The drop servicing business model, nowadays, is probably the most promising way to start an online business, and could prove to be quite profitable too if you do it right. It is a business model that is fully capable of taking you from financially-stressed to financially-independent within a short span of time.

What is Drop Servicing?

The drop servicing business model is a slight variation of the drop shipping model. The major difference being the fact that in you are (re)selling service instead of products. However, these model are very similar but have some key differences.

In a drop servicing business, you find a client who needs a service, or some job done. Let’s say the client wants someone to create a website. You as a drop servicer will have to execute your snazzy sales skills to convince the client that you can get the job done and come to an agreement regarding the charges and the terms of payment.

After you close the deal and get the order  you’ll forward the order to a web designer for a sum lower than what was agreed with the client. The designer will create the website in your name and then you will deliver (make accessible) the website to the client. The client will pay directly to you and you’ll reimburse the web designer. The difference between what the client paid, and what you paid to the web designer, is your earning in this case.

 

5 Steps to Start an Online Drop Servicing Business

Starting an online drop servicing business isn’t as complicated as it seems. If you follow these five steps you are going to make considerable progress on running a successful online business.

  1. Look for What’s in Demand

As a first step to starting an online drop servicing business, you need to do some research around the kind of services that are in demand. There are tons of services out there but some have extremely saturated markets, and don’t hold great potential in the long run.

So, make sure you check at least google trends, freelancer.com and fiverr. Talk to people and do as much research before settling on a service to drop.

  1. Choose a Service

Once you’ve gathered enough information around what services are in demand. The next logical step is to choose a service that you feel you can drop successfully. There are dozens of in-demand services out there like website design, development, logo design, social media management, market research, accounting, writing business plans, SEO and so on that you could offer to your clients.

Furthermore, you should ensure that you understand the service that you are considering. You don’t want to be drop servicing something that you just don’t seem to understand. Secondly, you need to drop service something that you can find reliable freelancers for, because if you book orders and don’t have people who can fulfil them then you are going to land in hot waters.

  1. Find Service Providers or Freelancers

As mentioned previously, it makes no sense drop servicing something that you can’t find who could do the services for you. Make sure you choose a service that has business or people who are willing to work for you when you book an order. You may need to arrange the terms even bevor you start searching for the first clients

The simplest way is to find freelancers who can get the job done. But where do you find them? Well, some of the best places to start are the well-known freelancing sites such as Upwork, Freelancer, and Fiverr. You can also approach your friends and family too, or if you are well-connected professionally then LinkedIn can provide some amazing people who will be willing to work with you. Probably, the best strategy is to approach local service providers that offer quality services, have capacity to serve extra clients and are not present (strongly) on the net.

  1. Set up a Service Delivery System

One of the bigger challenges of drop servicing is the fact that you’re not the one actually doing the work, hence you need to be great at managing deadlines along with the quality of the work to make sure your clients keep coming back for more.

So it is extremely crucial that you set up a rigorous service delivery system through which you can ensure that services are delivered on time, and as required by the customers. Remember, that ultimately you are responsible for the quality and timely delivery of your services.

  1. Create a Sales Funnel

A service delivery system is a must, but perhaps what is even more important is having a good sales funnel. You need to be great at sales. To achieve that you should be able to generate leads, follow up on them, and convert them into actual orders.

You need to segregate your marketing and sales activities by using the often-used sales funnel (awareness, consideration, purchase). You need to execute certain activities that raise awareness among people about your services, other activities should focus on reeling them in and turning them into warmer leads, and finally you need to convert leads into actual orders.

 

The Benefits of Drop Servicing

Drop servicing business has several undeniable merits. We’ll try to list the most valuable ones below.

  • No Shipping Headaches – Since the business does not deal with products at all, and it is instead a service that you are dropping, there is no shipping to take care of. All you have to do is to receive the order, forward it to the freelancer, and then update the client after the work is completed.
  • Increased Flexibility – As a drop servicing business owner, you’ll have quite a lot of time to yourself since there is not a great a deal of work that you’ll have to do except generating sales, and managing work flow.
  • Practically No Overheads – There are no overheads especially if you’re only starting out. You don’t need an office, any equipment or employees. All you need is some savvy communication skills and a laptop with an internet connection.
  • You could reach customers online and offline too

 

The Disadvantages of Drop Servicing

As someone who is considering entering into the world of drop servicing, it is essential that you also learn about the limitations of this model.

  • Service Delivery Issues – One of the biggest challenges is your inability to have control over the time of delivery. Most times your clients will set the date of delivery and you’ll have little control. So, you’ll have to push your freelancers to make sure that you complete the tasks on time.
  • Less possibilities to automate – The service is usually custom and different for every customer so to have to negotiate the order. The quality assurance is also a manual task.
  • Reliance on Others – One major flaw in this business model is the fact that you are solely reliant on the service provider/freelancer to do the job right, and if they fail to deliver on time or delivers poor quality service then your business is bound to take a hit as a result.

 

Conclusion

It is clear that setting up a drop servicing business isn’t as difficult as you might have though . It is a relatively easy business model to set up, and can help you bring in a handsome stream of income if you do it the right way.

You need to have the confidence of your service providers, and need to showcase some outstanding managerial and sales skills to get the ball going. And, surely you’ll develop a business that sustains itself in the coming months.

Starting a Drop Servicing Business Online

James R. Parker

James is a young and passionate online business specialist dedicated to help the wannabe online entrepreneurs who want to start their first online venture.