UPSC Previous Year Question | Prelims GS | 2026

An e-commerce revenue model where the seller has control over pricing but doesn't keep products in stock and instead transfers customer orders and shipment details to a third-party supplier, who then ships the goods directly to the customer, is called:

  1. Dropshipping Model
  2. Affiliate Revenue Model
  3. Transaction Fee Revenue Model
  4. Agency Revenue Model

Answer

Correct Answer

Dropshipping Model

Explanation

In dropshipping, the seller markets and sells products without maintaining physical inventory. Once an order is received, the seller passes the order and shipping details to a third-party supplier, who fulfils and ships the product directly to the customer. The seller generally retains control over the retail price and earns a margin.

Topics: business models, digital economy, e-commerce, economy