Drop servicing is a business where you sell various services to clients (rather than physical products), that you simply don’t fulfill yourself.
Instead, you outsource the work to a freelancer or a qualified agency that completes the projects with you only being responsible for selling the service.
You may also hear it referred to as service arbitrage.
Essentially, you are the middleman who markets and sells the services that other people complete, which means that you are able to make money with limited work or involvement!
Thousands of businesses are starting online every single day. This means there’s a growing (and constant) demand for relevant services, including: web design, content, graphic art, marketing, logo creation, branding, etc.
Why not cash in on that ever-growing need and get in on the drop servicing business yourself?
The process itself is quite simple: you start by locating freelancers who are willing to do the work and find out what they charge for their services.
Then, calculate a reasonable mark-up on that price—that’s going to be your profit.
You can make a tidy sum if you aim for services that are not only in-demand, but net a hefty profit, and because your only role is in selling the service, this is an opportunity you could choose to do as a side hustle, rather than a full-time job.
Brainstorming Your Services
Before you jump right in and start a business, you need to brainstorm what you’re going to be marketing and make some decisions.
- Which services will work out best for your particular needs?
- What do you know about already—or can you learn about easily enough to make it worth your while?
Start jotting down ideas:
- Every skill you already possess,
- Every skill you would like to learn,
- Every skill with high market demand,
- Every skill that offers wide pay ranges among freelancers.
Don’t try to filter your answers during the brainstorm session. Just let the ideas flow. Once you have a full page, go back and circle your favorites on the list.
Then you can start researching each of those.
Here are some specific ideas for drop servicing you can use to get your brainstorm started:
- Copywriting (articles, resumes, etc.)
- Website design
- Website set-up
- Blog post writing
- Website speed services
- Lead generation
- Technical support
- Search engine optimization (SEO)
- Video creation
- Video editing
- Guest posting
- App development
- Link Building
- Pinterest account management
- Facebook, Twitter, TikTok, etc. account management
- Copywriting for social media ads (Facebook, Google, etc.)
- General graphic design (infographics, catalogs, etc.)
- Specialized graphic design (branding, logos, marketing, etc.)
You can probably go further from there and think of even more services you might offer, based on your unique knowledge and skill set.
The sky’s the limit with drop servicing: if you can find someone to freelance the work, you can sell the job.
Write down your ideas and run them past your friends and family.
Ask a trusted coworker or someone who’s already in the business of drop servicing. Get as many ideas as you possibly can before you make your final choices.
Now, go to Google Trends and search for the jobs you’re thinking about. See what the demand for each one is—how many postings are there and how popular do they look to you?
Try checking Fiverr to see what drop servicing businesses you can spot. You can also use common sense and ask yourself “Is this service something that a business or individual client would hire someone to do?”
You should think in terms of objective services, as well.
Instead of “I will increase your blog traffic,” say “I will provide trending articles to drive traffic to your blog.”
Make your offer something concrete that can be measured and delivered in full, not something vague and undefined.
How to Find Freelancers
Next, you’re going to need dependable freelancers who can deliver on your promises.
You want a freelancer who is willing to work for X amount—and a client who’s willing to pay even more than that.
But where are these people and why would they want to provide you with their skills when they could just sell directly to the client themselves?
First, most freelancers have little or no marketing skills. They’re not going to be able to find the clients that you will provide to them on their own.
Thus, they’re happy to provide a service even if they know you’re reselling it at a markup.
You should be paying them a fair rate, of course, and they’ll leave the marketing and salesmanship to you, which is where you earn that profit.
Second, you can find freelancers almost anywhere, but there are several reliable networks and marketplaces where you can spot them gathering.
Here are some of the better-known of these:
Before you rely on any freelancer, you should develop a relationship with them and determine whether you can rely on them to get the job done by the deadline.
It’s not going to do you or your client any good to have a freelancer who can’t deliver or can’t make the deadline your client is facing.
One risk you run is that the cheapest prices are from people who have poor writing skills or who will put in the least amount of work.
If you’re selling copywriting, for example, you should be hesitant about working with overseas freelancers who may not be fluent in English. Poor quality work or plagiarized copy will also reflect badly on your business image, resulting in lost income for you.
Try purchasing a small number of “test” services from the freelancers you’re looking at and evaluate their speed and accuracy.
This will also give you a little library you can then resell or use yourself. Be picky when choosing your freelancers: your brand depends on what they produce.
Another problem is that as the freelancers become better at their job and more confident, their prices will tend to increase.
You may be faced with the task of constantly re-evaluating your stable of freelancers, looking for new talent that can do the job without eating into your profit.
One way around this is to look at what is called a white-label agency. This is an agency that offers marketing services aimed at resellers and drop servicing businesses.
These experts may cost more than the bottom-dollar copywriter whose work you must rewrite into proper English, but as the old saying goes: you get what you pay for.
White-label agencies have a solid reputation and a stable of experts on call. Since your business isn’t relying on one or two people, you can easily scale up to meet your needs.
This means you can build a long-lasting relationship with the agency, putting you in the position to streamline your workflow even further (maybe even automating your business model).
Another important aspect of an agency is that they are aware that you’re reselling their services—and they’re totally on board with you doing all the marketing and advertising they don’t feel like dealing with.
If you’re going with a white-label agency, pick one with the experience and knowledge needed for your products.
Try to pick an agency that’s either located within your time zone (for easy communication) or one with 24/7 support.
Look for an agency with a proven track record. Check reviews (both on their website and off site) and look for complaints against them in the Better Business Bureau.
You might even ask for referrals from other companies in your industry.
Make sure your agency has a dedicated project manager to make sure you are never overlooked, delayed, or even forgotten. This manager should be your one point of contact needed for all the details and deadline information necessary to your projects.
They will be the one communicating all the details to the work team.
It may take more time to find the right agency, but you might have more peace of mind knowing that you’ve got a stable of experts who are going to reliably be there for you in the future.
Launching Your Business
Once you have a clearly defined sense of what you’re going to be offering and who you’ll be selling to, you’ll need a way for those clients to find you. For this, you will need a kick-ass website.
There are basically two schools of thought on the topic of website hosts: those who favor Shopify and those who favor WordPress.org.
Both platforms will give you a satisfactory product you can use for your business. But let’s look at what you need vs what each of them can provide.
You will need:
- A homepage, showcasing which services you’re offering
- A reason (or reasons) why the client should choose you over the competition
- Secure payment processing (a payment gateway)
- An email newsletter they can subscribe to, so you can send out offers and “upsell” more expensive services to them later
- Search engine optimization
- Social media marketing (you can get lots of conversions from Facebook, Instagram, or LinkedIn)
Both WordPress and Shopify are easy enough for a beginner to use and can fulfill the above needs for you. Shopify is a dedicated ecommerce platform that can help you build your online store.
WordPress is an open-source platform, so you’ll need to host your own website and install plug-ins like Woocommerce as an ecommerce tool.
Almost a third of all websites today use WordPress.org. But Shopify powers over 600,000 online stores.
To set up a store with Shopify, just create an account, choose a theme, and add your products.
To set up with WordPress.org, you will first need a hosting site like Bluehost. Then choose a theme and some plug-ins like Woocommerce and you’ve got a store.
Some Shopify cons include paying extra transaction fees (0.5% to 2% per transaction) unless you use Shopify’s own payment gateway, having to reformat your whole content if you decide to change the theme, and being more difficult than a drop-and-drag website designer.
Some WordPress cons include pricing (still usually cheaper than Shopify’s fees), the need for some technical knowledge to truly customize your website, and the need to source things like your domain name, web hosting, and security.
Your biggest expense at first is going to be your time. It takes time to create and customize your website.
You can get a good website host for under $10 a month (depending on which plan you go with), then spend the weekend building the site, editing and changing the demo content, and adding your own services and business information (like your Paypal account).
List your products and provide the pricing, a good catchy description of each one, and some good images and you’re in business.
Your landing page is the website your clients start out on when they click that ad, sign up for your webinar, or download a free e-pamphlet.
That page should clearly communicate to the client who your company is and what unique benefits it offers to them (“What’s in it for me?”). This might be the only time you’ll see these clients, so make your landing page stand out and wow them.
Make sure each of your landing pages has an easy-to-use form to collect the client’s information: name and email address at the very least, so you can add them to your email service.
For titles and descriptions on your pages, you want to optimize them from the point of view of your clients who are searching for your services (search engine optimization). This will tell Google that your content is relevant so they will put it above your competition in the search results.
Phrases like “Hire Copywriter for Resume” or “Hire Virtual Assistant to Post on Social Media” will get you higher rankings than vague titles and descriptions. You can also hire an SEO expert, but they can get expensive.
Advertising is another expense, but it’s another way to get more clients visiting your site. You can advertise anywhere you think your clients might hang out, like Facebook or Instagram or even a physical location.
Growing Your Business
No matter what services you end up selling, your life will be far easier if you go with a “come back for more” business model.
This means you’re selling services the clients will need over and over again. Setting up a website is a great way to make income, but you generally only do it once for a particular client.
The same holds for creating a brand or logo.
On the other hand, something like SEO, email copywriting, content writing, video editing, guest posting, WordPress customization, or social media management is a recurring need for your clients.
The trick is to pick those services you know something about. This is for quality control purposes—if you know what good copy or a good blog post looks like, you can build and maintain a quality brand that will keep attracting more clients.
You can also correct any mistakes your freelancers might make before the client sees the finished product. You don’t want slip-shod work slipping through and ruining your good reputation.
You’re going to be setting up what’s known as a “sales funnel,” where you lead the client along, attracting their interest and eventually convincing them they need to buy your product to satisfy their needs.
Your funnel starts with that intriguing landing page where you offer them something they want in return for their name and email address.
This part of the funnel would respond to the awareness stage of the buying process. It’s the answer to their questions about who you are and what you can do for them.
Once your clients are aware of you and what you’re offering, they’ll move to the interest stage, where they evaluate what you have for them and compare it to your competitors’ offerings.
Here’s where your market research comes in handy, allowing you to offer the most popular services at the best prices.
Your goal is to move them into the decision and action stages of the sales funnel, where they actually make a decision to buy and follow through on that.
Once you have your clients on the landing page, you must offer them something of value in order to get their name and email address.
This is where a lead magnet (like an e-book or informative pdf file) comes in handy. Anything you can give them in exchange for their email addresses will work—and the less money you have to spend on that lead magnet, the better. The perfect gift would be something you can create in your spare time that will be valuable to the client.
Once your clients are past the awareness stage and into the interest stage, you need to nurture their relationship.
Use those email addresses to start an email campaign educating them about what your company can do for them that they can’t get anywhere else.
Next, you want to “upsell,” or offer the client something to encourage them to actually purchase your services. A special “members only” sale, a special discount, or a product demo would all work for this.
Now, keep it going. Even if the client doesn’t purchase immediately, keep the lines of communication open.
Keep sending those enticing emails detailing how your services can solve their problems and give them exactly what they need.
For new buyers, your emails should focus on engagement, product explanation, and retention of the client.
Reselling services can help you earn a stable revenue stream by connecting clients who need a service with quality service providers.
This is why drop servicing is fast becoming one of the hottest global trends in business. The start-up cost is far less than with a “brick and mortar” store, and you can get a lot out of just your time and effort.
There’s not a lot of monetary cost involved in setting up such a business, but you do need to be careful and review the market carefully.
Choose services that are in high demand and that you know enough about to be able to sell them profitably.
Work with reliable freelancers, such as those found in a white-label agency, so that your brand doesn’t suffer from undependable or poor-quality service.
Try to avoid outsourcing overseas, as those freelancers often do not speak fluent English or provide the best quality of work.
The pros of drop servicing include a low start-up cost, no need for specialized skills, high ticket sales, and recurring income.
The con is that those freelancers might fail to meet the client’s deadline or turn in substandard work. Customer satisfaction can also be a big issue and you need to make sure your clients are getting top-quality work from the freelancer.
If you’re willing to put in the time and effort required to get started, your drop servicing business can really pay off!
To your success.