Body shops is a term that refers to modern day information technology (IT) manpower outsourcing service companies with their ability to respond, deploy and cater requirements for skilled IT labourers.
Due to the large pool of such companies operating across the globe with its Indian origin or operational base, there is general tendency to refer Indian IT companies operating abroad as body shops or body shoppers or IT-sweatshops.

Operational Model
Most body shop companies will have an existing relationship with their client and they continue to work on building further revenue streams by analysing client's immediate or future IT skills requirements for supplying people.
Body shopping companies mainly recruit offshore and provide training to their employees using their offshore facilities.
Employment costs (both Fixed Term and Permanent) are generally offseted in the highly profitable billing ratio of 70-30 at a utilization rate of 80%. Most companies also take into account of the potential long 'bench period', where an employee is not billable or when his skills are not in demand.

Revenue Model
In India, traditional body shopping has evolved in its due course post-Y2K era to create strong networking and collaboration between competing Indian body shops working abroad. For instance in Hyderabad, all body shops claim to have the ability to place Indian workers in almost any country using the resources and services of other Indian bodyshops operating in the target country.

Criticisms

L-1 Visa
Sweatshops
List of Outsourcing Companies