Introduction to Drop Servicing
In this section, I will give you a brief introduction to drop servicing.
‘Online Business’, if you had a dollar every time someone mentioned the term ‘Online Business’, guess where you would be right now. Be it eCommerce, online social networks like YouTube and blogging, online businesses are thriving in the 21st century.
However, operating an online business can get taxing on several levels sometimes. Almost every online business demands expertise in a precise field, full dedication, on-mark managing skills, scalability, and patience. This is where drop servicing comes in.
It might sound too good to be true, but drop servicing is the latest online business that isn’t expensive to begin and can be managed remotely. This online business model demands your dedication and diligence rather than your money to invest.
Given how some people have managed to earn 6 to 7 figure money online via drop servicing, it’s only normal that people are getting more intrigued by it with each passing day. If you are someone wondering about drop servicing and whether drop servicing is the right business alternative for you, I advise you stick around.
By the end of this complete guide on drop servicing niche, you will know
- What is drop servicing?
- How it stands out from other online businesses
- How to get started with drop servicing business
- How you can find clients for drop servicing and so much more.
So, what are you waiting for? Let’s barge in.
What is Drop Servicing?
In this section, you will learn the drop servicing definition.
Drop servicing is an online business model in which you hire a freelancer or agency in order to deliver a service to clients/ customers.
For instance, a client wants a service and is willing to pay you $50. You find a freelancer or an agency that does the work for you at $30. Now, without letting the client know you outsourced the project and pocketed the profit, you can be the intermediate between them. This process is called drop servicing.
Drop servicing, also called service arbitrage, is a highly lucrative business model in which you sell a service that you don’t essentially create by yourself. In short, you play the role of middleman between the receiver and provider and take the price difference as profit.
How Does Drop Servicing Business Model Work?
Learn the basics of drop servicing business model.
Bringing the drop servicing business model to a more real-world scenario, drop servicing is quite analogous to subcontracting. After getting the contract of a building or other similar project, the contractors will subcontract the project to the architects and adroit people who know how to do that job.
Likewise, in the online market or world, you search for a client, find a job after which you will place orders to the freelancers who actually know how to do that job.
The working of the drop servicing business model is rather simple. Below listed are the steps on how drop servicing business model work:
- Either a website or a profile is created by the middleman in which he/she promises to sell out a monetizing marketing service for which people (clients) are willing to pay.
- Advertise your service and show the credibility of the service and you as a service provider.
- After getting the project for service, seal the deal and finalize the payment and deadline.
- Find a suited freelancer or service provider to do the work at the price that suits you as well as the freelancer.
- Once the freelancer completes the project or service, hand it over to the client.
As mentioned earlier, the drop servicing model is somewhat simple. However, you do need to build broader connections with clients who offer jobs and freelancers who deliver the job.
What Do You Need to Get Started with Drop Servicing?
In this section, you will learn what you need to start a drop servicing business.
After you decide that drop servicing is your career path or future, there are still some more things that you need to know, consider and have, to get started with drop servicing.
How to Start Drop Servicing?
In this section, you will learn what you need to do to create a drop servicing business.
If you are still going through this blog, then your intrigue for drop servicing is actually serious.
Some very innovative people keen on drop servicing, who actually have the potential to make it huge in the online service business, are stuck just because they don’t know how to get started. If you are among those, you landed in the right place.
Keep following these step-by-step strategies and tactics to learn how to start drop servicing, so you can create your own profitable business.
Step #1: Do a thorough market search for drop servicing business niche/ideas.
The first towards starting your drop servicing business is to conduct thorough market research to figure out what’s hot and for what services people are actually willing to pay.
For starters, you can pen your skills and the field you want to excel in. You can check out freelance job boards and Google Trends to find out the skills and services that are very high in demand.
Also, check for the profit margins that these services provide you (the approximate price of what the client provides you and what the freelancer expects).
I suggest you start by checking this post about niche research.
Note: While searching for a niche of drop servicing business, you might be tempted to try on many niches at the beginning. However, take it slow and gradually grow your business once you get the hang of it.
Step #2: Build your team of freelancers and agencies.
If you want your drop servicing business to be a hit in the long run, the freelancer who actually does the client job must be proficient at what they do, accountable, time-efficient, and cost-effective.
So, after picking the felicitous niche for you, the second thing you have to do is look for prospective freelancers or agencies that you can outsource the project. If you have the service provider in your vicinity and you already know them, that’s great. Else, the internet has made things easier for you.
There are certain platforms where you can search for potential freelancers or agencies. Here are some platforms you can use:
- Freelance groups of Facebook and LinkedIn.
- Freelancer platforms like Fiverr, Upwork, People Per Hour, etc.
- Service/ skill-oriented job boards like Problogger for writers.
- Reach out to white label agencies that provide the service you are looking for.
Look out for the professionalism, proficiency, discipline, attention to detail, and authenticity of the freelancers that you come across.
Once you have built a team of freelancers or white label agencies, you might want to build a nice cordial relationship with them which can lead to recurring professional endeavors.
Also, settle how you are going to pay for freelancers (per hour, per word, per project, and so on). For this, you will need a rough estimate of how freelancers are charging so that you can turn on your negotiation game.
A great resource that can help you in making this step easier is AND.CO from Fiverr.
Freelancer or White label agencies for outsourcing?
Fledgling drop servicers might scratch their heads thinking whether to outsource the services to a freelancer or a white label agency. To be honest, both of them have a catch.
There are many white label agencies out there and they sell the services to middlemen like you. Plus, white label agencies are considered more reliable than a freelancer so you will be taking smaller risks.
However, white label agencies generally demand more payment compared to freelancers thus resulting in fewer profit margins.
If you take time and are able to find a reliable and capable freelancer, this will give you the benefit of better profit and also better quality.
However, a freelancer can disappear from you after taking the assignment. So, beware of both ways!
Step #3: Make an optimized profile or website and keep it updated.
Upon deciding your niche and service providers (Freelancers/ White label agencies), another step will be creating a simple yet effective profile or website as per your decision. If you are making a website, make sure that the website is responsive to all devices and easy to navigate.
Your profile needs to be appealing to the clients clearly stating the services you provide. If you can add your contact information in detail in your profile. Also, don’t make things too complicated and vague.
Keep up on updating your profile with credentials and reviews so that potential clients can trust you.
Step #4: Define your services and approximate your rates.
You have to mention the services that you are providing to the clients. This should not be difficult after picking a niche. For instance, if your niche is content writing, clearly state the services that you plan to incorporate like travel content, technical content, Hollywood content, and so on.
In addition to defining services, you also need to approximate and set the rates. Don’t rate too low or you might not even be able to afford the freelancers, let alone earn the profit. Don’t set extremely high rates that will scare away the customers at a first glance.
Step #5: Search for clients and build networks.
Finding clients is a vital step for drop servicing. For this, you need to know the target audience/clients for the service that you are providing. Upon knowing who your potential clients will be, you will know where to look for them.
Many might argue that building a website is the best way to search for clients and build networks. This is true to some extent. Having a website does show that you are legit and authentic. Ensure to make a nice relationship with clients so that you will pop into their minds next time they need a similar service.
Before finding clients, you need to set rates that will sustain you and the freelancer conveniently without going off the charts and expecting too much from clients.
If possible, justify the cost you have set with the service you provide.
Step #6: Direct and train your team.
As things start growing in your dropshipping business, you have to direct your team of business handlers and freelancers.
Form some code of ethics, guide the team and freelancers through the requirement of clients and even provide training if necessary.
Fiverr Business is a great starting point since you can start managing your team for free.
Step #7: Use convenient and flexible payment tools and methods.
This again is another crucial and rather easy step that has many beginners scratching their heads.
Given you might have both national and international clients as well as freelancers, you need to find flexible payment tools.
For national payment, you can use popular eCommerce sites or mobile banking, etc. For international transactions, some of the hottest tools are PayPal, Worldpay, Sage pay, and so on. Although most platforms have now payments integrated so this should not be an issue.
You just need to look out for the payment tools that work for you, your clients, and freelancers.
Personally, I use Payoneer and I couldn’t be happier. If you’re selling internationally through marketplaces like Amazon or platforms like Shopify, Payoneer will help you achieve better exchange rates when repatriating your global sales, make same-currency supplier payments and accept funds from anyone.
Step #8: Market/advertise your services.
You should start marketing your services from the very beginning.
In addition to broadening your channel and building connections, this step will help you to reach a bigger domain of people, people who might turn to potential clients or even service providers.
There are several tools and mediums to do this online like Facebook groups, LinkedIn, forums, etcetera.
The basic here is – while advertising your services, be persistent and professional rather than seeming desperate and pushy.
You can get some great ideas on how to market and advertise by reading this niche marketing strategies article.
Step #9: Offer credible services, customer support, and reliability as much as you can.
You need to know to make your clients happy so that they come back for more. Respond to their contact and email in time. Clear their confusion, provide them realistic deadlines and try to deliver reliable services.
These things might not seem like much at first, but over time the credible service, customer support, and reliability are going to help you establish a successful drop servicing business.
For this, I strongly suggest you consider Customerly. The simplest way to create and manage lasting relationships with your clients. You’d be surprised by the number of potential clients you can lose by the simple fact of not being able to answer simple queries. With Customerly, you remove that risk.
In conclusion, this section will provide you all the info you need on how to start drop servicing even if you don’t have previous experience.
How to Get Clients for Drop Servicing?
In this section, you will learn some methods to catch your first clients.
The success of your drop servicing business highly depends on how proficient you are at building connections and finding clients.
Finding and getting clients can get demanding and it might tire you out when you are a novice middleman getting started with drop servicing.
There are several successful channels that people have been using to market and advertise their services in order to find clients. Many people have a common misconception that you need to own your own website to get started with drop servicing and find clients.
For instance, there are other channels like LinkedIn, Upwork, Forums, Fiverr, Facebook, and many more which you can use to get to your potential clients.
You can also target to get clients using paid advertising for drop servicing.
Below are listed the steps you need to follow to get clients for drop servicing.
Step#1. Optimize your profile and define your services.
Alongside making a profile on marketplaces like Fiverr, LinkedIn etcetera, also optimize your profile from time to time. Make sure that your profile is concise and provides people with a brief summary of your services.
If you are hosting a website, make the pages easy to navigate. Your optimized profile needs to clearly define the services that you provide to the clients.
- Respect the time of your clients and provide them concise and complete information quickly.
- Provide your contact information (Email Id, Phone number, or any other means) that you actually use.
- Provide credentials, reviews, credibility report if possible.
- Define your services (content writing, data entry, video editing, website design) in brief and with clarity.
Step #2. Demonstrate authority and credibility.
Once you have set up your profile/ website and expressed who you will be serving, it’s important you establish your credibility and authority.
While you are looking for clients, be flexible but also remember to have authority over your services. Depict your seriousness, credibility, and authority over the services you provide.
Put in the links and reviews of your previous clients or show them the expertise they require. This can help build the trustworthiness of your site.
Step #3. Advertise on several platforms.
You can also give some free strategies and advice to clients for expanding your online business.
This is just one of the strategies (one of the oldest and evergreen) to expand the horizon of your business. If you have money to pay for ads, you can do that too.
Otherwise, engage in groups over several social networks like Facebook and LinkedIn and market your services.
You can get some authentic and catchy samples from the freelancers and advertise using those samples well.
Make sure that when your advertisement tactics work and potential clients check out your profile, your profile turns those random visits into business opportunities.
Step #4. Be professional and less pushy.
When you are in any business, it’s important that you emanate professionalism.
To get and connect with more clients, you have to put yourself in the client’s shoes and understand why they might not trust someone they just met.
Rather than just pushing them to take your services or expecting them to believe you right away, you should let your professionalism and services speak for you.
Potential clients might turn from your doormat if you are too pushy with your services.
Be professional with your clients, don’t use swear words, slang or get too personal.
Revere the time and space of business owners/clients and approach them with more professional and formal social networks like LinkedIn and Emails.
Step #5. Call to Action.
In absence of a call to action, you might not land any clients for drop servicing business, even if your profile exhibits great credibility on your services and you have used proper advertising strategies.
It’s crucial that you mention all the steps like how they can contact you, when you will be available, how to process further, and so on.
Without a play of words or anything of that sort, if you clearly specify how they can contact you and how you would be helping them, this will inspire a call to action.
Drop Servicing Niche Ideas
In this section, I’ll provide you with a list of the best drop servicing niches.
As in any other business, there are several niches that you can pick for your own drop servicing business. But if you want to increase your chances of succeeding, you should target popular evergreen niches.
Taking into account that drop servicing is about outsourcing services, the key is to find some of the most demanded services.
Below, I have compiled a list with some of the best drop servicing niches to consider for potential online business.
- Infographic designs.
- Search engine optimization (SEO) services.
- Graphic design services.
- Coding (Programming).
- Content creators.
- Social media management.
- Video creation and animation.
- Ads creation.
- Voice over services.
- Ecommerce website.
- WordPress fixer.
If you want to know more about each of these niches and learn how much could you profit with them, check the 10+ best drop servicing niches.
Drop Shipping Vs. Drop Servicing- Which is Better?
Learn which one is the best for you.
After explaining all that we have about drop servicing, now let’s head onto the difference and similarities between dropshipping and drop servicing.
Dropshipping requires a middleman or intermediate to ship out actual physical products instead of services. Dropshipping is popular because it lets one sell products and get away with the profit without actual inventory.
Both drop shipping and drop servicing business models have their own pros and cons. Using some important factors, the several defining edges of drop servicing and drop shipping is explained below-
Both drop shipping and drop servicing require less overhead compared to other businesses out there.
However, generally, drop servicing requires even less start-up costs or investment than drop shipping.
Shipping period/ Delivery periods.
Here, drop servicing wins.
Shipping orders, and delivering them to the client/customer could take forever. So that is a disadvantage of dropshipping.
However, as a part of drop servicing, you will just be delivering services. Which in most cases is more flexible and convenient.
Drop servicing provides you more capacity and also the decision to set and leave as per your desire and convenience.
When you are in a dropshipping business, you need to monitor orders and deliveries. Other than this, you also have to find or replace out of stock products.
Other than the alluring set and leave promise of drop servicing, you can pick a freelancer for providing services and start a job immediately.
Returns and refunds.
One of the greatest edges that drop servicing has over dropshipping is the refunding and returning issue of dropshipping, which might result in high losses. This might even result in a compromised reputation.
There is definitely a matter of reputation in drop servicing as well but since you will be dealing with online services rather than tangible goods and physical products, the probability and aftermath are a lot less severe..
Dropshipping is overall way more competitive than drop servicing.
Dropshipping requires solid customer support for successful operation. However, drop servicing doesn’t require much customer support.
Scalability, Risk, and Profitability.
Both dropshipping and drop servicing are scalable businesses. When you are in for the long haul, dropshipping demands more time and persistence.
As the dropshipping business progresses, it will require resources plus the product shipping process also involves complications of its own. So, dropshipping is more prone to risk than drop servicing.
If you give your dedication and time, both drop shipping and drop servicing are a profitable business.
Just like any business or any role in the world, responsibility is utterly important in both dropshipping and drop servicing. Since you will be acting as a middle man, even if your freelancer fails to deliver in time, you will still be accountable for that.
Overall, dropshipping is a bit more tedious than drop servicing. So I’d say drop servicing is the winner.
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