If you are an online entrepreneur, you must have definitely heard about drop shipping, but there’s something more that can help you make money without doing the work yourself- drop servicing

Yes, that’s exactly what you would have guessed- an online business model where you act as a mediator (to sell services) by selecting a few service providers and find clients to benefit from the service arbitrage. 

Its only difference from drop shipping is the fact that you do need to have a basic understanding of the concerned drop service since you would be managing projects with your personal image being involved throughout the entire process.

Have a glance at this article to understand the drop service business model and drop servicing works in reality.

Table of contents

Understanding The Drop Servicing Business Model

To begin with, it is an online business model where you act as the service provider for various skill-based digital services.

You can equate this business with a white label marketing agency that finds potential customers, and instead of hiring full-time employees, it relies on hiring freelancers. 

As a rule of thumb, these individuals provide cheap services, which allows the white label agencies to benefit from the price difference. As a white label agency, you can offer a particular service or a combination of below digital marketing offerings:

  • Paid advertising
  • Google trends
  • Sales funnel creation and optimization
  • Lead generation
  • Web development
  • Writing services
  • Graphic design
  • Social media management

For instance, if you want to offer high-quality content writing services, you can allocate the workload to a freelance writer for a fixed price. 

Your job is reduced to quality control, handling customer complaints, and ensuring that the projects delivered are up to the mark. You can also go for sub-contracting with other companies as long as you don’t lose money in the process. 

Generally, such businesses prefer having their own website since having their own digital footprint is necessary to keep your organization/side hustle within the realms of a viable business model. 

Operating as a mediator requires you to be well versed with the business logistics revolving around each specific service.

Drop services are, therefore, one of the best alternatives for intrapreneurs who are looking to cater to potential clients without personally working on the projects. 

Thus, the agency model combined with the dropshipping business model can be a great platform to scale up your business before you start investing a lot of money into it. This is one of the rare combinations where you can get a handsome reward at a relatively lower risk. 

As you bag more clients, you can always hire full-time employees who take care of the operations on your behalf. 

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Why Should You Start Drop Servicing Business?

From all the details that we just covered above, it is apparent why drop servicers find this industry so lucrative, but you should always set your reasons straight.

The high demand for online marketing and other services like graphics and BI combined with the surge in the number of people and businesses willing to offer these services makes decision-making difficult. 

drop servicing

In such a situation, there is ample room to find new clients and establish yourself as a service provider that assumes the responsibility of getting the work done with little to no investment involved.

The drop servicing model allows you to bypass the entry barrier and the need to personally work on each project. This can be an appealing opportunity for folks who are good at back-office jobs but don’t have an interest in learning a particular digital marketing skill. 

At the same time, it also provides you the ability to access the entire talent pool to find the most suitable vendor for getting things done. This is one of the biggest reasons why you can maintain a healthy margin irrespective of the type of projects you undertake. 

Another great advantage that differentiates it from any other business model is the fact you scale up pretty fast without worrying about the workload. 

This can be considered as one of the best combinations of advantages since there is an unmatched amount of flexibility involved in each portion. No doubt, drop-servicing businesses have become one of the most sought-after forms of entrepreneurship. 

How To Select Your Drop Service For Your Business Model?

The first thing you should undertake is to develop a drop servicing blueprint. This starts with selecting a niche for your drop servicing business.

Ideally, you should be skilled enough to understand its basics and overlook the work in progress. Also, you must be able to communicate with your clients regarding the need for any changes since you are entrusted as the person responsible for getting work done. 

Drop servicing requires you to build a network of freelancers for each of your domains, be it search engine optimization or social media marketing since the budgets and workload keep varying.

It is not necessary that you come up with the entire infrastructure well in advance but make it a point to never bite more than you can chew as you get started with drop servicing.

Lead Generation

Once you have thoughtfully outlined these aspects of your drop servicing business, you must move ahead with lead generation. This can be considered as another major part of your work apart from overlooking business logistics. You can sign up on freelancing platforms like Upwork, Truelancer, and Fiverr to source clients. 

LinkedIn is another great option if you want to go for direct outreach since it comes with its own set of benefits. At the same time, you can also go for creating your own site and run ads on social media and Google.

Thus, you can choose the platform according to your convenience, but there is something more that needs to be taken care of before you get started: building an ideal customer persona. 

It is very important to define who your clients will be, how much they would want to spend, the market prices, the mode of communication they would prefer, payment terms, and what quality they would look for.

The answers to these questions are extremely important since they would shape your marketing strategy and lay the foundation of how you operate. 

Some companies now look for help in defining their marketing strategy with a qualified digital marketing agency.

Taxation and Accounting

Taxation and accounting are other aspects that one should take care of since drop servicing isn’t a very common type of business.

Depending on your local jurisdiction and that of your clients, you should be able to comply with any taxation and compliance rules as required. As your drop servicing business grows, it becomes necessary that you understand your legalities while also making provisions to avoid any violations.

Finding Vendors

Next comes the aspect that makes drop servicing profitable for you: finding vendors that can provide you with your offered services at a much cheaper rate. You can find them on the same platforms where you look for clients.

All you need to do is go through their work samples, strike a few conversations, and run a profiling operation to identify their potential to serve your clients. 

Both their capabilities and availability will make an impact on your drop servicing business, so make sure to have multiple options.

Also, one should be prepared for delegating the workload to another vendor on an emergency basis in case the person they assigned work originally isn’t able to complete it in time or if the work isn’t up to the mark.  

In our opinion, these aren’t very complicated tasks, but when implemented, the cascading complexities make it tough for people to get along. Therefore, it is advisable to not scale your business rapidly, at least till you get acquainted with handling all of these tasks simultaneously. 

Why Is Drop Servicing An Important Part Of The Gig Economy?

Towards the end, we would like to stress the point that drop servicing is itself an equitable skill that is required to run the gig economy.

The reason is simple: Just like you are willing to look after the back-office operations and marketing, there are other individuals out there that want to focus on their respective skill set.

They may not want to go through the hassle of navigating through the business logistics, and therefore, finding them should be your aim. 

It can be thought of as a form of interdependence with a clear understanding of deliverables on both ends. As the gig economy grows, new platforms and service providers will continue to emerge. So we are quite far from witnessing any saturation, but at the same time, drop servicing will continue to get a competitive business to be in.  

Wrap Up

To start a drop servicing business isn’t exactly rocket science, but at the same time, it requires you to have excellent command over organization skills.

Throughout this blog, we have focused on building a solid infrastructure that can handle the dynamics of quickly evolving workloads.

Take one step at a time and make sure that you grow sustainably if you want to stay around in drop servicing for a longer period.