There is one decision to make first, and almost everything else follows from it.
Do you sell on a marketplace, or on your own website?
People treat this as a preference. It is arithmetic, and the number that settles it is your gross margin.
Short version before the detail. Selling on Amazon or Flipkart will cost you somewhere between 25% and 35% of your selling price once everything is counted. Selling on your own site costs you far less per order and gives you nothing to sell into on day one, because nobody knows the site exists. Most people should start on a marketplace to find out what actually sells, and move margin onto their own store once they know.
And a rule that catches nearly every new seller: the moment you list on a marketplace, GST registration stops being optional, whatever your turnover.
Where 25% to 35% actually comes from
Sellers look at the commission and stop there. The commission is about half the story.
On Amazon India the referral fee runs 5% to 25% depending on category, plus a closing fee of roughly Rs 9 to Rs 30 per order. Flipkart is 4% to 22% by category, with closing fees from Rs 5 to Rs 50.
Then add the parts that do not appear on the rate card. Fulfilment, if you use FBA or Flipkart’s warehouses. Payment processing, around 2% to 2.5%, with cash on delivery costing more than prepaid. Returns, which in fashion are brutal. And the advertising you have to run simply to stay visible on your own product page, which is not optional in any competitive category and which most first-time sellers do not budget for at all.
Stack those and you land at 25% to 35% of the selling price.
If your gross margin is under 40%, a marketplace-only business does not work, and no amount of volume fixes it.
Do that sum before you do anything else. It takes ten minutes and it decides your whole strategy.
What the marketplace gives you that your own store cannot
Having said all that, I would still start most people on a marketplace, and the reason is simple.
Demand already exists there. Somebody is on Amazon at 10pm with a payment method saved, actively looking for the thing you sell. Your own website on launch day has none of that, and the honest cost of building it is months of SEO or a paid acquisition budget that will comfortably exceed the 30% you were trying to avoid.
So the sequencing that works for most small sellers is this. Launch on a marketplace to find out which products actually move, what people search for, what the return rate looks like and what price the market accepts. That is expensive market research and it pays for itself.
Then build your own store and work on shifting your repeat customers onto it, because that is where the margin lives and where you own the customer relationship rather than renting it.
Two changes worth knowing about this year
Flipkart stopped charging commission on products priced under Rs 1,000 in November last year, and extended zero commission to all fashion products regardless of price in July this year. If you sell either, run your numbers again, because the comparison against Amazon may have flipped.
ONDC is the other one. Commission sits around 3% against the 15% to 25% the big platforms charge on most categories. Adoption is still uneven and the buyer experience varies by app, so treat it as a channel worth testing rather than a replacement, but at that commission gap it is worth an experiment.
GST, which is the part people get wrong
This is the one that causes real trouble, so be careful with it.
If you sell through an ecommerce operator like Amazon, Flipkart or Meesho, GST registration is mandatory from your first rupee of sales. The usual thresholds, Rs 40 lakh for goods and Rs 20 lakh for services, simply do not apply to marketplace sellers. Plenty of people discover this after listing.
There is one narrow exemption. If you sell only within your own state and stay under the turnover threshold, you can avoid full registration, but you still have to obtain an Enrolment ID on the GST portal before a marketplace will let you list. That exemption stops applying the moment you ship to another state, which for most sellers is almost immediately.
Separately, the marketplace deducts TCS at 1% on the net taxable value of your sales and deposits it against your account. That is not a cost, it is money you reconcile and claim, but it does affect your cash position month to month.
Rules here change and the details matter. Get an accountant to confirm your position rather than taking a blog post’s word for it, including this one.
Payments and delivery, briefly
UPI has become the default for prepaid orders and the checkout should reflect that rather than treating cards as primary.
Cash on delivery is still a meaningful share in most categories, and it is a working capital problem more than a fee problem. Your money sits with the courier or the platform until remittance, so a business growing quickly on COD can be profitable on paper and short of cash in the bank. Ask about remittance cycles before you pick a logistics partner, because the difference between 48 hours and two weeks is the difference between funding your next stock order and not.
The layer that actually closes the sale
For small Indian sellers, a large share of orders get finalised on WhatsApp rather than on any website.
Somebody sees the product, has one question about size or delivery time, and messages instead of buying. Answer in four minutes and you get the order. Leave it overnight and you do not.
Put a click-to-WhatsApp link on the product pages of your own store with a pre-filled message that names the product, so you know what they are asking about before you reply. I have written more about the WhatsApp side of this, including the pricing changes coming in October, which are worth understanding before you build a process around it.
Before lunch
Work out your gross margin per product, honestly, including packaging and the returns you actually get rather than the ones you hope for.
If it is comfortably above 40%, marketplaces are a reasonable place to start and you can afford the tax they take while you learn.
If it is below that, the marketplace route will quietly consume everything, and you need either a higher price point, a different category, or a direct channel from the start.
If you’d like to talk through which route fits your product, drop me a line on email, WhatsApp or LinkedIn and we can have a quick chat. I’m contracted full time so this isn’t a pitch. My notes on how I work go into more detail.