Business models like dropshipping have spawned offshoots like drop servicing, which you may be familiar with. As long as you know what you’re doing, the drop servicing business model can bring in a healthy profit with little in the way of initial capital.
But before you dive in, you may have questions about what “drop servicing” is, how it operates, whether or not it’s profitable, how it stacks up against a dropshipping business, and how to get started.
This book will teach you everything there is to know about drop servicing. You will also learn how to avoid the most common pitfalls in the industry so that your drop servicing company succeeds.
How Does Drop Serving Work?
Drop servicing is a way to run a business in which you sell a service you can’t do yourself and then give the work to a freelancer or agency that can do it. The only thing you have to do is sell the service to the client.
That means it is a type of outsourcing or service arbitrage, which is just a fancy word for reselling. You pitch and sell services to customers while the service provider does the work behind the scenes.
This is a lot like what businesses do offline when they hire subcontractors. If you ask any kind of worker to do something, the person you ask for a price quote is likely to give the job to another company or person. That’s the main point of it. Another great way to make money from home is to do dropshipping. You can even try both dropshipping and drop servicing, since you only need a small amount of money for each.
Dropservicing vs. Dropshipping
Dropshipping and drop servicing have a lot in common. Both strategies involve working with other people and businesses to fulfil customer orders, but there are big differences between the two.
Dropshipping is a popular and inexpensive way to run a business that lets you sell physical goods without having to keep track of your stock. Your suppliers will take care of the inventory, pack the goods, and send them straight to your customers.
Also, there are many all-in-one dropshipping tools and automatic solutions like Dropship Corporation that take care of most of the order fulfilment process for you.
Drop servicing, on the other hand, involves selling services like web development, copywriting, graphic design, video editing, and social media marketing. But instead of doing the work yourself, you hire a freelancer. Then you send your client the work you’ve done.
So, the biggest difference between a dropshipping business and a drop servicing business is that one sells goods and the other provides services.
Another difference has to do with how much competition there is in the market. Drop servicing is a newer business model than dropshipping, so the market isn’t as full as it could be. But you’ll still have to deal with problems, like finding good freelancers whose prices fit your budget.
Drop Servicing: How to Get Started
It’s easy to start a drop servicing business, just like it’s easy to start a dropshipping business. Follow these strategies and tactics step by step to learn how to start drop servicing so you can start your own business.
Do Market Reach & Pick Your Niche
Before you start a drop-off service business, you should do a thorough market study to find out what’s popular and what services people are willing to pay for. You might want to write down your skills and the areas you want to do well in. You can do this by looking at freelancers’ job boards and Google Trends to find in-demand skills and services.
Also, don’t forget to check how much money you can make with these services (the difference between the price the client is offering you and the approximate price the freelancer expects). If you don’t know where to start, you could also look at what your competitors are doing.
For instance, if you Google “Blog Writing Service,” you’ll find a lot of companies that already do it. Now you can go to their website to find out how and how much they charge for their services.
TIP: When you’re looking for a niche for your drop-shipping business, you might try a lot of different niches at first. But once you know what you’re doing, take your time and grow your business slowly.
Put together a team
If you want to run a drop-serving business for a long time, the freelancers you hire to do client work must be good at what they do, responsible, save you time and money, and save you money.
So, the second thing you need to do after picking the right niche is to look for freelancers or agencies to whom you can send work. Learning how to choose an outsourcing agency will save you time and help you reach all of your business goals. If there are service providers near you and you already know them, that’s great. The Internet makes things easier in other ways:
Job sites that are just for your service (e.g., ProBlogger for writers)
Freelancers and social media groups for a specific service (e.g. Pinterest Freelancers Groups & Facebook Groups)
No matter what field you are in, you should pick your top 5–10 candidates and then give each of them paid practise jobs. Yes, there is an initial cost. But if you choose the right service provider now, you can avoid the worry. When you run the test job, you need to keep in mind the following:
Make a profile or website that works well.
After you choose your niche and service provider (freelancer or agency), create a simple but effective profile or website based on your choice. When you make a website, make sure it works on all devices and is easy to use.
Your profile needs to get people interested and make it clear what services you provide. If you can add detailed contact information to your profile, it can bring you more potential customers.
Also, if the information on the profile is too hard to understand or too vague, it might turn people away. Remember to add proof and comments to your profile so that potential clients can trust you.
Find your clients and customers.
Since drop servicing isn’t a “fresh blue ocean,” it’s important to find customers. To do this, you need to know who your service is meant for or who your ideal customer is. Once you know who your prospects are, you’ll know where to look for them.
Many people would say that making a website is the best way to find customers and connect with other people. In some ways, this is true. Having a website shows that you are real and legitimate.
You should do your best to get to know your customers well so that when they need a service like yours again, they’ll think of you. Before you start looking for clients, don’t forget to set rates that are easy for both you and the freelancer to keep up. You don’t want to go too far and ask too much of the client.
Use Safe & Convenient Payment Tools
It’s another important step that’s also pretty easy, but many beginners don’t know what to do. Since you may have clients in the U.S. and other countries, as well as freelancers, you need to find payment tools that are flexible.
For domestic payments, you can use mobile banking, popular e-commerce sites, and so on. PayPal, Worldpay, Sage Pay, etc. are some of the most used tools for international transactions. You just need to find a payment tool that works for you, your clients, and your freelancers.
Get First Order & Keep Going
The first order could be easy or hard to get. No matter what happens, the only way to win the game is to keep your mind on it and not give up. As you talk to more potential customers and get to know them, you’ll learn what to do and what not to do.
Listen carefully to what these customers and prospects are saying. Is it too expensive? Do you lack a key detail that everyone should know? Do your competitors have a good name that can keep you from getting ahead?
Pros and cons of dropping servicing
Now you know what drop servicing is all about and how to start it. Let’s look at the pros and cons of this way of running a business.
PROS:
Start-up costs are low because you don’t need to learn a lot of service skills. Almost any job can be given to a third-party service provider who can do the job easily if you trust them. Make a one-page website that shows off the services you offer. This should be your startup cost.
One of the good things about this online business is that it can bring in a lot of money. A single sale can make you a total profit of up to $1,000.
Recurring Revenue: Recurring revenue is the other interesting part. You can make money online every month without spending anything extra. Some clients may decide to let you pay them a monthly salary in order to provide their services.
No Professional Skills Needed: In this business, you don’t have to do anything because everything can be outsourced and automated.
CONS:
If you’re good at drop-off service, you can make hundreds of dollars an hour without doing anything. You should know, though, that there are still some bad things about leaving the business.
Quality Control: The lack of quality control must be the biggest problem with drop servicing. You have no control over the quality of your order because you didn’t make it yourself. If you mistakenly hire the wrong company and they give you generic work, you’ll have to spend a lot of time fixing it. This completely gets rid of the idea of drop servicing.
▪ Moral Issue: There are always ethical issues around drop servicing. This is mainly due to some people not disclosing that they outsource or hire someone else to do the job. Customers think that the person they are talking to is a service provider because of this.
▪ Rely on Freelancers: As you know, the business is hiring other people for your work to expand the business. So, if you want to make money, you will have to use outsourcing and online freelancers. But what if your freelancer has too much work from other clients and can’t help you at the last minute? What if they fail to deliver your work on time and the situation continues until you receive the refund request?
Final Word
Service reselling is a good business idea that can help you make a steady stream of money by putting customers who need services in touch with good service providers. Because of this, drop servicing is becoming more common.
But the goal is to work with a trustworthy white label organisation to run a business that will last and make money. Stay away from freelancing and outsourcing because these are usually short-term solutions that don’t give you any stability or room to grow.
