The Commission Trap: How High Marketplace Fees Can Impact Your Profit

By the founder

Selling online has created enormous opportunities for Indian businesses.

A small retailer can now reach customers beyond their neighbourhood. A manufacturer can sell directly to consumers. A new entrepreneur can launch a business without opening stores across multiple cities.

Marketplaces have played a major role in making this possible.

But there is an important question every seller should ask:

When you make a ₹1,000 sale, how much of that money do you actually keep?

The answer is often more complicated than it appears.

A Sale Is Not the Same as a Profit

When sellers look at their business dashboard, the first number they usually notice is sales.

₹10,000.

₹1 lakh.

₹10 lakh.

But revenue alone doesn't define the health of a business.

Every sale can involve multiple costs, depending on the platform, product category, fulfilment method, advertising strategy, returns, payment processing, and other operational factors.

These may include:

• Marketplace commissions

• Platform or service fees

• Payment processing charges

• Advertising and promotion costs

• Shipping and fulfilment costs

• Packaging costs

• Return-related costs

• Taxes and other operational expenses

The exact cost structure varies significantly by platform and category.

But the principle remains the same:

The money collected from a customer is not the same as the money earned by the seller.

Understanding the Commission Effect

Imagine a seller lists a product for ₹1,000.

If the business pays a percentage-based commission, that fee directly affects the amount retained from the sale.

For example, a 20% commission would mean ₹200 goes toward the platform commission before considering other applicable costs.

Add payment processing, shipping, promotions, returns, packaging, and product costs, and the seller's actual margin can become significantly smaller.

This is why sellers cannot build sustainable businesses by focusing only on revenue.

They need to understand their unit economics.

Every percentage matters.

Especially for businesses operating on already thin margins.

The Real Challenge: Growing Without Losing Control

Commission-based marketplaces aren't inherently bad.

They provide sellers with access to technology, infrastructure, and potentially large customer audiences.

For many businesses, they are an excellent way to get started.

But dependence on a single sales channel can create challenges.

As a seller grows, questions become more important:

What happens if my costs increase?

What happens if I need to spend more on advertising?

How do I build repeat customers?

How do I strengthen my own brand?

How much control do I have over my business economics?

These questions are increasingly shaping how businesses think about ecommerce.

The Case for Direct Selling

This is where owning a direct sales channel becomes important.

When a seller has their own digital storefront, they have more flexibility over how they run their business.

They can build their brand.

They can communicate directly with customers.

They can create their own marketing strategies.

And importantly, they can avoid marketplace commission on direct sales where the platform does not charge a commission.

That doesn't mean selling becomes free.

Every business still has costs.

Payment gateways, shipping, marketing, packaging, operations, taxes, and customer service can all remain part of the equation.

But removing a percentage-based marketplace commission can improve the economics of a direct sale.

Why We Built Sellio

At Sellio, we believe sellers should have more options.

Our goal is not to tell businesses to abandon established marketplaces.

Marketplaces can help sellers reach new customers and generate discovery.

But we believe sellers should also have the ability to build a sales channel of their own.

Sellio enables businesses to create their digital storefront and sell directly without platform commission on their sales.

This gives sellers the opportunity to retain more value from each direct transaction and invest that value back into their businesses.

That investment could go towards:

• Better products

• Customer acquisition

• Improved packaging

• Faster delivery

• Brand building

• Hiring

• Expansion

The seller decides.

The Smarter Approach: Use Multiple Channels

The future of ecommerce is unlikely to be about choosing one platform.

A strong business can use multiple channels.

For example:

Marketplaces for discovery.

Social media for engagement.

Offline stores for local trust.

Your own digital storefront for direct relationships and greater control.

This creates a healthier business model than relying completely on a single channel.

Sell More Is Not Enough

For years, ecommerce has focused heavily on growth.

More traffic.

More orders.

More customers.

More revenue.

But sustainable businesses need to ask another question:

How much value are we actually keeping from that growth?

A business generating ₹1 crore in sales with weak margins may be less sustainable than a smaller business with healthy unit economics and strong customer relationships.

That is why profit, control, and customer ownership matter.

The Sellio Philosophy

Our philosophy is simple.

Get discovered where customers are.

But also build something of your own.

Sellio is designed to give sellers a direct digital sales channel where they can build their brand, manage their business, and grow with greater control over their economics.

Because the goal of ecommerce should not simply be to help businesses generate more sales.

It should help them build sustainable businesses.

Final Thoughts

There is no single perfect channel for every seller.

Marketplaces provide reach.

Offline stores provide trust.

Social media creates engagement.

And a direct digital storefront provides independence and control.

The smartest strategy may not be to leave one platform for another.

It may be to build a business that can grow across multiple channels.

At Sellio, that's what we're working toward.

Helping sellers create their own digital presence, strengthen their brand, and retain more value from direct sales.

Because in the end, the most important number isn't always how much you sell.

It's how much of what you build, you get to keep.

Sell more. Keep more. Build your own business.