How do onramp companies buy crypto for their customers?

Does anyone know how onramps are doing this?

Do they take a customer's fiat, then go to an exchange and buy the cryptocurrency with the fiat, and then send the cryptocurrency to the customer's address (it would be automated, I assume)? It seems like the onramp would be paying a lot of additional fees to the exchange for that.

Or are they acquiring the cryptocurrency some other way? Or maybe they have a large amount of cryptocurrency that they've bought (through an exchange?), and then they give a portion of it to the customer in return for the fiat? It seems like that would not be a good business model if the price of the cryptocurrency that they were holding plummeted.

Does anyone have any insight on this?