Q87 · UPSC Prelims 2026 · Set A · Art and Culture

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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:

Page facts
Exam
Union Public Service Commission — Civil Services Examination (UPSC)
Board
UPSC
Stage
Prelims
Year
2026
Paper
UPSC Prelims — Prelims General Studies Paper I (General Studies)
Booklet
Set A
Question
Q87
Topic
Art and Culture
Syllabus
Indian art, architecture, culture — Prelims GS Paper I.
A Dropshipping Model
B Affiliate Revenue Model
C Transaction Fee Revenue Model
D Agency Revenue Model

Correct answer: (a) Dropshipping Model

Explanation

  1. A

    Dropshipping Model

    Dropshipping Model. This is a retail fulfillment method where the store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer, retaining control over the final retail price.

  2. B

    Affiliate Revenue Model

    Affiliate Revenue Model. This involves a business directing traffic or sales to an external website in exchange for a commission on the resulting transactions, rather than fulfilling orders or managing inventory itself.

  3. C

    Transaction Fee Revenue Model

    Transaction Fee Revenue Model. This model involves a company charging a fee for enabling or executing a transaction between two other parties, such as payment gateways or digital marketplaces acting as intermediaries.

  4. D

    Agency Revenue Model

    Agency Revenue Model. In this model, an agent or intermediary acts on behalf of a principal to facilitate a transaction, typically earning a commission or percentage of the sale while the principal retains ownership and pricing control.

Summary. Official key is (a). The dropshipping model precisely defines a retail setup where the seller controls pricing without holding physical inventory, relying instead on a third-party supplier for direct shipment. The other options describe different digital business models—such as commissions for referrals, transaction fees for facilitation, or agency commissions—none of which match this specific inventory-less fulfillment arrangement.

Same topic · past papers

UPSC has asked this before

These previous-year questions sit on the same topic. Open one to practise the earlier ask.

  1. 2025 · Q68 · General Studies · 2 marks

    Consider the following statements in respect of RTGS and NEFT : I. In RTGS, the settlement time is instantaneous while in case of NEFT, is takes some time to settle payments. II. In RTGS, the customer is charged for inward transactions while that is not the case for NEFT. III. Operating hours for RTGS are restricted on certain days while this is not true for NEFT. Which of the statements given above is/are correct?

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