Ever heard of Drop Servicing? If you are still not familiar with the drop servicing business model, here is everything you need to know about this new and popular trend in the world of online business.
Perhaps you’re looking to get into a new business. Maybe you want to get your side hustle on. Whatever the reason, many online entrepreneurs are turning to drop servicing.
This brand new business model has not yet been over-saturated and it’s ideal for someone familiar with e-commerce, or just someone that’s Internet savvy.
In order to have a complete idea of the concept, let’s start with the basics.
What is Drop Servicing?
Drop servicing, also known as service arbitrage, is a type of business model where you sell services performed by some other company or person. You do not directly perform the services to the clients.
And the best part? You don’t need to know much, if anything, about how to actually perform that service. Maybe you sell graphic design or web design services. You don’t need to be an expert at Photoshop or SQL.
It is quite similar to the process of sub-contracting or outsourcing of services. In the drop servicing business model, the profit comes when the services are provided to the client at a higher price, but you only pay a small amount to the freelancer or seller.
For instance, maybe you sell Facebook ads management. A client hires you for $500. You then hire a freelancer to do the job for $100. That’s a $400 profit and you’re not doing any of the heavy lifting.
Intrigued yet?
What are the advantages of Drop Servicing?
One of the major benefits of drop servicing is that it is one of the easiest ways to start a business because you don’t need technical skills.
If you’re familiar with dropshipping then the concept should be simple enough to understand. Dropshipping is where you sell a product that is fulfilled by another company.
Yet, when you compare drop servicing vs dropshipping, drop servicing proves to be less risky.
You don’t have to worry about refunds or returns of products or problems with shipping.
What can you Drop Service?
You can drop service anything that has a vibrant market. You can sell almost any service for a higher price than that the original purchase price. However, having a good understanding of the service that you are selling is important.
While you may have a number of drop servicing ideas, it is always wise to determine the number of people interested in that particular service and its competitive level in the market. Choosing to drop service an in-demand service with low competition can provide opportunities to make more profit.
Some of the services that you can drop service include:
- Video Editing
- Resume writing
- Lead Generation
- Blog Posts
- Web Design and Development
- Guest Posts
- Backlinking
- Advertising Campaigns
- User Testing
- Video Creation
- Ad Copywriting
- E-Book Creation
- Healthcare training, marketing or coaching
The list of jobs that you can sell goes on and on. Although, while you can offer any number of services, focusing on one niche can help you establish your drop service business more efficiently for target consumers.
Among the different drop servicing niches, when you want to select one service, make sure to look at the latest Google trends and determine the service with a high search volume.
Additionally, make sure to consider marketing methods that have been proven effective within your industry.
What are the Pre-Requisites to Getting Started with Drop Servicing?
Now that you understand a bit about the drop servicing business model and have knowledge about potential services that you can sell, the next thing is to determine a starting point. There are certain pre-requisites that you need to know.
The first thing you need is a website to sell your services. The drop servicing website is important and necessary.
The next thing you will require is a list of selected services as well as service providers to deliver chosen services. Apart from this, other requirements include keyword research, a payment processor, traffic, and basic email marketing.
When you have all the essential requirements, you are ready to start your drop servicing agency.
How to Start a Drop Servicing Business?
Basically, there are two ways you can start a drop service. One is a free way, and the other is the paid way. While the first approach may take some time to give you the desired profit, the second one is a quicker option.
Also, don’t forget old school marketing methods, which may be cheaper in the long run.
The Free Way
When you choose to start your drop servicing agency the free way, here is a step by step process.
Select the Service
The first step is to choose the service or a list of services that you will offer. Invest quality time in choosing the services wisely as it will have a direct impact on your business. The better your service choice; the better the chances of you enjoying greater benefits.
Find a Freelancer
Once you know what services to provide, you can start looking for freelancers to do the actual leg work. With various websites like Fiverr, CodeClerks, WordClerks, ListingDock, and more, you can easily find freelancers. Facebook is another option.
Choosing a reputable freelancer with good reviews and high ratings can help in maximizing your profits.
Register as a Seller
You can get your business registered as a seller on Upwork or Fiverr. Being registered is a requisite for soliciting freelancers. In addition to the ability to post jobs, you can browse profiles of freelancers and reach out to those most suited to your job requirements.
Upwork also tracks hours and processes payments.
Make sure to define your services creatively while registering so as to attract more customers.
Take Orders and Deliver Services
Once you receive an order from the client, make sure to understand the exact requirements, and collect all important information. Accordingly, convey the same to the freelancer as you place the order.
When your freelancer finishes the task, you can deliver the order to the client.
They won’t care who actually completed the task as long as it is done to satisfaction. That is why the proper screening of freelancers is essential.
Build Your Social Media Presence
You can spend a lot of time building up your social profiles. Acquiring fans who like what you do will give you a pool to target your services. After those fans consume your content, you can use remarketing ads that have a history of being far more effective than ads to cold targets.
The Paid Way
Now, when you choose the paid way, here are a few things to consider.
Drive Traffic
Driving traffic is one of the most challenging tasks of the drop servicing business model. While getting the first few orders may be a tough time, knowing the right strategies can help in making the process easier for you.
In order to drive traffic for your drop servicing website, you can make use of Google Ads. With Google Ads, you can place your ads on the Google search network and drive more traffic. Facebook ads are another option to reach your target audience.
Find a Freelancer
This step is similar to the freeway approach. You can search for reliable marketplaces like Fiverr and find a reputed freelancer to provide the services for you.
Build a Website
In the paid approach, you need to build a drop servicing website. To build a website, you would require a host as well as a domain. Make sure to give a professional look to your website.
Once you are done with the creation of your website, you can start receiving payments using WooCommerce or PayPal.
Receive Orders and Deliver Services
Once you start getting traffic, you will soon receive service orders. When you get orders, make sure to collect important information from the clients.
This includes contact information and specific requirements. Make sure you agree on measurables and define success.
Then you simply hire a freelancer and place the order for a lesser price. Once the freelancer completes the task, you can successfully deliver the services to your respective clients.
Where can you find freelancers for your Drop Servicing Business?
We mentioned a few websites above, but that’s just the tip of the iceberg. There are hundreds of quality websites where you can find freelancers.
When you are looking for a freelancer for your drop service business, some of the popular market places include Fiverr, Upwork, ProBlogger, Freelancer, HubStaff Talent, and People Per Hour.
In these marketplaces, you can find the complete profile of a number of freelancers. By reviewing their profiles, considering their work experience and ratings, you can find the best freelance for your business.
You must also check the prices they are charging in order to make good profits. Invest some time in selecting a reputed freelance to achieve more profits for your business.
And remember, the cheapest option is not always the strongest – you get what you pay for! Yes, profit is important. But if you provide poor quality to your client then you won’t get repeat business or gain new clients through word of mouth.
What is the cost of starting a Drop Servicing business?
When you want to start a drop servicing business, knowing and understanding the costs is important. The cost depends on whether you want to start your business in the free way or through the paid approach.
A combination of both is recommended though. Of course, when you first start out you won’t have a lot of capital so using organic methods must be a part of your initial strategy.
Eventually, you will also need to invest in a platform like Google Ads in order to drive more traffic. Then, after you receive orders successfully, you can invest more in advertising and grow your drop servicing business.
More Tips for Success
When you are new to drop servicing, knowing effective tips can help you become successful. Here are some things to remember in your entrepreneurial efforts:
Know your Service
This is the first and most important tip for beginners. Starting a business without sufficient knowledge about your service can put you at a great loss.
But wait! We said earlier you don’t need to be an expert in what you choose to sell. That’s true. But you need enough of an understanding of the service in order to sell it to someone else.
Your primary job is a salesperson. You will talk to potential clients and they need to feel like you’re an expert.
Consider the Profit Margin
Gaining a good profit is the core aim of every business. Having a professional-looking website can help build credibility.
Moreover, try selling services at a much higher rate than you actually purchase them for.
Invest time in Keyword Research
When you have a website for your drop servicing business, invest time in keyword research and search engine marketing. Effective keyword research can help you find the best keywords to add to your advertising campaign.
Looking for keywords that meet the buying intentions of the clients helps in driving more traffic for your business.
Always have Back-up
When you hire freelancers, having one or two back-ups is important in order to keep your drop servicing business going. In case one of your freelancers is not available or does a poor job, the backup freelancer can jump in and complete the service on time.
It helps in meeting the demands of the clients at all times and creating a good impression.
Upsells
You can add some upsells to your business with a coherent sales funnel, a relevant service or 24-hour delivery. Adding these upsells for some additional amount can help in making more profits for your business.
What are the cons of this model?
While drop servicing businesses are full of opportunities and benefits, there are a few limitations too. For instance, the delivery time of the service can vary when you hire a freelancer that works with other businesses and clients.
As not all the sellers or freelancers can deliver the service on time, the delivery can be late at times. As customer satisfaction is of high importance in this business, any issues can affect your business reputation.
Make sure to hire the best freelancers to ensure optimum customer satisfaction without any problem.
Wrapping Up
Drop servicing is emerging as a popular business model in the online market. When comparing drop servicing vs. drop shipping, the former outweighs the latter in a number of ways.
While it is easy to start a business following this model, understanding all the important aspects related to it and choosing the right niche among the various drop servicing niches is important.
With effective implementation, you can enjoy great profits. Choose the right service and a reputed freelancer, and get started with your drop servicing business.