E-commerce Website vs Selling on Lazada or Shopee: Pros, Cons and Costs

⏱ 7 min read

Selling on Lazada or Shopee gets you in front of shoppers quickly with almost no setup cost, but you pay commissions and fees on every sale, compete on price with sellers one tap away, and the platform owns the customer relationship. Your own e-commerce website costs more to set up and needs marketing to bring traffic, but you keep more of each sale, control your brand and build a customer list you own. For most growing Philippine brands, the answer is both: marketplaces for discovery, your own site for repeat customers and better margins.

Here is a practical comparison to help you decide where to put your time and budget.

Side-by-side comparison

Understanding marketplace costs

Marketplace fees are not a single number. Depending on your category and the programmes you join, you may pay:

• A commission on each sale
• Transaction or payment handling fees
• Fees for joining free shipping or voucher programmes
• Advertising spend to appear higher in search results
• Campaign participation costs during big sale events

Fee structures change periodically, so check the current rates in each platform’s Seller Center and calculate your real margin per product after all fees and discounts. Many sellers are surprised by how thin the margin becomes once vouchers and ads are included.

Understanding your own website’s costs

• Build: a one-time cost for design, product setup, payment integration and shipping rules
• Running costs: domain renewal, hosting, possible plugin licences and maintenance
• Payment gateway fees: a percentage or fixed fee per transaction, varying by payment method
• Marketing: the biggest ongoing cost for most stores, whether in money (ads) or time (content, social media, SEO)

The economics favour your own site once you have repeat customers or a following. Every sale from someone who already knows your brand avoids a marketplace commission.

Tax and legal points that apply to both

Whichever channel you use, you are running a business and the usual registrations apply: DTI or SEC, mayor’s permit and BIR registration.

Two rules are worth knowing:

• Withholding tax on remittances (BIR Revenue Regulations No. 16-2023). E-marketplace operators and digital financial service providers withhold 1% on one-half of the gross remittances they pay to online sellers (effectively 0.5%). Sellers whose annual gross remittances do not exceed ₱500,000 can be exempted by submitting a sworn declaration. Talk to your accountant about how this applies to you.
• Internet Transactions Act of 2023 (RA 11967). This law covers business-to-business and business-to-consumer online transactions and created the DTI’s E-Commerce Bureau. It sets expectations for online merchants and e-marketplaces, including accurate product information and pricing and proper handling of consumer complaints.

This is general information, not tax or legal advice.

How to compare channels properly

Revenue alone is misleading. For each channel, work out your net profit per order:

• Start with the selling price the customer actually paid, after vouchers and discounts
• Subtract product cost and packaging
• Subtract platform commission and transaction or payment fees
• Subtract any shipping subsidy you cover
• Subtract the advertising cost per order (total ad spend divided by orders from that channel)

Do this for a typical month on each channel. Sellers often find that a smaller number of direct orders from repeat customers is more profitable than a larger volume of heavily discounted marketplace orders, or the opposite. The numbers, not assumptions, should guide where you invest.

When marketplaces make the most sense

• You are testing a new product and want to see if it sells before investing in a website.
• Your products are commodities that shoppers compare by price.
• You have no existing audience yet.
• You want integrated logistics without setting up courier accounts.

When your own website makes the most sense

• You have a brand people search for by name, or a following on Facebook, Instagram or TikTok.
• Your products are premium, custom or made to order and need space to explain.
• You sell to repeat customers (consumables, supplies, subscriptions) or businesses.
• You want to build an email or SMS list for promotions.
• Marketplace fees have made your margins uncomfortable.

The combined strategy many brands use

1. Use marketplaces for reach. Keep your bestsellers listed where shoppers already browse.
2. Use your website for your full range and your story. Show bundles, exclusive items, detailed guides and reviews.
3. Reward direct orders. Offer loyalty points, free gifts or exclusive products on your own site. Check each marketplace’s policies before inserting materials in parcels.
4. Keep pricing and stock consistent. Use inventory tools or integrations so you do not oversell across channels.
5. Measure channel profitability. Compare net profit per order, not just revenue, across each channel.

What a good Philippine e-commerce site needs

• Fast, mobile-first product pages that work on prepaid data
• GCash, Maya and card payments through a gateway, plus COD if it suits your products
• Clear shipping fees by location (Metro Manila, Luzon, Visayas, Mindanao) and delivery times
• Visible return and refund policy
• Order confirmation and status updates by email or SMS
• Easy reorder for returning customers
• A privacy notice and consent for marketing messages

For payment details, see our guide to accepting GCash and Maya payments, and for overall budgeting, how much a website costs in the Philippines.