Start a drop servicing business

Are you tired of the rat race? Have you toyed with idea of starting a business, but money is tight and you have no idea where to start?

What if I told you that there was a way to sell a service to clients without having to know much about the service, and without actually doing any work to deliver the service? Oh, and it’s fairly simple to scale.

Sounds perfect, doesn’t it? I bet you are already picturing your Ferrari supercar and Gulfstream jet.

Not so fast.

In this guide, we’ll take a deep dive into the good, the bad (and possibly the ugly) of this lucrative business model.

What is drop servicing?

Drop what?!

If you have been living under a rock and have never heard of it, drop servicing is a business model where you offer one or more services to clients but outsource all of the work needed to fulfill that service to a third party.

That third party could be a single freelancer, an ad hoc team of freelancers, an agency or a white label service provider. The choice of whom to partner with is entirely yours.

Your business is essentially the middleman between clients and service providers. This allows you to focus solely on identifying, acquiring and managing both parties.

As a middleman, your profit is the difference between what you charge a client and what you pay your service provider.

Owning a drop servicing business is like having a small army of worker ants toiling tirelessly for you. 24/7.

How to set up a drop servicing business

Can you get started with a service that you know nothing about?

Yes.

Should you build your business around it?

Probably not.

While you don’t have to be an expert, some knowledge and experience is ideal.

Imagine being on a video or voice call with a potential client and not being able to answer even basic questions about the service. You can’t keep them on hold forever while you fumble around on Google, frantically searching for the answer to their query. They would see right through you and leave with a bad first impression of your business.

Identify a suitable service

Some examples of in-demand services are:

• Copywriting
• Graphic design
• Search Engine Optimization (SEO)
• Social Media Management
• Video editing
• Web development

Ask yourself some questions during the discovery process:

• Which skills do I possess?
• What are my hobbies?
• What are my interests?
• What am I passionate about?

Are you still struggling to come up with ideas? Do you need some inspiration? Head over to Fiverr and browse the huge list of services.

The ideal service is one that has enough demand, but is not too competitive. Study your competitors. What do they do well? What do they do poorly? Are there any gaps in the market that your service could fill? Think about what your unique selling proposition is.

Find competent service providers to fulfill the service

You can find freelancers on popular freelance platforms such as Fiverr and Upwork. By now, you should have a good idea of how much you will charge clients. The amount that you pay the service provider should obviously be lower than that figure, otherwise you would make a loss.

Pay close attention to the freelancers’ portfolios, ratings and reviews. Create a shortlist and have a conversation with each prospect to get a feel for whether or not they would be a good fit. You wouldn’t want to choose someone who looked good on paper (a 5-star rating and hundreds of glowing reviews), only to later find out that they are a poor communicator.

Partnering with the right people is crucial as they will be the cornerstone of your business. Choose carefully.

Your reputation depends on it.

Create a website

Having a website increases your credibility and visibility. It is one the first things prospective clients look for to learn about your business. Not having one can have a negative impact on your bottom line.

If your budget cannot cover the cost of paying a web developer to set it up for you, you can create one yourself. It’s not as complicated as it may seem.

You can start with something simple and upgrade to something more elaborate once the business has generated some revenue and you can justify the cost of a developer.

Create social media accounts

The website is the most important component, with social media profiles playing a supporting role. When you are first starting out, you should only create these pages if you can have an adequate amount of content in place at launch. Linking from your website to empty social media pages is not a good look.

Find clients

Let family and friends know about your business. Ask them to help spread the word. Figure out where your ideal clients hang out online. Examples of online communities are Facebook Groups, Reddit and forums. Join these communities and participate. Don’t immediately start advertising your service or spamming your website’s link. People are weary of constantly being sold to.

You have to be subtle.

Provide immense value by answering members’ questions that are related to your industry. Over time, you will come to be viewed as somewhat of an authority and will earn their trust.

Set rates and collect payment

Agree on a price with both parties. In some industries, it is common practice to collect payment upfront from the client. This the ideal scenario because it means that you can use that money to pay the service provider, especially as freelancer platforms require an upfront commitment of funds. If 100% upfront is not possible, you could require a small deposit of, say, 33%.

Collaborate with your service provider

Relay client requests, questions and feedback to your service provider and vice versa. Monitor the quality of the work and, when you are satisfied with the result, send the deliverables to the client.

Provide after-sales support

The client may want revisions. If this is the case, work with your partner to complete the project to the client’s satisfaction. It is a good idea to agree on a maximum number of revisions beforehand.