Last Updated: 24 December 2025
Anyone planning to sell online in India eventually reaches the same decision point: Where should I sell – online store or Marketplaces?
Online Store Vs Marketplaces- Where Should You Sell Online In India?
Over the years, both options have been promoted strongly.
Marketplaces are often positioned as the fastest way to get sales, while online stores are presented as the foundation for long-term growth.
In practice, both the options have their own advantages and limitations.
Most sellers face difficulties not because they chose the wrong platform, but because they chose without fully understanding how each channel actually works in the Indian ecommerce environment today.
This article looks at online store vs marketplaces from a practical, seller-focused perspective, based on how platforms, costs, and customer behavior have evolved in India.
Update Note (2025): This article has been updated to reflect the latest rules, charges, and platform policies applicable to Indian online sellers.
How Online Selling in India Has Changed Over Time
A few years ago, selling on marketplaces was relatively straightforward. Competition was lower, paid advertising was limited, and sellers could generate reasonable margins with basic listing optimization.
That environment has changed.
Marketplaces today are crowded and highly competitive.
Sellers compete not only with other small businesses, but also with large brands, private labels, and aggregators operating at scale. Visibility increasingly depends on advertising, and margins are under constant pressure from fees, returns, and pricing competition.
At the same time, setting up an online store has become technically easier.
Website platforms, payment gateways, and logistics integrations are more accessible than before. However, ease of setup has not removed the operational complexity of running a profitable store.
Because of this, the decision is no longer about choosing the “better” option. It is about choosing the right channel based on business stage and goals.
Online Store Vs. Marketplaces
Selling on Marketplaces in India: Advantages and Challenges
1. It is easy to get started as a seller on marketplaces. Just enter your details and upload documents. You are ready to sell.
You can start with low investment of as low as 5000 rupees or even less if you purchase from wholesaler after receiving order.
2. Marketplaces continue to attract sellers because they solve one major problem immediately: customer trust. Indian buyers are already comfortable with marketplace payments, delivery, and returns.
For a new seller, this reduces the effort required to generate initial orders.
3. Marketplaces also provide access to existing demand. Products with clear search intent can start receiving orders faster than they would on a new standalone website.
4. Marketplace customers give feedback and ratings to sellers. This feedback helps you make improvements in your offerings. With good ratings, you win the trust of customers which leads to increased sales volume.
5. When you start selling at the marketplaces, you learn the tips and tricks and gain the experience of selling online and are prepared to launch big business.
RELATED: Best Online Marketplaces In India That Can Make You Rich
However, marketplace selling comes with limitations.
Sellers do not own customer data, have limited control over communication, and operate within platform rules that change over time.
Products are easy to replicate, and price competition is constant.
Many sellers see sales increase without seeing profits grow at the same pace. Over time, rising advertising costs, commissions, and logistics charges make margins harder to maintain.
When Marketplaces Are the Right Choice for Sellers
1. Marketplaces make sense when speed and reach are important.
They are useful for testing products, entering competitive categories, and selling items where branding plays a limited role in the buying decision.
2. For sellers who are still learning how online operations work, marketplaces also provide exposure to real customer behavior and logistics requirements.
3. Marketplace customers give feedback and ratings to sellers. This feedback helps you make improvements in your offerings. With good ratings, you win the trust of customers which leads to increased sales volume.
4. When you start selling at the marketplace you learn the tips and tricks and gain the experience of selling online and are prepared to launch big business.
Problems usually begin when marketplaces are treated as the only long-term strategy rather than a stepping stone.
Selling Through Your Own Online Store in India
Online stores are better suited for brands or companies who need online presence and to supplement or complement their offline activities. Its easy to create your own brand with an online store.
You can easily differentiate yourself like any other big company on the internet.
There is a fierce competition on marketplaces. Customers have a choice of buying from other customers selling similar products at a better price or selling with special offers.
When you are running your own store, customers see only your offerings unless they move to some other website.
While selling on marketplaces, you are competing with other buyers, so you have to lower prices which reduces your profits. When you sell on your own online store, you can fix prices without bothering to lower below certain point.
As a new seller, it can be bit risky to open your online store as it involves heavy investment and you have to keep inventory. You also have to invest in warehouse, logistics and advertising to make your brand popular.
Unless you are a reputed brand, have a unique idea & have identified a niche, selling at marketplace is a good option.
Unlike marketplaces, a standalone store does not inherit trust. Indian customers expect clear policies, responsive support, and reliable delivery, especially when cash on delivery is offered. These expectations must be managed directly.
Traffic acquisition is another key difference. Orders depend on marketing efforts such as advertising, content, or partnerships. Results are usually slower in the beginning, but customer relationships and insights build over time.
When managed well, an online store allows sellers to improve margins, build repeat customers, and reduce long-term dependence on external platforms.
If you have made up your mind to open store, Shopify is the best SAAS platform where you can start building your store.
Why Many Online Stores Struggle in India
Most online stores struggle not because of design or technology, but because of operational gaps.
Delivery delays, unreliable logistics partners, slow responses to customer queries, and unclear return processes reduce trust quickly. Unlike marketplaces, there is no buffer between the seller and the customer.
Indian ecommerce places high importance on delivery experience and communication. Sellers who underestimate this often see low conversions and high return rates, even with good products.
Cost Comparison: Online store vs Marketplaces
Marketplaces often appear cheaper at the start because costs are linked directly to orders. There is little upfront investment, but variable expenses increase as sales grow.
Online stores usually require upfront spending on marketing, tools, and customer support. Over time, repeat purchases and better retention help reduce the average cost per order.
The difference is not only financial. Marketplaces focus on transaction efficiency, while online stores reward consistency and long-term execution.
Online store vs Marketplaces
Customer Behaviour on Marketplaces vs Brand Websites
On marketplaces, customers compare prices quickly and switch sellers easily. Loyalty is limited, and returns are relatively frictionless.
On brand websites, customers spend more time evaluating credibility. They expect transparency, communication, and post-purchase support. A positive experience increases the likelihood of repeat purchases.
Understanding this difference helps sellers decide where to focus their efforts.
Logistics and Returns: A Key Factor in Online Selling
Logistics plays an important role in online selling in India.
Marketplaces provide structured logistics systems but enforce strict performance standards. Online stores offer flexibility but require active management of couriers, COD verification, and returns.
Sellers who invest time in logistics usually perform better across all channels.
Using Marketplaces and Online Stores Together
Many experienced sellers use both channels with a clear purpose.
Marketplaces are used for discovery, testing, and volume. Online stores are used to build customer relationships, improve margins, and encourage repeat purchases.
This approach reduces dependency on any single platform and provides stability as market conditions change.
Final Thoughts
A new seller should start with selling on marketplaces first. Get some experience and build your customer base. For many Indian sellers, the most practical approach is to start with marketplaces and gradually build an online store as the business matures.
Marketplaces are suitable for faster entry and demand validation. Online stores are important for long-term control and customer ownership.
The goal is not to choose one option over the other, but to build a selling system that can adapt over time.
It should be a part of your business strategy to have your own online store once you have enough experience.
By running your own store along with selling on marketplaces you will be able to make your brand popular and will build a really big business.
Online selling in India continues to evolve. Sellers who focus on fundamentals—pricing discipline, logistics reliability, and customer experience—are better positioned for sustainable growth.
Frequently Asked Questions
Should I start selling on a marketplace or my own website in India?
If you are new to online selling, marketplaces are usually the easier starting point because customers already trust them. They help you understand demand, pricing, and logistics quickly. A personal website makes more sense once you know what sells and want long-term control.
Can I sell on marketplaces and my own online store together?
Yes. Many Indian sellers do this successfully. Marketplaces are used for reach and volume, while the online store is used for repeat customers and better margins. Treat them as separate channels with different goals.
Is running an online store in India costly?
In the beginning, yes. You may spend on ads, tools, and customer support before seeing consistent sales. Over time, costs reduce if you focus on repeat customers and efficient logistics.
Why do many Indian online stores fail despite good products?
Most failures happen due to weak operations, not bad products. Poor delivery experience, high COD returns, slow responses, and unclear policies reduce trust and conversions quickly.
Do marketplaces reduce profit margins over time?
For most sellers, yes. Commissions, advertising costs, returns, and pricing competition increase as categories become crowded. Sales may grow, but profits often don’t.
Is building a brand important for selling online in India?
Branding becomes important if you want repeat customers, pricing power, and independence from platforms. For purely price-driven products, it matters less.
How long does it take for an online store to become stable in India?
There is no fixed timeline. Most sellers need a few months to understand customer behavior, reduce returns, and improve delivery reliability. Stability comes from systems, not speed.
