You must have heard of drop shipping, this it’s been there for quite some time
Drop shipping products helped to businesses to grow with little overhead.
You just need interested buyers of products and your product and the products could be delivered right to the customer’s doorstep.
Drop shipping allowed entrepreneurs to build their websites/e-commerce stores around products which their audience could purchase and get them delivered right to their doorstep. Entrepreneurs neither needed to produce the product or keep the inventory, the product could be shipped on their behalf with their branding and delivered to the doorstep of the customer.
But, do you know what is drop servicing?
Drop servicing is not something new, it has been there since ages.
Probably since trading or business activity itself started around the world.
Drop servicing is just like drop shipping, but here we are talking about services instead of products.
Let’s look at this in more detail.
Table of Contents
What is Drop servicing?
Drop servicing, also called service arbitrage is a business model wherein you find potential clients who need a service, but the clients are not aware that you are hiring someone or outsourcing the service from other provider.
For your client you are the main touch point, they trust you and it is your duty to deliver the service to them. Client is not bothered how you get it done, either you do it yourself, hire someone or outsource it to any other supplier. Your role here is to get the job done for the client in the best possible way so that your client is satisfied with the service you have provided.
Drop Servicing Business Model
Let’s take a look and see how the drop servicing business model works in the real world.
This is like sub contracting. For example you have a construction project. Once company gets a contract, the company might not have their own interior designers or electricians hence they sub-contract this work to third parties who deliver the work.
In the digital world, you can find clients who require graphic design for their blog posts or social media, or SEO for their website.
You can hire freelancers from freelance market places who can provide you graphic design services or SEO services.
Before you quote your client for the service, you need to agree on a fixed price what the seller or freelancer will charge you. Once you agree the price with the freelancer, you mark up the price and send the quote to your client.
The marked up price is your profit.
Drop Servicing Ideas
Give it a thought, you can drop service absolutely anything. You should drop service only something that you know about and you have knowledge about, otherwise you are bound to fail.
Its fine if you do not know how to do that service, but you should have some experience about the service, you should know and understand how the service works.
Below are some drop servicing ideas
- Graphic Design
- Web Development
- Writing
- Admin Support
- Marketing
- Accounting
- Engineering
- Architecture
- Music & Video
There are many other things that you can drop service, there are no limitations.
7 Steps on how to start a Drop Servicing Business
Let’s look at the below 7 steps which can help you to start a successful drop servicing business
1. Find a Drop Service/ Services
When you are just getting started, this step and step 5 could be crucial for the success of your business.
Do your research online for the services in demand. I recommend you find your answer in the most obvious place you can search, ie Google.
Search for short phrases related to your keyword.
Take a look at the snapshot below. I searched for the term “SEO services”. You can also search for more targeted phrases like “SEO services in London” or “SEO services in UAE”.
Do you see ads on the first page of results? If you see ads then this is a good sign. It means people are willing to spend money on ads trying to reach your audience. This shows there is substantial audience interested in your service.
If you find competition it’s a good thing. It means audience is there and you can reach out to them in your own unique way.
Search and compare your services on Google Trends. Look at the below screenshot I searched the term “Social Media Marketing”
From the data analysis, you can see that there are people looking for social media marketing services. Next step is to find a provider/freelancer with affordable price.
2. Getting Started
To start you need to identify the service or services that you plan to promote to your potential clients.
Start with a service wherein you have a good understanding and you have worked on that service before with some previous experience. Even if you have not implemented the service yourself its fine but you just need to know how it all works.
Just start with one service first, you can always add on services later on, once you are comfortable and have had fair amount of success with the first service. This will help you keep focused and it will not overwhelm you when you are just getting started.
If you plan to provide social media marketing services, find a quality social media marketing service provider.
Give the provider a test project, like he can provide social media services for your business. Spend some money this will help you to know about the lifecycle of the service.
3. Create a Website
You absolutely need your own website, without this if you market your services on social media, then people will not trust you.
A small simple and neat website will work. To start with this is enough you can always scale up and add more pages when your business expands.
Identify the right domain name. Register the domain name with – click here to find good domain names.
Setup your web hosting with a reputed hosting provider like Siteground.
Do you know wordpress? If yes you can use GeneratePress themes which are highly recommended for SEO optimized site.
If you are not tech savvy then use a website builder like Weebly. Check our my resources page
Or the other option is to go to Fiverr where you will find many freelancers who can help you to create you perfect website to start with.
4. Where to Find Drop Services?
The best place to find drop services is freelance platforms. On these platforms, freelancers post their profiles with the details of the services they provide, testimonials of the work done by the freelancer, their ratings and more.
You can also post your custom job/project with the requirement specifications and budget.
Top Freelance platforms where you can find services to resell
Test out your freelancer before you finalize them. Give them a small job, look at the reviews on the freelancer’s profile, testimonials, how much he is charging and estimated time to reply to your queries.
Take out time to browse through the policies and terms of the freelance platforms. Refund terms and your rights as a buyers.
If you are not satisfied with quality of service provided by the freelancer you can file a complaint or dispute and the platform will find an adequate solution so that you get your refund.
I would recommend you to start with Fiverr first. The reason for this is that I am using Fiverr to find freelancers for graphic design, wordpress development and more.
Your test project is the key which will give you insights about the pricing, time it takes to complete the job, quality and the scope of the service.
5. Get your First Client
Getting your first project is a bit difficult, but things start getting easier after you have passed this stage.
Make sure you deliver the project in the best possible way and keep your client satisfied. Who knows this one client can be your repeat customer or he can even refer you to more clients.
6. Deliver your Service
Deliver your service and the quality of your service should be good enough so that client gives you a good testimonials.
Testimonials will help to build trust for your business and this will also help you to get more business in future.
7. Repeat
It’s party time. You have completed your first service successfully and even got a testimonial. Now repeat this again. Once you get authority over this service then you can add on more services as per your convenience and your business plan.
Pros of Drop Servicing
There are many benefits of drop servicing you want to start your own business with limited capital.
You don’t need to have a office, so no need to pay rent.
You don’t need to hire full time staff, your expenses for a service starts only after you get payment from the client for the service that you are providing them.
Hence your overheads and monthly expenses are minimal, you only need to concentrate and invest on marketing your services.
Cons of Drop Servicing
Your service quality and business is highly dependent on freelancers and quality of freelancers. Hence choosing the right freelancer is crucial.
If your freelancer delays the project then you will be answerable to your client.
Unless you delegate your work and hire a support team for multiple projects, you will have limited growth. Otherwise you will get trapped and only take projects you can deliver at a time. If you take limited projects then you will earn limited revenue.
Conclusion
Congratulations, if you have reached this far. Thank you for reading this far.
I have been implementing drop servicing for my own business since 2 years now. You can check out my digital agency page RTIntellect.com. I have been successfully using the above drop servicing techniques to grow my business and list of the services I provide.
Let me know in comments if you want to know anything more about drop servicing, any queries you have. I will be glad to help
All the Best!
