Marketplace or D2C: where to start

Marketplace vs D2C is usually argued as a question of margin. For a brand looking for its first orders, it is a question of which work to take on first: selling where shoppers already search, or building demand for a storefront you own.

What each route gives you

A marketplace gives you shoppers who are already searching and a checkout they already trust. A D2C (direct-to-consumer) storefront gives you the customer, the price and the presentation, but no shoppers until you bring them. Everything else follows from that trade.

On Amazon, Flipkart, Meesho, Myntra or Ajio, the platform brings the traffic, takes the payment and sets the rules. On a Shopify or WooCommerce storefront, you set the rules and keep the relationship, and every visitor is one you earned or paid for.

Marketplaces already reach shoppers across India, in the metros and in smaller towns alike. A new storefront reaches only the people your advertising, search results and social posts bring to it.

The table sets the two routes side by side on the questions that decide a first launch.

What a marketplace costs you

A marketplace charges you in fees, in returns and in control. The fees are on the rate card in your seller panel; returns and lost control show up later, in settlements and in decisions you no longer make yourself.

• Fees. Commission on each sale, usually a percentage that varies by category and price, plus fixed or closing fees and shipping fees that depend on weight and distance. Each marketplace sets its own and revises them.
• Returns. Customer returns, and RTO (return to origin: orders that come back undelivered), cost you shipping both ways and sometimes the product. In categories where fit matters, such as clothing and footwear, plan for them from the start.
• Advertising. A new listing with no sales history rarely ranks on its own, so budget for sponsored listings inside the marketplace from launch.
• Payment timing. Payouts arrive on the marketplace’s cycle, net of fees and of deductions such as TCS (tax collected at source under GST).
• Control. The marketplace decides how listings look, which policies apply and whether your account stays live. Customer contact details are masked or limited.

None of this is a reason to avoid marketplaces. It is a reason to price for them properly, before the first listing goes live rather than after the first settlement arrives. That per-unit arithmetic is where marketplace account management should start.

What a D2C storefront costs you

A D2C storefront takes no marketplace commission, then charges you in other ways: building and running the store, bringing every visitor to it, and doing the customer service a marketplace would otherwise do for you.

• The store. A Shopify plan, apps and any platform transaction fees, or WooCommerce hosting, plugins and upkeep; a theme, product photography and copy. Our comparison of Shopify vs WooCommerce in India weighs the two.
• Payments. Gateway fees on prepaid orders, and the cost and risk of cash on delivery (COD), which many shoppers in India still ask for and which brings more RTO with it. Plan how to reduce RTO before launch, not after.
• Shipping and returns. Courier rates, packaging, and a returns policy you write and honour yourself.
• Traffic. For a new storefront, the cost that decides whether the numbers work: paid search, paid social, content, and the slow work of building an email or WhatsApp list.
• Trust. A new site has no reviews and no reputation. Clear contact details, a plain returns policy and familiar payment options do part of the work; time does the rest.

What you buy with those costs is control: your price, your presentation, your customers’ contact details with their consent, and the freedom to sell to the same person again without paying a marketplace commission each time. Repeat purchase is where a storefront earns its keep.

Building one well is its own job; our page on D2C website development sets out what goes into a Shopify or WooCommerce build. Filling it with visitors is another, and that is the work of performance marketing.

How to compare the two per unit

Work out what reaches you per unit on each route, starting from the price the shopper pays and taking off everything the sale costs. The route with the larger figure is not always the one to start on, but you should know both.

1. Start from the selling price and take out the GST it includes.
2. On a marketplace, deduct commission, fixed or closing fees and shipping fees. On a storefront, deduct gateway and any platform transaction fees, and courier charges.
3. Deduct the expected cost of returns and RTO: shipping both ways, and goods that come back unsaleable.
4. Deduct the advertising cost of winning each order: sponsored listings on a marketplace, Google and Meta for a storefront.
5. Deduct the landed cost of the product, meaning its cost delivered to you, and its packaging.

What is left is your contribution per unit. TCS deducted from marketplace payouts is not a cost here, since it can be claimed against your GST, but it holds up cash until you claim it.

What each route asks of your team

Marketplaces ask for operational discipline; storefronts ask for marketing skill. The two overlap less than founders expect, and a team that is good at one is often stretched by the other.

On a marketplace

• A catalogue built to each marketplace’s format: titles, attributes, images, size charts and variations.
• Stock and prices kept in step across every marketplace you sell on.
• Orders processed within each marketplace’s handling time, every working day.
• Returns inspected, claims raised within the marketplace’s time limits, and settlements reconciled.
• Account health watched, and policy notices answered.
• Sponsored ads managed against margin, not only against sales.

On a storefront

• Campaigns, creative, budgets and testing on Google and Meta.
• Tracking you can trust: GA4, Meta Pixel and Conversions API, and consent.
• Merchandising: collections, product pages, offers and site speed.
• Customer service on email, phone and WhatsApp.
• Courier bookings, COD confirmation and RTO follow-up.
• Email and WhatsApp campaigns that bring buyers back.

Be honest about which list your team can run this quarter. On marketplaces, catalogue and listing content decides whether your product is found at all. On a storefront, conversion tracking decides whether you can tell which ads paid.

Where should first orders come from?

If shoppers already search for your product by name, start where they search: on a marketplace. If your product needs explaining before anyone wants it, start where you can explain it, which means advertising that sends people to your own storefront.

Signs that point to a marketplace first:

• The category is searched by name, and shoppers compare on price, ratings and delivery.
• You have stock, a competitive price, and margin left after fees and returns.
• Your advertising budget is modest, and you need proof of demand before spending more.
• Your team is stronger at operations than at marketing.

Signs that point to a storefront first:

• The product needs a story, a demonstration or a comparison to sell.
• Your margin can carry the cost of winning a customer, especially one who will buy again.
• You already have an audience: followers, a mailing list, or customers offline.
• Your category on marketplaces is crowded with sellers competing on price alone.

Neither list is a rule. A brand with a repeat-purchase product and a following can start on a storefront and add marketplaces later; a brand selling a searched-for staple may do well on marketplaces for a long time before a storefront pays.

For the first steps on either route, our guides cover how to sell on Amazon India and how to run Meta ads for D2C brands.

A marketplace rents you demand. A storefront asks you to build it.

When should you run both?

Once one route works reliably and your stock, prices and catalogue can stay consistent across two. Adding the second route earlier splits a small team’s attention when the first route needs it most.

• Stock. One inventory feeding several channels needs software that keeps counts in sync, or you will sell what you do not have.
• Price. Shoppers compare. Some marketplaces also watch for lower prices elsewhere and can reduce a listing’s visibility, so set your price structure across channels before launch.
• Range. Bundles, pack sizes or colours kept to the storefront mean the two routes are not a straight price comparison.
• Measurement. Ads that send shoppers to your site also send some to marketplaces. Agree in advance which numbers judge each route.

The routes also feed each other. Marketplace ratings and reviews give a new brand the credibility its storefront lacks; the storefront gives you customers you can reach again. Treat them as one business with two shop fronts, and plan the work as one.

Common mistakes on either route

The expensive mistakes are rarely about the choice of route. They come from starting before the arithmetic, the tracking or the team is ready.

• Pricing for a marketplace from the commission alone, then meeting returns and ad costs in the settlement.
• Opening a storefront and waiting for visitors who have no reason to come.
• Going live on several marketplaces at once with one person and one spreadsheet.
• Spending on ads before tracking is in place, then arguing over which numbers to believe.
• Running two routes at different prices and undercutting yourself.
• Handing over accounts without settling access, reporting and exit terms first.

How we help you choose

We are an operator, not an agency: we run our own brands on the same marketplaces and ad platforms we run for clients. We start where a seller would, with who searches for the product and what reaches you per unit on each route.

Then we recommend an order of work, and can take on either route or both: the marketplace accounts, the storefront build, or the advertising behind them. Our overview of ecommerce brand management shows how those pieces fit together.

The terms used here, from RTO to TCS, are defined in plain English in our ecommerce glossary.