Small businesses across India are discovering that selling online does not always require building an expensive website or relying entirely on one large e-commerce marketplace. The Open Network for Digital Commerce, commonly known as ONDC, is an initiative designed to make digital commerce more accessible by connecting buyers, sellers and service providers through an open network.

For a neighbourhood shop, home-based business, local food brand, handicraft seller or small manufacturer, this creates an opportunity to explore new digital sales channels. However, joining a network is not the same as automatically receiving orders. Businesses still need competitive products, accurate listings, reliable fulfilment, sensible pricing and good customer service.

This guide explains what ONDC is, how it works, what Indian small businesses should consider before joining, and how to build a practical selling strategy around it.

What Is ONDC?

ONDC stands for Open Network for Digital Commerce. It is an initiative supported by the Government of India to promote an open and interoperable digital commerce ecosystem.

Traditional online marketplaces generally operate through their own platforms, seller systems and buyer applications. ONDC follows a network-based approach in which participating buyer-side applications, seller-side applications and logistics or other service providers can connect through common network protocols.

In simple terms, ONDC aims to help businesses participate in digital commerce without making one marketplace the only possible route to customers. The actual customer experience, seller onboarding process, product categories, fees and services depend on the participating organisations involved.

Businesses can explore the official ONDC website to understand the network, its participating organisations and available resources.

Why ONDC Matters for Indian Small Businesses

India has a large base of small retailers, service providers, manufacturers, artisans and home-based entrepreneurs. Many of these businesses have products worth selling online but face practical challenges such as limited digital visibility, marketing costs, technology requirements and dependence on a small local customer base.

ONDC is relevant because it aims to make participation in digital commerce possible through a broader network of connected applications. Government information published in March 2026 reported that approximately 206,000 merchants had completed at least one transaction on the ONDC Network by the end of December 2025. The same update reported participation by service providers and MSMEs through related enablement initiatives. These figures indicate activity in the ecosystem, not a guarantee of sales for every new seller.

Potential benefits for an eligible business include:

  • Additional digital reach: The business may become discoverable through participating buyer applications.
  • More ways to sell: Sellers can explore network-enabled commerce alongside their existing shop, website or social channels.
  • Support through participating providers: Seller applications and network participants may assist with catalogue creation, order management and related processes.
  • Opportunities beyond a local market: Depending on product category, service availability, delivery coverage and customer demand, sellers may be able to serve customers outside their immediate neighbourhood.
  • Digital business experience: Managing listings, orders, inventory and customer feedback can help a business improve its wider online operations.

These are potential advantages rather than assured outcomes. Sellers should check the actual terms and capabilities of the provider they choose.

Which Businesses Can Explore ONDC?

The suitability of ONDC depends on the product or service, participating seller applications, operational readiness and the categories supported by the relevant network participants.

1. Local retail stores

Kirana stores, packaged-goods retailers, household-product sellers and other neighbourhood businesses can investigate whether a participating seller application supports their category and delivery area.

2. Food and grocery businesses

Eligible food businesses may explore digital ordering opportunities. They should pay particular attention to food safety, product freshness, packaging, delivery times and any applicable licences or registration requirements.

3. Handicrafts and regional products

Artisans, craft sellers and businesses producing regional goods may use digital channels to introduce their products to customers who would not normally visit their physical location. Product photographs, dimensions, materials, shipping protection and clear descriptions become especially important.

4. Small manufacturers and home-grown brands

Manufacturers and direct-to-consumer businesses can investigate whether relevant categories and participating providers support their products. They should calculate the cost of packaging, returns, logistics and customer support before accepting orders at scale.

5. Service providers

Some services are represented through the wider ONDC ecosystem, but availability varies. A service provider should confirm that its specific category, geography and operating model are supported before investing in onboarding.

How Does Selling Through ONDC Work?

ONDC is a network, not simply a single shopping app where every seller registers directly and immediately begins selling. Businesses typically work with a seller-side application or another participating organisation that facilitates their connection to the network.

  1. Choose a suitable seller-side provider. Compare providers that support your category, location and business requirements.
  2. Complete onboarding. Submit the business and compliance information requested by the provider.
  3. Create your catalogue. Add accurate product names, descriptions, prices, photographs, stock information and other required attributes.
  4. Configure fulfilment. Confirm delivery coverage, order processing, packaging requirements, cancellation rules and return handling.
  5. Check how orders and payments work. Understand order notifications, settlement timelines, applicable charges and the process for resolving disputes.
  6. Go live and monitor performance. Track orders, cancellations, customer feedback, stock accuracy and the profitability of completed sales.

The precise process can vary by seller-side application and category. Confirm current requirements directly with the provider and through official ONDC resources before submitting documents or paying onboarding charges.

Documents and Information to Prepare

There is no single universal document checklist that applies identically to every business and provider. However, preparing the following information can make the onboarding process easier:

  • Business or proprietor details and contact information.
  • PAN and other identity or business verification details requested by the provider.
  • Bank account details for eligible settlements.
  • GST registration details where applicable to the business and transaction.
  • Product or service catalogue with prices and descriptions.
  • Stock availability, operating hours and fulfilment details.
  • Relevant category-specific licences, registrations or approvals.
  • Business address, pickup details and serviceable locations.

For example, food businesses should verify the applicable Food Safety and Standards Authority of India (FSSAI) requirements. GST obligations depend on the nature of the business and applicable law, so sellers should not assume that every business has identical registration requirements. Consult the relevant authorities or a qualified professional when necessary.

How to Choose the Right ONDC Seller Application

The seller-side provider you choose can significantly influence your experience. Instead of selecting a provider based only on an advertisement or a promise of high sales, evaluate the practical services it offers.

What to compare Questions to ask
Category support Can the provider onboard my exact product or service category?
Coverage Which locations and delivery options are supported?
Pricing Are there onboarding, subscription, commission, order or other charges?
Settlement When are payments settled, and how are deductions explained?
Catalogue tools Can I update prices, stock, photographs and descriptions easily?
Order management How are orders, cancellations, refunds and returns handled?
Customer support How can I get help with failed orders, disputes or technical problems?
Reporting Can I view sales, deductions, cancellations and settlement records?

Check the provider's current terms in writing. Fees, features, eligibility and commercial arrangements may differ, and they can change over time.

How to Calculate Profit Before Selling Online

Online orders can increase revenue while still producing weak profits if sellers ignore delivery, packaging, discounts, returns and platform-related costs.

Consider a hypothetical product sold for ₹500. The example below illustrates how to calculate the contribution from one completed order. The figures are for explanation only, not actual ONDC fees or an industry benchmark.

Item Amount
Selling price₹500
Product cost₹280
Packaging₹20
Delivery cost borne by seller₹45
Applicable service or selling charges₹25
Other order-related costs₹10
Estimated contribution₹120

In this illustration, the seller has ₹120 left before fixed overheads, applicable taxes not already accounted for, and other business expenses. The final result depends on the seller's real cost structure and provider terms.

Before launching, calculate the minimum viable selling price and establish a process to compare completed orders with settlement statements. This complements a broader cash flow management strategy for small businesses.

How to Create Product Listings That Convert

Being present on a digital network is only the beginning. Customers need enough information to decide whether a product suits their needs.

Use clear product titles

Describe the product precisely. Include useful attributes such as size, material, quantity, flavour or model where relevant. Avoid vague titles and unsupported claims.

Upload accurate photographs

Use clear, well-lit photographs that represent the actual item. Show important details, packaging and scale where useful. Images should not mislead customers about colour, size, contents or quality.

Write practical descriptions

Explain what the product does, what is included, how it should be used and any important limitations. For food, cosmetics, electronics and other regulated categories, ensure required information and claims comply with applicable rules.

Keep stock and prices updated

Out-of-stock listings and incorrect prices create avoidable cancellations and customer frustration. Assign responsibility for updating inventory and checking orders every working day.

Set realistic delivery expectations

Confirm packing time, pickup availability and delivery coverage. Do not promise a delivery date that the business cannot reasonably meet.

How Small Businesses Can Get Their First Orders

New sellers should avoid assuming that onboarding alone will generate consistent demand. Use a structured approach to discover what customers actually want.

  • Start with a focused catalogue: List products that have reliable stock, clear demand and manageable fulfilment requirements.
  • Choose a practical service area: Begin where you can fulfil orders reliably, subject to the provider's available coverage.
  • Use existing customer relationships: Let customers know about your new online ordering option without making misleading claims about availability or delivery.
  • Improve weak listings: Review product photographs, titles, descriptions, pricing and stock information when a listing attracts little interest.
  • Encourage honest feedback: Use customer feedback to identify recurring issues. Never buy fake reviews or offer undisclosed incentives for positive ratings.
  • Measure the economics: Compare sales, returns, delivery expenses, deductions and contribution—not just the number of orders.

Businesses already using social channels can treat ONDC as one part of a wider digital strategy rather than abandoning their existing channels. For more ideas on finding customers online, read this guide to local SEO and customer discovery through Google Search and Maps.

Common Mistakes to Avoid

  • Expecting guaranteed sales: Network participation does not promise a particular number of orders.
  • Ignoring the full cost of an order: Calculate product cost, packaging, delivery, returns and all applicable charges.
  • Choosing a provider without comparison: Review support, terms, category coverage and settlement processes before committing.
  • Listing inaccurate stock: Regularly reconcile the online catalogue with actual inventory.
  • Neglecting customer complaints: Respond promptly and keep records of order-related issues.
  • Overexpanding too early: Test a manageable selection before investing heavily in stock, packaging or staff.
  • Sharing sensitive information carelessly: Use verified channels and protect business accounts, customer information and payment records.

Strong operating processes matter as much as online visibility. A small business can create a repeatable workflow using documented steps for accepting orders, packing products, handling cancellations and reconciling payments. See this guide to standard operating procedures for small businesses.

A Practical 30-Day ONDC Readiness Plan

Week 1: Assess the business

Identify the products or services suitable for online selling. Review demand, margins, inventory, packaging, delivery capacity and regulatory requirements. Decide what you can fulfil consistently.

Week 2: Compare providers

Explore official ONDC resources and relevant seller-side applications. Compare eligibility, charges, service coverage, settlement terms and customer support. Keep written records of important commercial terms.

Week 3: Prepare the catalogue

Photograph products, write accurate descriptions, confirm prices and stock, and prepare the required documents. Establish procedures for order processing, packaging and customer communication.

Week 4: Test and improve

If onboarding is complete and the relevant category is available, begin with a manageable catalogue. Review each order carefully, identify problems and calculate actual contribution after costs. Expand only when the process is reliable and commercially sensible.

This plan is a suggested preparation schedule, not a promise that provider onboarding or activation will be completed within 30 days.

Is ONDC Worth Exploring for Your Business?

ONDC may be worth exploring if your business has products or services that can be described accurately, fulfilled reliably and sold at a sustainable margin. It may be less suitable for a business that cannot maintain stock, handle orders promptly or absorb the costs of delivery and returns.

Evaluate it alongside other routes, including your physical shop, direct customer relationships, a business website and established online marketplaces. Compare the actual costs and results rather than assuming that one channel is automatically superior.

The most sustainable strategy is to treat digital commerce as an operating system for the business: maintain accurate product information, track money carefully, protect customer data, deliver consistently and learn from performance. ONDC can provide an additional route into the digital commerce ecosystem, but business fundamentals remain essential.

Frequently Asked Questions

1. What is ONDC in simple words?

ONDC is an open network initiative intended to connect buyers, sellers and service providers through interoperable digital commerce systems. It is not simply one shopping application.

2. Can small businesses in India sell through ONDC?

Eligible businesses may be able to participate through a seller-side application or participating organisation. Availability depends on the category, location, provider requirements and applicable regulations.

3. Is ONDC a seller app?

No. ONDC is the network infrastructure. Sellers generally connect through participating seller-side applications or organisations that support onboarding and related services.

4. Does ONDC guarantee orders?

No. Joining the network does not guarantee sales. Results depend on customer demand, product quality, pricing, discoverability, fulfilment and other factors.

5. What documents are required to join ONDC?

Requirements vary by provider and business category. Sellers may be asked for business details, identity and tax information, bank details, catalogue information and relevant licences or registrations.

6. Does a business need GST registration to sell through ONDC?

GST requirements depend on the business, the goods or services sold, the applicable law and the selling arrangement. Check the current requirements with the relevant authorities or a qualified tax professional rather than assuming the same rule applies to every seller.

7. Are there charges for selling through ONDC?

Costs depend on the participating providers and the commercial arrangement. Ask for a written breakdown of onboarding charges, subscriptions, commissions or service fees, logistics, returns and settlement deductions.

8. Can a local shop use ONDC alongside its existing business?

Potentially, yes, if its category and operating model are supported. The seller should maintain consistent inventory, accurate prices and reliable order fulfilment across all sales channels.

9. How can sellers improve their performance?

Use accurate listings and photographs, competitive but profitable pricing, reliable stock records, timely fulfilment and responsive customer support. Review order-level costs and feedback regularly.

10. Where can I find official ONDC information?

Visit the official ONDC website to learn about the network and explore available resources. Confirm provider eligibility, commercial terms and current onboarding instructions before proceeding.

Conclusion

ONDC represents one of India's approaches to widening participation in digital commerce. For small retailers, manufacturers, artisans and eligible service providers, it may offer another way to explore online demand without depending entirely on a single marketplace.

Success, however, comes from preparation. Choose a suitable provider, understand the charges, build accurate listings, meet applicable compliance requirements and measure the profit from completed orders. Start small, learn from real customer behaviour and expand only when your business can deliver a dependable experience.

Editorial note: ONDC participation, seller eligibility, provider services, fees and legal requirements can change. Verify current details through official sources and the relevant participating provider before making business decisions.