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Question

An e-commerce revenue model where the seller controls pricing but doesn’t hold stock, instead having a third-party supplier ship directly to the customer, is called:

ADropshipping Model
BAffiliate Revenue Model
CTransaction Fee Revenue Model
DAgency Revenue Model
Correct Answer — A

Explanation

Dropshipping Model is the correct answer. In this model, the retailer does not maintain inventory. When a customer places an order, the seller purchases the product from a third-party supplier, who ships it directly to the customer. The retailer earns through the margin between wholesale and retail prices.

Affiliate Revenue Model is incorrect because the affiliate only promotes another company’s products and earns a commission on sales. It does not control pricing or handle fulfilment.

Transaction Fee Revenue Model is incorrect because the platform earns by charging a fee or commission for facilitating transactions between buyers and sellers.

Agency Revenue Model is incorrect because an agency earns by providing professional services such as marketing, web design or content creation, rather than selling physical products.

Therefore, the correct answer is Dropshipping Model.

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