1 Why the model matters
India’s online retail will top ₹9 lakh crore ($110 bn) by FY 2025-26, but GST rules, FDI caps and marketplace fees differ wildly by business model. Choosing the right structure early can save 10-15 % in compliance costs and shave weeks off launch time.
2 Five core e-commerce models in 2025
Model | Key trait | FDI status (2025) | Ideal for | Beacon Filing note |
Marketplace (3P) | Platform lists 3rd‑party sellers; takes commission | 100 % FDI automatic (B2B) — B2C via inventory ban | D2C brands testing product–market fit | We register you on Amazon/Flipkart & map GSTINs |
Inventory‑led (1P) | Platform owns stock, sells to end‑user directly | No FDI for B2C multi‑brand; 100 % FDI for single‑brand | Private‑label players controlling CX end‑to‑end | Beacon Filing structures single‑brand entity to clear DPIIT norms |
Dropshipping | Seller markets, supplier ships; zero warehousing | Allowed; treat overseas supplier as OIDAR if digital goods | Boot‑strapped founders wanting low capex | We draft supplier contracts & handle FEMA outward remittance |
Subscription/Box | Recurring curated kits; predictable revenue | Same as inventory model driving the box | Beauty, gourmet food, pet‑care startups | Tax team sets GST cycle for advance receipts |
Social Commerce | Sales via WhatsApp/Instagram; micro‑influencer resale | FDI capped at 100 % in B2B; resale to consumers allowed | Tier‑2 resellers, creator‑led brands | We obtain TCS (1 %) exemption where turnover < ₹ 10 cr |
3 Compliance cheat-sheet (2025 edition)
Requirement | Marketplace seller | Own-site inventory player | Dropshipper |
GST registration (threshold) | Mandatory from ₹1 sales (Sec 24 (ix)) | ₹40 lakh (goods) / ₹20 lakh (services) | ₹40 lakh / ₹20 lakh, but OIDAR if digital |
TCS 1 % under Sec 52 | Marketplace collects & remits | Not applicable | Not applicable |
FDI reporting to RBI | Only if foreign capital in marketplace entity | Single‑brand: Form SMO within 30 days | Payee bank files OPI, we reconcile |
Consumer‑protection e‑commerce rules (2020) | Listing details, seller KYC, grievance officer | Return/refund policy + seller disclosure | Supplier T&C must match India return rules |
Data‑privacy (DPDP Act) | Marketplace = Significant Data Fiduciary (likely) | Medium; DPF if > 5 m users | Low; maintain consent trail for cross‑border sharing |
4 Cost levers & profit math
Marketplace fees run 8-22 % + ₹15-80 fulfilment; great for reach, painful on margins.
Inventory-led margins higher (25-45 %) but demand working capital and 18 % GST on stock transfer.
Dropshipping is cash-light but faces 5-10 day delivery and customs delays.
Beacon Filing’s pricing modeler plugs fee schedules and GST credits into one dashboard so founders see exact post-tax margins before launch.
5 FDI & FEMA traps to avoid
Inventory control in a marketplace entity with foreign shareholding — flagged as Press-Note 2 violation.
Cash-back funded by brand could be seen as discounting beyond 25 %, breaching marketplace norms.
Payment gateway settlement abroad without Form 15-CA/CB — attracts 5 % equalisation levy.
We run quarterly FEMA & DPIIT audits, closing gaps before RBI knocks.
6 Decision tree (20-sec quiz)
• < ₹5 lakh seed & no warehouse? → Dropship or social commerce.
• Premium brand, willing to stock? → Inventory-led or subscription box.
• Unsure of demand curves? → Start on a marketplace, graduate later.
Beacon Filing offers an Entity-Flip Kit that migrates you from marketplace seller code to full inventory company in under 45 days.
7 Beacon Filing’s e-commerce launch stack
GST + TCS registration in 29 states with one Power of Attorney.
Marketplace onboarding (Amazon, Flipkart, Meesho) : brand registry, FSSAI licence where needed.
FEMA safe-harbour pricing for cross-border dropship contracts.
Monthly compliance dashboard: GSTR-1/3B, marketplace TCS reconciliations, DPIIT filings.
Ready to open carts?
Book a strategy call and let Beacon Filing turn SKU spreadsheets into a fully-compliant e-commerce business.
Disclaimer (23 July 2025): Regulations evolve. This guide is for general information only—always seek personalised professional advice before acting.
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