Should you sell on Amazon or build your own online store? It’s the biggest question every small business owner asks when they want to start selling online.
Most business owners don’t know which option actually makes more money in the long run. With online shopping growing by 25% every year in India, choosing the right platform can make or break your business success.
Here’s what you’ll learn in this guide: a clear comparison of profits from both options, real costs involved, and which choice gives you better returns on your investment over time.
At Omm Digital Solution, we help businesses succeed on websites AND marketplaces – so we know both sides of the story. We’ve seen businesses thrive in both scenarios, and we’ll share exactly what works and what doesn’t.
What Are Your Two Options?
Your Own Ecommerce Website
Think of popular online stores like Nykaa or Boat’s website. These are ecommerce websites where businesses control everything – colors, design, customer experience, and pricing.
You get complete freedom to showcase your brand exactly how you want. Popular ecommerce platforms include Shopify, WooCommerce, and custom-built solutions. The website is yours, and you make all the decisions.
Examples of successful Indian online stores include Chumbak, The Souled Store, and Mamaearth – all started with their own websites before expanding elsewhere.
Selling on Marketplaces
Amazon Marketplace, Flipkart, Meesho, and eBay are where millions of Indian shoppers go every day. These online selling platforms already have the traffic – you just need to list your products.
You follow their rules and design templates, but you get instant access to their massive customer base. Think of it like renting a shop in a busy mall versus building your own standalone store.
Marketplace listing is often faster to start because the platform handles payments, some marketing, and customer trust is already built in.
How We’ll Compare Profits
We’ll look at four key areas to determine ROI comparison:
- Startup costs – What you pay to get started
- Monthly expenses – Your ongoing costs every month
- Money you make – Revenue potential and conversion rates
- Long-term profits – Returns over 6 months to 3 years
This e-commerce strategy comparison will help you make the right choice for your small business’s e-commerce goals.
The Real Cost Breakdown
Let’s break down the actual costs in Indian Rupees so you can see exactly what you’ll spend.
Building Your Own Website Costs
Getting Started:
- Website hosting: ₹8,000-₹40,000 per year
- E-commerce platform fees: ₹2,500-₹25,000 monthly (Shopify, WooCommerce)
- Website design: ₹1,50,000-₹12,00,000 (depending on complexity)
- Apps and tools: ₹8,000-₹40,000 monthly
Every Month:
- Digital marketing: ₹40,000-₹4,00,000 monthly
- SEO services: ₹40,000-₹1,60,000 monthly
- Website maintenance: ₹15,000-₹65,000 monthly
- Payment gateway fees: 2% plus ₹3 per transaction
Total First Year Cost: ₹6,00,000 – ₹25,00,000
Marketplace Selling Costs
Getting Started:
- Amazon seller account: ₹500 monthly professional plan
- Flipkart seller account: Free to start
- Product photography: ₹40,000-₹1,60,000
- Starting inventory: Varies by product
Every Month:
- Marketplace fees: 8-18% of every sale
- Advertising costs: 10-30% of sales revenue
- Fulfillment fees: ₹25-₹150 per item
- Storage fees: ₹45-₹200 per cubic foot monthly
Total First Year Cost: ₹1,00,000 – ₹3,00,000 (excluding inventory)
Real Example: ₹40,00,000 Annual Revenue Business
Website Option:
- First year investment: ₹8,00,000
- Monthly operational cost: ₹1,50,000
- Net profit margin: 35-45%
Marketplace Option:
- First year investment: ₹2,00,000
- Monthly fees: 15-20% of revenue
- Net profit margin: 25-35%
The marketplace listing costs are lower upfront, but the ecommerce website costs give you higher long-term profits per sale.
How Many People Actually Buy?
Understanding conversion rates is crucial for calculating your actual online store profitability.
Why Marketplaces Convert Better Initially
Amazon Marketplace and Flipkart have built-in trust. Customers already feel safe buying from these platforms.
High traffic means more people see your products. Amazon India gets over 350 million visitors monthly, while Flipkart sees around 280 million.
Marketplace conversion rates in India:
- Amazon: 8-12%
- Flipkart: 6-10%
- Meesho: 4-8%
This means if 100 people see your product on Amazon, 8-12 actually buy it.
Website Conversion Challenges and Opportunities
Industry average for Indian ecommerce websites: Only 1.5-2.5% of visitors buy anything.
You must build trust from scratch. Customers need to feel confident about:
- Your brand credibility
- Payment security
- Return policies
- Product quality
But here’s the opportunity: You can optimise everything for better results. With proper SEO services and user experience improvements, some websites achieve 5-8% conversion rates.
Higher quality visitors come to your website because they specifically searched for your brand or products.
Traffic Quality Matters for Long-term Success
Marketplace browsers are often just comparing prices and may never remember your brand.
Website visitors are more likely to become repeat customers because they made an effort to find you.
Customer loyalty develops faster on your own platform because you control the entire experience.
Email marketing from your website can generate 20-30% of your revenue through repeat sales.
How Much Money Can You Make?
Revenue potential varies significantly between the two approaches.
Marketplace Money-Making Reality
Good Things:
- Instant access to millions of Indian shoppers
- Faster sales from day one – some sellers make first sale within 24 hours
- Festival traffic automatically increases during Diwali, Holi, etc.
- Cross-selling opportunities through platform recommendations
Bad Things:
- Price competition is intense – customers can compare with one click
- Limited upselling options – hard to increase order value
- Platform dependency – they can change rules anytime
- You share profits – 15-20% goes to the platform
Real Numbers: A ₹10,000 sale on Amazon might give you ₹7,500-8,000 after all fees.
Website Revenue Opportunities
Good Things:
- Keep 90-95% of profits (only payment gateway fees)
- Unlimited pricing strategies – no one can force price cuts
- Upselling freedom – suggest related products, bundles, warranties
- Email marketing can add 25% extra revenue
- Subscription options for repeat products
Bad Things:
- Slower growth initially – might take 3-6 months for steady sales
- Higher customer acquisition costs – ₹200-800 per customer
- More work is needed for festival traffic and promotions
Real Numbers: A ₹10,000 sale on your website gives you ₹9,500-9,700 after payment fees.
3-Year Revenue Projections
Marketplace Approach:
- Year 1: ₹15-25 lakhs revenue
- Year 2: ₹30-45 lakhs revenue
- Year 3: ₹40-60 lakhs revenue (growth slows due to competition)
Website Approach:
- Year 1: ₹8-15 lakhs revenue
- Year 2: ₹25-40 lakhs revenue
- Year 3: ₹50-80 lakhs revenue (compound growth effect)
Multiple revenue streams become possible with websites – affiliate marketing, digital products, courses, and partnerships.
Long-Term Profit Analysis
Here’s where the real difference shows up in your bank account.
3-Year ROI Reality Check
Marketplace Scenario:
- Quick initial returns – profit from months 2-3
- Revenue plateaus after 18-24 months
- Break-even point: 6-8 months
- Total 3-year profit: ₹25-35 lakhs
Website Scenario:
- Slow start – real profit from months 8-12
- Revenue accelerates after year 1
- Break-even point: 12-18 months
- Total 3-year profit: ₹40-60 lakhs
The e-commerce ROI from websites becomes significantly higher after the second year.
Building Real Business Value
Website ownership creates a business asset you can sell later. Marketplace rental builds nothing you own.
Brand building happens naturally with your own platform. Customers remember your website name, not that they bought from you on Amazon.
Customer data ownership is invaluable. You know who bought what, when, and can market to them directly. Marketplaces keep this data to themselves.
Selling your business later: A website-based business can sell for 3- 5x annual profit. Marketplace-only businesses rarely sell for more than 1- 2x annual profit.
Risk Factors to Consider
Platform rule changes can devastate marketplace sellers overnight. Amazon has suspended thousands of Indian sellers for policy violations.
Competition is increasing constantly in marketplaces. New sellers join every day, making it harder to stand out.
Economic downturns affect marketplace sales more because customers become more price-sensitive.
Growth limits exist on marketplaces – you can only optimise so much within their constraints.
Which Industries Work Best Where?
Your product type significantly impacts which platform gives better small business ecommerce results.
Best Products for Marketplaces
Electronics and gadgets – People compare specs and prices, perfect for marketplace browsing.
Home and kitchen products – High search volume on Amazon and Flipkart.
Books, stationery, and media – Customers know exactly what they want.
Fashion accessories and jewellery – Visual browsing works well on these platforms.
Better Products for Websites
Professional services – Consulting, courses, and expertise-based offerings.
Luxury and premium products – High-end items need brand storytelling.
Subscription businesses – Monthly boxes, software, or recurring services.
B2B solutions – Complex products needing detailed explanations.
Custom or personalised products – Items requiring customer input or customisation.
Omm Digital’s Real Client Success Stories
We helped a Mumbai-based jewellery brand start on Flipkart and generate ₹8 lakhs in the first 6 months. Later, we built their website, which now does ₹15 lakhs monthly.
A Bangalore tech accessories company used our marketplace listing services to reach ₹25 lakhs annual revenue on Amazon, then expanded to their own website for B2B sales.
Our custom website development helped a Delhi fashion brand reduce its customer acquisition cost from ₹400 to ₹150 per customer within 8 months.
Why Not Do Both? The Smart Multi-Channel Approach
Many successful businesses don’t choose one or the other – they do both strategically.
Multi-Channel Benefits
Risk spread across platforms means if one channel has issues, others keep revenue flowing.
More revenue sources can increase total sales by 40-60% compared to a single-platform approach.
More customer touchpoints mean people discover you in different ways and at different times.
Market testing becomes easier – try new products on marketplaces first, then add successful ones to your website.
The Real Challenges
Inventory management gets complex when selling across multiple platforms. You need systems to track stock everywhere.
Brand consistency across platforms requires constant attention. Your messaging should feel the same everywhere.
Time and resource demands increase significantly. You’re essentially running multiple businesses.
Price coordination becomes tricky – marketplace customers might see different prices than website customers.
When to Go Multi-Channel
Business readiness signs include:
- Consistent monthly revenue of ₹5+ lakhs
- Dedicated team member for online operations
- Stable supply chain and inventory management
- Clear understanding of your best-selling products
Resource requirements include:
- ₹2-3 lakhs monthly marketing budget
- Full-time person managing online channels
- Inventory management software
- Customer service team
Growth goals alignment means you want to:
- Dominate your product category
- Build a recognisable brand
- Create multiple revenue streams
- Eventually, sell your business
How to Choose What’s Right for Your Business
Use this simple framework to make the right decision for your situation.
Business Stage Assessment
Just Starting (0-6 months old):
- Limited budget: Choose marketplace listing
- Want to test product demand fast: Marketplace
- Have a unique/premium product: Consider the website first
- Service-based business: Website only
Growing Business (6 months – 2 years):
- Consistent sales on marketplaces: Add website
- Strong brand recognition: Website focus
- Price-sensitive products: Marketplace focus
- Want customer data: Website immediately
Established Business (2+ years):
- High revenue: Multi-channel approach
- Strong profit margins: Website priority
- Scaling challenges: Professional consultation needed
Money and Time Reality Check
Limited Budget (Under ₹2 lakhs): Start with marketplace listing – lower risk, faster returns.
Medium Budget (₹2-8 lakhs): Consider a basic website with marketplace presence.
Higher Budget (₹8+ lakhs): Professional website development with strategic marketplace presence.
Time Availability:
- Less than 10 hours/week: Marketplace only
- 10-25 hours/week: Website with some marketplace
- 25+ hours/week or dedicated team: Multi-channel approach
Warning Signs for Each Option
Don’t choose marketplaces if:
- Your products need a detailed explanation
- You’re selling services or consultations
- Brand building is your priority
- You want to collect customer emails
- Your profit margins are already thin
Don’t start with websites if:
- You have zero online marketing experience
- Your budget is under ₹2 lakhs total
- You need sales within 30 days
- You’re testing a new product idea
- You don’t have time for SEO and content marketing
How Omm Digital Solution Helps You Succeed
Our Consultation Process: We analyse your products, budget, timeline, and goals to recommend the best approach. This isn’t about selling you the most expensive option – it’s about what actually works for your situation.
Marketplace Listing Services:
- Amazon seller account setup and optimisation
- Flipkart store creation and management
- Product listing optimisation with keywords
- Inventory management and pricing strategies
- Advertising campaign management
- Review and rating improvement
Website Development Options:
- Custom e-commerce website design
- Mobile-responsive and fast-loading sites
- Payment gateway integration
- SEO-optimised product pages
- Email marketing setup
- Analytics and tracking implementation
Success Tracking Methods:
- Monthly ROI reports showing exact profits
- Conversion rate optimisation recommendations
- Traffic and sales analysis
- Competitor monitoring and insights
- Growth strategy adjustments based on data
Your Next Steps to Better ROI
Now you understand both options – here’s how to move forward smartly.
Key Points to Remember
ROI timing is different for each approach:
- Marketplaces give faster initial returns but lower long-term profits
- Websites take longer to pay off, but create lasting business value
Risk vs reward balance:
- Marketplaces are lower risk, moderate reward
- Websites are higher risk initially, with much higher reward long-term
Industry factors matter more than you think:
- Some products naturally perform better on specific platforms
- Your target customers’ shopping behaviour determines platform choice
What to Do Right Now
Self-Assessment Questions:
- How much money can you invest in the first year?
- How much time can you dedicate weekly to online sales?
- Do you need sales within 30 days, or can you wait 6-12 months?
- Is building a brand important for your long-term goals?
- Are your profit margins above 40%?
Budget Planning Steps:
- Calculate your total available investment
- Factor in 6 months of operational costs
- Keep a 20% buffer for unexpected expenses
- Decide if you need hired help or can manage yourself
Professional Help Value: Getting expert guidance saves you months of trial and error. The cost of professional setup and strategy is usually recovered within 3-6 months through better performance.
Get Started with Omm Digital Solution Today
Free ROI Consultation: Book a 30-minute call where we’ll analyse your specific situation and give you a customised recommendation. No sales pressure – just honest advice about what will work best for your business.
ROI Calculator Download: Get our Excel-based calculator that shows you projected profits for both approaches based on your actual numbers. Input your costs and see real projections.
Ready to Start? Whether you choose marketplace listing, website development, or a multi-channel approach, we’re here to help you succeed.
Contact Omm Digital Solution:
- Phone: 8276832626
- Email: info@ommdigitalsolution.com
- Website: www.ommdigitalsolution.com
- Office: 3/3, Swami Vivekananda Rd, Dum Dum, Kolkata-74
Remember, the best choice is the one that fits your current situation and long-term goals. Both e-commerce websites and marketplace listings can be profitable – the key is choosing the right one for YOU and executing it properly.
Start with our free consultation, and let’s build your online store profitability together.
