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:
Answer & explanation
Answer: (a) Dropshipping Model
The seller in the stem holds no stock. It takes the customer's order, passes the order and shipping details to a third-party supplier, and that supplier ships to the customer, while the seller still fixes the price. This arrangement is called dropshipping.
- ✓ (a) The Asian Development Bank describes a drop shipping relationship as one in which a third party ships to consumers. The stem's clues (no stock, orders passed to a supplier, direct shipment, seller-controlled price) all point here.
- ✗ (b) An affiliate is a person who markets products in exchange for a percentage of the profits. That is a commission for promotion; the stem instead describes order handling and delivery through a supplier.
Remember · Dropshipping: the seller sets the price and takes the order but holds no stock; a third-party supplier ships directly to the customer. An affiliate only promotes products for a commission.
Sources
- Asian Development Bank: E-Commerce Evolution in Asia and the Pacific: Opportunities and Challenges (November 2023) ↗ · reference work “Affiliates—refers to an individual who markets products in exchange for a percentage of the profits. (v) A drop shipping relationship—refers to a third-party presence that ships to consumers.”
Question and answer: UPSC's provisional GS Paper I (2026, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 1 Oct 2026 (how we verify). ·