out the seemingly contradictory information in Shopify’s documentation. On one hand, the sales channel docs clearly state that a platform can be the Merchant of Record and handle its own checkout and payment, explicitly mentioning "marketplaces like Amazon and Walmart." This perfectly describes kenshin9's use case!

But then, other App Store requirements seem to imply that all apps must "take customers to Shopify’s Checkout." It’s enough to make you wonder if your business model is even viable. And let me tell you, you’re not alone in feeling that confusion. Even kenshin9 mentioned that LLMs couldn't give them a clear answer, which speaks volumes about how nuanced this distinction is.

The good news, as topnewyork eloquently clarified in the thread, is that your business model is absolutely valid if you’re truly operating as an external marketplace and acting as the Merchant of Record. The likely culprit for the pause? Shopify’s automated review system. It’s designed to flag anything that looks like it's trying to circumvent Shopify Payments or Shopify Checkout for standard apps. But true sales channels are a different beast entirely.

Two Paths to Integration: Choose Your Adventure

So, how do you navigate this? topnewyork laid out two excellent options, and the best one for you depends on your specific needs regarding merchant onboarding and app visibility.

Option 1: The Custom App Route (Easiest & Safest for Specific Integrations)

If your platform works with a smaller, curated group of merchants whom you onboard manually, this is often the most hassle-free way to go. You completely bypass the public App Store review process because, well, you’re not making a public app!

Here’s how you can make this work:

1. No Public App Submission: You don't submit your app to the Shopify App Store at all.
2. Merchant-Generated API Credentials: Your merchants will go into their own Shopify admin panel.
3. Create a Custom App: They’ll navigate to Apps > App and sales channel settings > Develop apps (or similar path depending on Shopify updates).
4. Grant Access: They'll create a new Custom App for your platform and grant it the necessary API scopes (e.g., read_products, write_products, read_orders, write_orders).
5. Share Credentials: They'll generate and provide you with the API credentials (API key, API secret, access token) for their store.
6. Integrate: You then use these credentials in your platform to sync products and push orders.

With this approach, Shopify won't review or even "care" about your Stripe checkout because it’s a direct, private integration between your platform and specific merchant stores, not a public-facing app. It's clean, efficient, and avoids a lot of potential review friction.

Option 2: Appeal as a Marketplace Sales Channel (for Broader Merchant Adoption)

If your vision involves many merchants signing up for your platform independently and you want that smooth, one-click "Install App" experience via OAuth, then appealing the initial pause is your best bet. This path confirms your status as a legitimate sales channel within Shopify’s ecosystem.

kenshin9 specifically asked, "how can I do the appeal or even reply to the Shopify review team? I don’t really see any way of doing that from the partner portal." This is a crucial question! While the partner portal might seem limited, there are ways to communicate:

1. Check Your Submission Status: Go to your app submission within the Partner Portal. There should be a section related to the "paused" status or review feedback. Look for options like "Contact Review Team," "Reply to Review," or a specific appeal link. Sometimes, the initial notification email about the pause will also contain instructions or a direct link for communication.
2. Use the Shopify Partner Support: If you can't find a direct reply option on the submission page, open a support ticket through the Shopify Partner Dashboard. Navigate to Support and initiate a conversation, referencing your app submission ID and the specific issue.
3. Craft Your Appeal Message Carefully: This is where topnewyork’s advice is golden. When you communicate with the review team, be explicit and clear. State something along these lines:

   "We are building an External Marketplace Channel where our platform acts as the Merchant of Record, which is fully supported under Shopify’s Sales Channel terms. Our platform drives customers, handles its own checkout process via [Your Payment Processor, e.g., Stripe], and then pushes orders back to the merchant's Shopify store. We understand that our app's functionality might trigger automated flags for bypassing Shopify Checkout, but as an external sales channel, this is an expected and supported behavior for our business model."

   Make sure to reference the specific Shopify documentation that supports your claim (e.g., the section on sales channels handling their own checkout and being the Merchant of Record).

4. Be Prepared to Provide Details: The review team might ask for more information about your business model, how you handle transactions, and your user flow. Be ready to provide clear, concise answers.

By clearly articulating your app's purpose as an External Marketplace Channel and emphasizing your role as the Merchant of Record, you’re helping the human reviewers understand that your app isn't trying to bypass Shopify Checkout in an unsupported way, but rather operating within a legitimate, distinct sales channel model.

Ultimately, whether you choose the direct Custom App route or go through the appeal process, the key is understanding Shopify's distinction between a standard app that *should* use Shopify Checkout and a true sales channel that *can* operate with its own checkout flow. Both options are viable, and it’s about picking the one that best suits your project’s scale and desired merchant experience.

It’s a tricky area, but armed with this clarity from the community, you can definitely move forward with confidence!