The Newest Online Business Idea! Understanding Drop Servicing!
Dropshipping has been around for a few years now. Throughout the last few years i've seen and personally experienced many ups and downs in this line of business models.
As of late, there is a new kind of business model in Shopify that is recently getting popular.
What if I tell you that there is a business model that is really similar to dropshipping, but you will not sell physical products?
Enter Drop Servicing!
And no, this is not dropshipping – but they are like twins.
What is Drop Servicing?
Drop servicing is a business model where you sell services instead of physical products.
Now, you might be thinking, “I don’t know of any service that I could do”.
Oh don't worry, you are not the one who will do the service. You have to find people who will do it for you. Your job is to market these services, and earn a profit from the orders.
Well, you are not going to be doing the service. You are just selling it.
This is very much similar to dropshipping, the only difference is that dropshipping you are selling a physical product, but for drop servicing you are selling a service.
And no, this is not some kind of revolutionary business model.
I'll say that they worked parallel with each other – with some minor differences in-between.
As you know, the internet cannot happen without people. A photo or video will not magically create itself. A website will not launch itself. For every thing you see on a website, from vides to blog content to SEO techniques, someone did it.
Today, I will show you how drop servicing works, and provide you the blueprint you need to get started.
Drop servicing is simply service arbitrage. What this means that you find clients who need a service, but these clients do not know that you are hiring, or outsourcing, the services they asked you to do.
In the physical world, think of it along the lines like sub-contracting. In a big scale project, the main customer are those who will show the contractors the blueprint of a mega shopping mall that they want, and they will speak to you about the cost of the project plus the timelines.
The thing is, these contractors do not have their own carpenters or architects. So they sub-contract this deal, but they are still legally answerable to the main customer should anything happen, like a delay.
So now back to the online world. In the online world, you can find clients who need graphic art, or probably clients who need blog content, or maybe even clients who wants to produce a software.
Here's how it works.
You look for clients – or even better clients come and look for you, they purchase your service and you purchase it for a smaller cost.
Sounds pretty similar right?
Now, before you do this, you have to know the price offered by the seller, or the freelancer beforehand. This way, you can mark-up on that price. The price difference between what you charged your client and what the freelancer is asking for is your profit.
Sounds cool! What can I Drop Service?
Well, you can drop service anything. Yes! Literally anything! But here's a catch! You should not drop service something that you do not understand, or you will fail.
This is pretty much common sense, you should not sell services if you have absolutely no clue as to what those services really are.
You do not need to be an expert or a guru about a particular service, but you need to understand how it works.
For a start, you can easily sell logo or abstract designs, then you hire designers. This should be easy to do, as you do not need to be an designer yourself to understand high-quality designs from bad ones.
Here are some examples of services that you can sell:
Funnel Building & Landing Page Building
The list is really endless. It is you who will put a limitation to what you can offer.
As with any other business, you'll need to do your research properly on what is in demand. As this is a relatively new concept at the time of writing this, it might be a little difficult to find resources that can show you data about this. In this case, your best option is to use Google Trend.
I would recommend to stick to one niche because then it is easier to advertise yourself in front of your target audience.
Great! So What do I need to get started?
First and foremost, you need is a platform. The most ideal in drop servicing is a website. While you can use social media to market your services, very few people on social media will trust you if you do not have a website.
The best web builder you can use are the same platforms that dropshippers use, like Shopify.
In Shopify, you will get the following:
Payment processing system
Social media integration
Yeah I understand, how do we associate Shopify with digital services since it is built for physical products?
That is true. Even if Shopify was built for physical products, all you need to do is to replace the product pages with services. In the platform, you have areas where you can type the service details, price, and you can also add other variants.
Each Shopify store already has a built-in Add to Cart button. What this means is that your customers can now order directly from their devices.
The last thing you need to get started is a marketing strategy. The hardest part here in drop servicing is marketing. Because in drop servicing, marketing is pretty much everything in the entire business.
So where do I source for freelancers?
You'll definitely need to source for a marketplace where freelancers market themselves for their gig services.
Examples of these marketplaces where you can register and hire freelancers are:
People Per Hour
I personally used Fiverr. There're plenty of good freelancers out there and their command level of English is pretty good. Still, before you hire someone, do your due diligence and take the time to review their profile, feedback rating, length of years in the industry, and how much they are charging.
One thing to take note of is this. If you intend to use other marketplace, you should also check how much the freelance market place charges the freelancers, as this has an impact with how they price their goods. Fiverr charges 20% of the cost from the freelancer. If a freelancer charges $100 for the service, he will only get $80.
Based on my experience, the freelancers here will unlikely to charge you $100, but at least $120, so they can cover this fee. Fiverr also charges clients around a small admin fee of $1 to $2 per project. This is on top of the 20% fee that the freelancer pays.
These are some of the risks and money that you need to spent before you can start this business. You need to take into account the time it takes to complete the project, the price, and the quality of the service, and the fees.
But c'mon, it is hell less riskier than opening a traditional business like a restaurant.
What are the limitations of Drop Servicing?
The main limitation of this business is actually your own expertise. While you can price the services as much as you want, you cannot sell all sorts of services.
And of course, you cannot offer services that eventually would result in criminality.
Another limitation is your level of control. Not all freelancers can deliver at the time you expect them to, and you cannot do anything about it. Most of these are just part-timers. If a freelancer will take three days to write an article, you need to add at least two days to that.
Because you have to prepare for some unknown emergencies, like if the freelancer did a bad job and you need to ask for a revision. Or worse, if you need to look for a new freelancer.
I would highly recommend you to try the freelancer services for yourself first before embarking on this business. The client does not know that you are outsourcing, and you cannot make excuses if you fail to deliver.
The only difference between dropshipping and drop servicing is that you will not sell physical products, so you do not need a supplier. However, the main skill that you need the most is marketing, and using social media to your advantage as you sell your services.
You will find it really difficult to make this business work if you do not have marketing skills. In fact, it's near impossible. To begin with, why would a client order from you if they can easily go to Fiverr? It is all in the packaging. You can charge more if you know how to market your services.
Drop servicing may be the next big thing. It is easy to implement, and it is easy to earn. The thing with drop servicing is that no physical goods are involved.
The best thing about drop servicing as compared to dropshipping is you are not going to lose money on shipping costs, and you will not have a lot of customer complaints for bad products because each completed service will pass through you.