ONDC explained for small sellers: what it is and how to prepare

ONDC, the Open Network for Digital Commerce, is an open network backed by the Government of India that lets a shopper using one app buy from a seller listed through a different app. Instead of every seller joining each big marketplace separately, sellers join the network once through a seller app, and their products can then be found by shoppers on any connected buyer app. For a small seller, it is one more way to be found, not a replacement for your own store or your regular customers.

This explainer covers how ONDC works, what joining involves, the questions to ask, and how to get ready. It is a neutral guide: ONDC's rules and participants change, so check the latest on ONDC's official website.

What is ONDC in simple words?

Think of UPI. Before UPI, you could only pay someone who used the same wallet as you. With UPI, any app can pay any bank account. ONDC applies a similar idea to shopping: any buyer app can, in principle, show products from any seller app on the network.

ONDC was set up as a not-for-profit company, with the initiative led by the Department for Promotion of Industry and Internal Trade (DPIIT). It does not run a shop itself. It sets the shared rules and technical standards that apps on the network follow.

Who are the players on the network?

As a seller, your relationship is with your seller app. It handles onboarding, your catalogue, order notifications, often delivery booking, and payment settlement to your bank.

How does an ONDC order work?

1. A shopper searches for, say, "cold-pressed groundnut oil" on a buyer app.
2. The network passes the search to seller apps, which return matching products from sellers who serve that location.
3. The shopper orders and pays on the buyer app.
4. Your seller app tells you about the order; you accept and pack it.
5. A logistics partner picks it up and delivers, with tracking passed back to the shopper.
6. Money is settled to you through the network's process, after any fees and commissions.

How do you register as a seller on ONDC?

You do not register with ONDC directly. You choose a seller app that is a network participant and sign up with them. The ONDC website lists participants. Before choosing, ask each seller app:

• What commission or fees do you charge, and what does the buyer app take?
• Which categories do you support (grocery, food, fashion, home, electronics)?
• Do you arrange delivery, or must I deliver myself? What do delivery charges look like?
• How and when is money settled to my bank?
• How are cancellations, returns and disputes handled?
• Can I upload my catalogue in bulk from a spreadsheet?
• Which documents do you need?

Seller apps typically ask for documents such as PAN, GSTIN, bank account details, and category licences like FSSAI for food. Requirements differ between seller apps and categories, and change over time, so ask yours.

How should you prepare your business for ONDC?

The work that makes you ready for ONDC also makes your own store and any marketplace listing better.

1. A clean catalogue

• Clear product names that say what the product is: "Cold-pressed groundnut oil, 1 litre, glass bottle".
• Good photos on a plain background. See our guide to product photos with a phone.
• Accurate weight, size, pack quantity and, for food, ingredients and shelf life.
• HSN codes and GST rates for each product. Our HSN codes guide explains how to find them.
• A spreadsheet version of your catalogue, so you can upload it to a seller app quickly.

2. Prices that work after fees

Work out what you keep after the seller app's and buyer app's fees, payment costs, delivery and packaging. Our post on transaction fees and commission shows how to compare them. Some sellers keep ONDC prices the same as their own store for simplicity; others adjust to cover fees. Either way, know your margin.

3. Delivery area and timings

ONDC is often used for local and hyperlocal orders. Decide the area you can serve, how quickly, and at what hours. If you sell groceries, food or flowers, a tight radius delivered well beats a wide one delivered late.

4. Stock you can trust

If you sell the same stock in your shop, on your website and on ONDC, an item can sell twice. Update stock daily at minimum, and hold back a buffer on fast-moving items.

5. Returns and cancellations

Write down your rules, especially for perishable goods. Our guide to writing a returns policy helps.

What do sellers commonly get wrong when they join a new channel?

• Uploading a messy catalogue. Vague names and missing weights mean your products do not show up for the searches that matter.
• Underestimating fees. A commission plus delivery plus payment cost can turn a profitable product into a loss-maker. Check every line before you go live.
• Slow order acceptance. Networks and apps generally expect quick responses. If you cannot check orders often, limit your hours.
• Forgetting cancellations. Every cancellation you cause disappoints a customer you have never met, who may judge your brand on it.

Is ONDC right for your business?

It can make sense if you sell everyday goods many people search for (groceries, packaged food, household items, local restaurant meals), you can pack and dispatch quickly, and you want another channel without building audiences on each big marketplace. It may matter less if you sell highly personal, made-to-order or premium goods where customers come for your brand and your own store experience.

Most sellers will find ONDC works best as an extra channel. Your own website remains the place where you set the price, own the customer relationship, and build repeat business without commission. Our comparison of marketplaces and your own store explains why.

Does UpMinutes connect to ONDC?

No. UpMinutes does not currently connect to ONDC. If you want to sell on ONDC, you would join through a seller app that is an ONDC network participant, and keep your UpMinutes store as your own website. The catalogue work above helps with both.

Checklist: getting ONDC-ready

• PAN, GSTIN, bank details and category licences ready.
• Catalogue in a spreadsheet with names, photos, prices, weights and HSN codes.
• Margins checked after all fees.
• Delivery area, hours and dispatch times decided.
• A simple daily stock routine.
• Returns and cancellation rules written.
• Two or three seller apps compared on fees, categories and settlement.

For more on how buying habits are changing, see our post on quick commerce and small shops.

Filed under Trends & AI. More guides on the UpMinutes blog.