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Cast your mind back to 2006; a new business model was emerging out of China, a method of product fulfillment. The term was coined “Dropshipping.”
Fast forward to 2020, a new ‘drop’ model has appeared, this time utilizing the gig economy, and it was called “Drop Servicing.” So, what is drop servicing? Here’s everything you need to know to get started!
Similar to dropshipping, the drop servicing business is the act of selling others’ services instead of selling physical goods. In the grand scheme of things, it’s not that different than saying running an agency except leveraging freelancers instead of having employees.
It’s a new trending business model, and it’s going to be a big thing in the next couple of years.
So, are you considering starting an online side-hustle that has the potential to replace your 9-5 job? Drop servicing can be a great help and fit! Let’s dive in…
What Is Drop Servicing
Drop servicing is an online business model whereby you sell other people’s services on your website without providing them yourself.
Instead, you hire a third party freelancer to get the job done for you. You then send it to your client as though it was done by you.
Drop servicing is like the new “baby born” of the dropshipping business model! Instead of selling physical goods, you would be selling digital services.
Unlike starting a brick and mortar store, the drop servicing is a lucrative business model that doesn’t require much to get started, and also has a huge potential financial gain.
So, what does the service supply chain look like? Here it is in action:
1️⃣ A customer places an order for a service on EcomDimes.com and receives an email confirmation of the process. Let’s say the total came to $49.99!
EcomDimes receives the same email confirmation as well as Customer A’s payment.
This is usually made possible by Shopify as it sends out the confirmation to both buyer and seller.
2️⃣ EcomDimes sends the order to a freelancer who will process the order. EcomDimes will then be charged for the purchase.
For this example, let’s say the freelancer charges $9.99 on Fiverr for each logo design.
The drop servicing business owner (EcomDimes) will pay that amount, and the difference is the profit the retailer will make. In my example, EcomDimes will net a profit of $40.00.
3️⃣ The designer will then finalize the order and have it ready for the reseller.
Although the designer delivers the service, the order will be addressed from EcomDimes.com, and the EcomDimes name will appear on the invoice.
4️⃣ The designer will deliver the final design to the drop servicing website (middle-man).
5️⃣ The customer receives the order from EcomDimes.com and enjoys the logo.
You can see how the drop servicing website owner and the freelancer (designer) both have to work together flawlessly.
That’s the service supply chain in action. When done right, it’s a smooth process that results in minimal work for everyone involved.
What Can You Drop Service
You can drop service literally anything. However, you should aim to sell services that you have knowledge about!
Having enough information about the service will allow you to look authoritative in your clients’ eyes. It’s a big sign that you know what you’re talking about.
Especially when selling complicated services that has a monthly subscription, like SEO for example.
People will usually have a truckload of questions that they will need to get answered and fulfilled before consider buying from you.
Here are some rules (based on my experience) that you need to stick to when picking your drop servicing niche:
🔺 Your service should have a relatively low compeition, so you won’t be competing with big guys.
🔺 It should have a positive trend and a demand that you can supply. Selling a service that there’s no need for it on the internet is just useless, right?
🔺 The service should have a huge potential financial gain. I mean here the profit margins that you can pocket after paying the freelancer for the service.
🔺 You should also aim for selling services that have complementary services that can be sold as an up-sell or cross-sell.
🔺 Finally, selling services with a monthly recurring revenue is vital to your business success! You only pay once to acquire the client, and they keep paying you for months, or even years to come!
Where Can You Find Freelancers And Services To Flip
There are endless number of freelancers who are working and offering their services online.
Hundreds if not thousands of websites are created on a daily basis, and behind all of those well-looking websites are human who are responsible for design, content hosting, marketing and more!
With everything that the internet is offering today, finding freelancers has become a seamless process because you already have access to the world.
Although finding online freelancers is easy, you should be picky with the ones you choose to work with!
A bad freelancer has the ability to ruin your whole business and reputation because people don’t know them or don’t know your business stucture at all.
They know you, and only you! You’re the only one responsible for meeting their expectations and deliverying what you promise with on your services page.
With that being said, freelancing directories and marketplaces are your way to go.
There’s a bunch of platforms that you can leverage to find verified freelancers. Here are some of those networks:
Pro Tips: Try to pick verified freelancers with good reviews and reputation. Go check what other people are talking about them and what can they add to your business.
Also, do not ever rely on one freelancer. Freelancers are not your employees, they might be handling other projects as well. So, they won’t be able to deliver the work on time, sometimes.
Pick a set of freelancers that you can trust for a maximum capacity for your business and faster deliveries.
If you want more drop servicing tips, I recommend you check out my other article “11 Most Crucial Drop Servicing Tips” from here.
I’ve also written an article on how to find drop servicing clients, that discusses 7 free and paid proven ways. You can check it by clicking here.
How To Get Started With Drop Servicing
Getting your drop servicing journey started requires a few simple steps:
✔️ Pick a profitable niche
✔️ Find freelancers and services
✔️ Start building your website
✔️ Promote your busienss
If you’re interested in learning how to start a drop servicing business, here are some helpful resources that can put your feet into the water and help you get started.
In the below articles, I go in-depth into the step-by-step process for starting a drop servicing business on your desired platforms:
How Much Does Drop Servicing Cost
Although the drop servicing business doesn’t require as much as a brick and mortar business, it requires a tiny investment for building your website and running a few test orders.
|Shopify||$29/Month||1 Year – $26/M|
2 Years – $23.25/M
3 Years – $21.75/M
|WordPress||$68/Year||2 Years – $89.49|
3 Years – $105.35
|Clickfunnels||$97/Month||Awesome books, trainings and courses.|
Your real cost is actually your website, and it varies depending on your investment period (if you plan to pay monthly or yearly), and on the platform that you decide to go with.
If you plan to start a Shopify drop servicing, for example, it will cost you a monthly subscription for Shopify.
A Premium Shopify theme is recommended so you can have a highly converting drop servicing site. Learn how to install a Shopify theme here.
Frankly, if you’re just starting out, you need no more than the basic package, which is for $29/month. Paying for a year or two will only reduce your cost per month.
Having a self-hosted website on WordPress, on the other hand, will cost you differently depending on the hosting provider you end up going with.
I have recently published an article for the best 3 self-hosting solutions, and HostGator tends to be the cheapest and most reliable web hosting around.
Starting a drop servicing website on WordPress using HostGator is the cheapest option, but it requires a little bit more work and technical background.
HostGator allows you to start your drop servicing business from as low as $2.75/month if you end up going with the 3-year plan.
Finally, Clickfunnels is a superb solution not just for drop servicing, but for all sorts of business (online & offline).
Clickfunnels is not the cheapest option there, but the community and the things that you are getting are just priceless!
Russell Brunson (Owner and founder of Clickfunnels) was able to grow his company by over 4300%, and he’s more than willing to share his same techniques with you.
He has recently published the Dotcom Secrets Book 2.0 that goes through the exact process he used to grow his business using funnels, and reveals 28 virtually unknown secrets to grow any company online using funnels!
Clickfunnels basically has two beginner-packages, one for $97/month and the platinum one, for $297/month.
A sale funnel is way better than a static website, and I’ve talked about this in my recent blog post.
The cool thing about Clickfunnels is that they have pre-built funnels in all niches and industries.
With a matter of minutes and some editing, you can import and publish a landing page template with ease.
If you’re a little bit intimidated and don’t know how to start with sale funnels, Russell Brunson has announced a challenge called One Funnel Away. (Click to learn more about OFA Challenge.)
It’s a lucrative opportunity to get involved in and not to waste a second of this guy’s speech.
The One Funnel Away Challenge is a 30-day extensive life training program that trains people on how to use and how to create a funnel for their business.
Click the image below to learn more about the OFA Challenge
Drop Servicing Pros
✔️ High profitability
The drop servicing business model is a fruitful business if done right. It has the potential to not just replace your sucky job, but to make you a 6-figure a year!
It all depends on your niche, but typically, you can charge
✔️ Low-risk business
There’s no risk involved in a drop servicing business. You’re only paying in advance for a domain, website and some test orders.
Unlike a brick and mortar business, which you need to buy or rent a place and fill it with products that you won’t sell.
✔️ Low overhead required
As for the costs of starting a drop servicing business, you would simply need to get a domain name that represent your business, build a website and start running some test orders.
This is relatively low if compared to starting a traiditional retail store.
✔️ Monthly recurring revenue
Some services that require monthly management and constant efforts, like lead generation, social media management and SEO, would allow you to make a monthly recurring revenue.
They need to keep paying you so you can keep growing and improving their business. Because no one says no to more business and revenue.
✔️ High customer lifetime value
Some services require you to pay one for acquiring the lead or client, and once they become a customer, they will be more likely to purchase your service month after month, even for years to come.
If you’re able to deliver what you promise with and bring them the type of results they’re looking forward to getting, your customer lifetime value and retention would be very high!
✔️ It’s a simple and straighfoward business
It’s not as hard as it may seem to be. You simply find people who are offering specific services online, find people who need the exact service, and just connect them both together by being the middle man.
There’s nothing complicated about this business model, it’s super easy and straightforward.
Drop Servicing Cons
⚠️ Some services have high competition
Some services, like SEO (Search Engine Optimization), have a high competition, which means your cost per acquisition would be higher than other services.
It all depends on your niche servicing market research and competition assessment.
⚠️ You need enough knowledge and info about the service
Although you can sell any type of service online, you need to understand how does it exactly work.
Selling a particular service doesn’t require you to master it, but to understand the basics about it so you can answer any question you’d be asked from your customers.
You need to look as much professional and legit as possible and let them feel that you know what you’re talking about.
⚠️ You need to run a test order and test the service provider
Get in the mood and mentality of starting a real business, and be willing to invest a little cash to build something awesome ahead!
You don’t need a lot of overhead to get started. However, you should be prepared to take it a step further and spend some money on purchasing test orders from your picked freelancers.
That’s important for two reasons; measure the quality of their work and their communication as well.
⚠️ You need to manage delivery time and meet the deadline
Meeting customers’ expectation is what should you be going after and aiming for in your drop servicing business.
Because more satisfaction leads to loyalty, and loyalty means recurring revenue and high customer lifetime value…
Having one freelancer to do the work is a recipe of failure, because freelancers are not actually your employees.
They may be handling multiple projects at a time, and chances are they wouldn’t be able to meet the deadline of the job.
Therefore, having a back up of multiple freelancers would increase your capacity of work and help you get this done faster.
Drop servicing frequently asked questions (FAQ)
Yes! Drop servicing is a very legit business model. However, you need to look legit in your customers’ eyes by having an inviting website and dealing with reliable and professional freelancers.
Absolutely! Drop servicing is a legal business model and there’s nothing that makes it unlawful or illegal. The fact is, you’d be shocked how willing are freelancers to do business with you as a reseller and let you sell their services. They are getting paid anyways!
Indeed! Drop servicing can be a fruitful business and let you reap the rewards of being your own boss by working from home. The potential that I’m talking about here is a 6-figure a year or even more!
The drop servicing is a relatively brand new business model. It definitely works and it’s going to be a big thing in the near future! Thousands of websites are being created day after day, so more service providers and freelancers would be needed to handle content, designs, marketing and more.
It depends on your knowledge, experience and willingness of investing. You basically have three options; Shopify, Clickfunnels and using a self-hosted website on WordPress with HostGator.
It depends on your niche and payment structure. If you decide to sell services with monthly recurring revenue, making a 6-figure a year is doable!
Is There A Drop Servicing Course
Since drop servicing is a brand new business model, there’s still no comprhensive drop servicing blueprint on the whole web as there’s no enough information and data about it yet.
However, there are some cheap courses that can help you get started with the basics of drop servicing.
You can check out my picks for the 5 best drop servicing courses from here.
If you’re a complete beginners looking foward to learning the basics of how to start a drop servicing business using Shopify, I already have a FREE dropshipping course that can be a great fit for you.
Drop servicing and dropshipping have the same concept and approaches in common.
This is an 8-video training series, and it could be an excellent option for you to get started and dip your toe in the industry.
Drop servicing is a great business model for beginners and experts alike!
With only a few resources and a tiny investment, you could have a drop servicing website that you’re proud to own and promote!
Being said, in this article, I’ve explained what exactly drop servicing is and how can you get started with this trending business model fast.
Get into this, test its water, and see if it works for you. There are tons of exclusive business opportunities online, you’ve just got to check what fits you best.
What do you like most about the drop servicing business model? Are you considering starting your own online storefront? Let me help you 🙂
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