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What is Drop Servicing ?

Imagine someone wants to buy an apple. You don’t grow apples, but you know someone who does. You purchase the apple for $2 and sell it for $3. Translate this concept to digital services, and you are in the drop servicing business!

Drop servicing allows you to be the connecting bridge between freelancers and clients. Your focus remains on business logistics (marketing, communication, contracts, etc.) while your freelancers single-mindedly work their craft (copywriting, content writing, graphic design, etc.). Many find drop servicing a profitable win-win scenario–if they charge clients correctly and choose their freelancers wisely.

How it is work ?

A drop service works much like subcontracting in the construction industry. You are a middleman.

You market services for sale, and once you have a client, find a skilled freelancer to complete the work. You then sell the completed project at a mark-up. Essentially, your job becomes finding clients, pairing the project with a freelancer, ensuring the freelancer meets a certain quality standard and delivering the final product.

To get started, you need to create an online platform to present your services to potential clients. We recommend using Shopify to build and host your website.

Shopify is an e-commerce service for opening online stores. You can list your service options and prices directly on your website.

Pros and Cons of Drop Servicing

Pros

You don’t need a bunch of capital to start a drop servicing business! Typically, all you need is one basic website, a domain name for a professional email, and a marketer mindset.​

It is a viable and potentially highly profitable business venture. You are in charge of upselling your freelancer’s work and earning the price difference.

You have the potential to work with long-term clients and make money on a regular schedule.

Drop servicing has less competition compared to the dropshipping business.

By outsourcing the work to other people, you free up your time without lessening your profits.

Cons

If a service provider misses deadlines, you have to shoulder the workload (we recommend having back-up freelancers in case anything happens that prevents delivery)

Drop servicing requires strong organization, accountability, and time management skills, as you must enforce target dates.

You have to be an excellent communicator, remaining available for clarification and receptive to questioning.

You’ll need to double-check your freelancer’s work for quality control. It is ultimately your brand reputation on the line.

Is Drop Servicing Legal?

Drop servicing is a widely used legal business model. You’re probably more familiar with terms such as service arbitrage, subcontracting, reselling, broker, or even the relationship between an agent and performer.

There’s nothing illegal about reselling a digital product, just like any other product. You are providing a service by helping clients find the services they need, and freelancers find work, as well as handling all that service involves.

Drop Servicing vs. Dropshipping

You can think of dropshipping like a physical version of a drop service, but they don’t sell services. They sell physical products, such as sweatshirts and laptop stickers. Like drop servicers, drop shippers often work with an entirely online business and don’t actually make anything themselves. They market and marked-up products outsourced to a manufacturer or factory. The finished products are shipped directly from the factory to the consumer.

Thanks to the invention of the internet, drop shippers don’t need to set up a factory, rent warehouses for merchandise, or be a part of the production process at all. Similarly, you don’t need to be an excellent copywriter or expert graphic designer to get into drop servicing. Drop servicers get paid by selling services to clients but let other people complete the work.

Drop servicing may prove more profitable than a dropshipping business as it isn’t reliant on physical product availability. Issues surrounding product quality, such as damaged eye makeup pans or defective lipsticks, are also unlikely to happen, as you can personally review the finalized project before sending it to the client. However, dropshipping is still lucrative and could be a good option for you, depending on what you intend to sell.

Ready to get started on your new business today? At DropXing.com, we offer all of our readers a free downloadable eBook and drop servicing checklist! Learn everything you need to know to prepare for the next step in your career!