Which example best represents a digital business?

An online store that dropships camping gear exemplifies a digital business because it primarily operates over the internet, leveraging digital technologies to conduct transactions and manage inventory without holding a physical stock of products. This model allows for greater flexibility, scalability, and reach, as it can serve customers from various geographical locations without the limitations of a brick-and-mortar setup.

In this scenario, the dropshipping approach is a core component of the digital business model, where the retailer sells products that are shipped directly from the supplier to the customer, streamlining the process and reducing overhead costs. This reliance on digital processes for sales, marketing, and customer service distinctly categorizes it as a digital business, which contrasts significantly with the traditional, location-dependent operations of a local grocery store, a hardware store, or a real estate office. These examples typically involve face-to-face interactions, physical inventory, and local customer bases, which do not fully embrace the digital model in the same way.