Meena runs a small home bakery in Indore, selling dry cakes, cookies, and festive hampers through a mix of WhatsApp orders and a Swiggy listing that eats nearly a fifth of every order in commission. A regular customer recently asked if she was on ONDC, and Meena had no clear answer beyond having heard the name on the news. That confusion is common right now, because ONDC gets talked about constantly but rarely explained in terms that matter to someone actually running a shop.
ONDC stands for Open Network for Digital Commerce. It is a government backed initiative, built under the Department for Promotion of Industry and Internal Trade, designed to do for online shopping what UPI did for payments. Instead of a handful of large apps controlling who gets seen and what they charge for it, ONDC lays down a shared set of rules so that any buyer app and any seller app can talk to each other. In practice, a customer browsing a buyer app like Paytm or a regional shopping app can discover and order from a seller whose shop sits on a completely different app, the same way a PhonePe user can pay a Google Pay user without either of them thinking about which bank sits behind the transaction.
What ONDC changes for a small seller
The headline pitch is lower cost and wider reach. Large marketplaces typically charge sellers a meaningful cut per order once you include commission, logistics fees, and advertising to stay visible against competitors. ONDC's network model has consistently been positioned around far lower commission structures, since the network itself does not operate as a single app taking a cut, it just connects buyer and seller apps that charge their own smaller fees. Multiple seller onboarding platforms built on ONDC report commissions in the low single digits rather than the fifteen to twenty five percent range common on closed marketplaces.
The reach argument is similarly structural. List your shop once on an ONDC enabled seller app and your products can, in theory, surface across every connected buyer app rather than only the one you signed up with. For a business like Meena's bakery, that means a listing created through one ONDC seller platform could show up to a shopper browsing an entirely different shopping app in a different city, without a separate signup or separate catalogue to maintain.
There is also a formalisation angle worth knowing if you are still deciding on your business structure. ONDC onboarding generally expects GST registration and a working bank account, which lines up with the broader push covered in our piece on Udyam MSME registration. If you have been putting off registering formally, platforms like ONDC are one more reason the paperwork is worth doing sooner rather than later.
What ONDC does not do
This is the part that gets skipped in most explainers, and it matters more than the upside. ONDC is a network, not a storefront. It does not give you a shop window, a brand page, or a place to tell your story. It routes an order from a buyer app to whichever seller app you used to list your catalogue. Your actual presence still lives inside that seller app's interface, which you do not control and which looks more or less identical to every other seller on the same app.
That is a meaningful difference from having your own website. A buyer app shows your Rs 450 box of cookies next to five competing listings sorted by price, delivery time, or whatever ranking signal that particular app favours that week. There is no version of that experience where your bakery's twelve years of word of mouth reputation, your Instagram following, or your festive hamper photography gets to matter. We covered a similar tradeoff in Instagram Shop vs Own Website: a marketplace listing can bring orders, but it rents you a shelf inside someone else's store rather than giving you a storefront of your own.
Pricing transparency is another open question. Because ONDC is designed to let buyer apps compare sellers on the same network, the easiest way to win a comparison is often to cut price, which is a race to the bottom for a small seller who cannot absorb margin the way a larger operation can. A website lets you set your own price, bundle your own offers, and never be placed in a side by side comparison grid with a competitor three streets away.
The practical way to think about it
ONDC is worth exploring as an additional discovery channel, not a replacement for your own digital presence. Think of it the way you would think about a listing in a local directory or a stall at a popular market: useful for bringing in new customers who would not have found you otherwise, but not somewhere you want to be entirely dependent on for your livelihood, since you do not control the rules, the fees, or the ranking algorithm.
The businesses getting the most out of ONDC right now tend to be the ones that already have their own website or Google Business Profile as the anchor, and treat marketplaces including ONDC as additional doors into the same shop. When a customer finds you through an ONDC enabled app and likes what they bought, the next step is getting them to your own site or WhatsApp for repeat orders, where you keep the full margin and the full relationship. Our guide on building a strong online presence walks through how a website, Google listing, and social presence work together rather than competing with each other.
For payments, ONDC transactions typically settle through UPI rails on the backend regardless of which buyer or seller app is used, so the mechanics will feel familiar if you already accept UPI payments on your own website. The billing side does not change either: every ONDC order is still a GST sale that needs a proper invoice, which a tool like our GST invoice generator can handle in the same way you would for any other channel.
Getting started without overcommitting
If you want to try ONDC, the lowest friction path is signing up through one of the established ONDC seller apps rather than attempting direct network integration, which is built for larger platforms and developers rather than individual shop owners. Most onboarding flows ask for your GSTIN, bank details, and a product catalogue, similar to setting up on any marketplace. Treat the first month as a test: track how many orders actually arrive through that channel against the commission and effort it costs you, the same way you would evaluate any new sales channel before committing real inventory and time to it.
What should not depend on how that test goes is your own website. Marketplaces change their fee structures, their ranking rules, and sometimes their entire business model with little warning, and sellers who built their whole presence around one platform have been caught out before. A website you own, with your own domain, your own catalogue, and your own customer list, is the one channel nobody else gets to change the rules on. If your first step toward getting your business online has not happened yet, reaching your first ten customers usually starts there, with ONDC and other marketplaces as extra channels layered on top rather than the foundation underneath.