Drop Servicing Business Ideas, Guide, And Examples (2023)
Drop servicing is all around us, on both small and large scales. It is a promising and rewarding business concept if everything is done right.
You deliver online services to buyers with a team without doing anything on your own. This new online business perspective is slowly gaining popularity.
Less people are familiar with it and want to get involved. Let’s explore the drop-servicing business ideas and how to get started.
What Is Drop Servicing?
Drop Servicing or White Label is a business model in which an individual or company gets projects from high-value clients and outsources them to freelancers or agencies. I
t works as a medium or link between the customers and service providers.
It is considered a high-profit business in which you don’t need to do anything. Your prime job is to manage clients and freelancers.
Many people don’t want to waste their time and energy finding the right talent. While drop service providers make it easy through their pre-established team.
How Does Drop Servicing Work?
It works similarly to dropshipping but drop servicing is a different business model. For example, you run a freelance digital marketing agency on Fiverr/Upwork freelance platforms.
You get a Search Engine Optimization project from a company at $1500 per month. But instead of doing it on your own, you outsource it to a team member SEO expert for $1000 per month.
It carries a $500 straightforward gain for just managing the project. Many service providers declare their business model to customers but some keep it hidden.
In another example, you buy a software/digital product from a freelancer who again purchased the license from an agency.
Drop servicing is offering third-party liaison between the client and service providers. If you have a physical team at a physical location it would be called an agency.
Drop Servicing Vs Dropshipping
Drop servicing and dropshipping involve a third party as a product resource. You rely on Suppliers or service providers for your work.
Dropshipping is assigned to selling physical products without having an inventory or store.
The supplier stores the products pack them and ship them to the buyers. Dropshipper takes care of this process to complete it smoothly.
While drop servicing is something associated with remote services like search engine optimization, guest posting, content marketing, content writing, etc.
You only need to pick up new clients with a relatively high budget and outsource their work to your team at less cost.
Dropshipping relates to the physical sale of products while drop servicing refers to the services that can be delivered remotely.
Drop servicing is not a too old business concept so it has relatively low competition in the market.
However, finding the right talent for client satisfaction is a real challenge in the saturated freelance market.
Best Drop Servicing Business Ideas/Niches
You can choose from a broad variety of services as per your interest, market demand, and experience in it.
The most profitable drop-servicing business ideas/niches are as below.
- Graphic Designing
- Social Media Management
- Resume Writing
- Content Writing
- Video Editing
- Web Development
- Search Engine Optimization
- Content Marketing
- Guest Posting
Selling a service without any experience may end up in a mess. You must be well aware of project cost estimation, services required, quality, and delivery.
How To Start A Drop Servicing Business?
In order to start and run drop servicing businesses successfully, follow the below guide.
Choose Your Drop Servicing Niche
There are several drop-servicing business niches to get started. You need to pick the best which is closest to your experience and understanding.
Keep the below things in mind while choosing your niche.
- Choose the ideas close to your experience and knowledge
- The easy things to execute with less effort
- Most in-demand things in the market
- Ideas that carry the best profit margin
The selection of a niche is dependent upon your interest and will to work. If you pick a random idea without any background it may be disastrous sometimes.
Think so many times before making the decision, because it is the foundation of your business.
Establish Your Team
Team selection is crucial for providing quality services. This will increase the number of repeat buyers and long-term business relations.
Find the best talent from available places and screen out the most suitable ones. Follow our remote hiring guide to find the best talent for your team fellows.
Make a check off the list and proceed according to your set rules. Sometimes, you need to train your team members to fulfill the client’s expectations.
Their educational background, skills, experience, and communication skills really matter. Always pick freelancers from the same time zone for successful project completion. You need to deliver projects within the given delivery timeline.
Freelance websites like Fiverr, Upwork, People Per Hour, Guru, and Freelancer are good to search for talent in your niche. However, social media and LinkedIn are also good options for this purpose.
Work On Your Online Presence
Clients with higher budgets look for individuals or agencies with strong portfolios and online presence.
You need to build your business website and social media presence. WordPress, Shopify, and Wix are the best to build a business website.
Add a unique logo of your business, portfolio, services, pricing plans, and concerning information to it.
Woocommerce is the best source to list services and accept online payments. Your online presence will increase client trust.
Market Your Business
A compelling business marketing strategy is a must to get more clients and retain older ones. You must adopt the following methods to spread your business word.
Search Engine Marketing
SEM or search engine marketing is done through paid ads at the top of a search engine search results page.
You need to find keywords related to your business niche and select with a reasonable CPC ratio. You will be charged every time user clicks on your ads.
It is the fastest way to get clients and leads for your business. Learn best SEM practices from Coursera, and get started on your own. You may hire a search engine marketing expert from Fiverr for your work.
Social Media Marketing
Social media platforms have billions of active users with a depth user database. They collect information according to user interest, devices, behavior, and activity. It is easy to find your audience and increase brand awareness.
You can place paid ads to bring traffic to your business website, generate leads, sign-ups, and more.
An effective social media marketing strategy can give your extraordinary results through organic work.
Facebook, Instagram, Pinterest, and Twitter are the most preferred social media platforms for marketers.
Create your own business blog, YouTube channel, or Email newsletter to educate your audience. Use a call to action in your content to convert users into leads and potential customers.
You can also use other blogs/channels similar to your business niche with good traffic. Get featured posts, paid campaigns, and recommendation videos for your business by outreaching them.
Give referral codes, discount offers to your existing clients for recommendation to other people. It is one of the cost-effective methods to promote your business.
Start Selling And Make Profits
Your first sale may be the hardest thing to come. Improve your communication skills and methods. Keep learning the dos and don’ts of drop service from your competitors.
Understand the client requirements, price adjustments, and delivery timeline. Most importantly never give up as there might be several challenges in the beginning.
Pros Of Drop Servicing
There are several advantages of the drop servicing business in comparison with dropshipping. Here are a few of them.
- You can start a drop service business on a relatively low budget and experience.
- It is less risky and you don’t need to worry about refunds. Although clients ask for multiple revisions sometimes.
- Enough ideas and niches to choose from.
- More skilled people are available in all niches.
- Freelance service providers get many jobs directly from drop service providers.
- No freelance fees or service charges for both party.
- Buyers don’t need to spend hours finding, interviewing, and monitoring the freelancers.
- It saves time and effort for all involved.
Cons Of Drop Servicing
It comes with several challenges and risks. Here are some of them.
- Hard to find experienced and highly skilled individuals on a comparative budget.
- Challenging to meet client requirements and deadlines.
- Payment protection is not as effective in comparison with freelance websites.
Drop servicing is not everyone’s business. Continuous hard work, planning, execution, and willingness are needed to become successful. It has massive opportunities for growth and earnings.
Follow the ideas from others already in business and shape up yours accordingly. You must have exceptional communication and management skills to become prosperous in this business.
Drop Servicing FAQs
Is Drop Servicing Profitable?
You may earn more by providing services like SEO, content writing, and social media management on monthly basis. You need to research your competitor’s pricing plans and offer accordingly.
The price must be 2 or 3 times higher than the project cost including marketing expenses. Like you have paid a social media manager $100 this month for managing a Facebook business page. The pricing for clients should be between $250 to $300. Keep the pricing as low as possible at the start, once your reputation expands raise your pricing.
Is Drop Servicing Worth It?
Drop servicing can be a million-dollar idea if executed properly. It is surely worth it if everything is well-planned and implemented.
This business concept is becoming popular as the best startup idea for many. You can earn well and excel in it without a heavy investment.
Is Drop Servicing Legal?
Drop servicing is a legal business concept and has no restrictions as per law. You need to file your tax returns in terms of VAT and sales tax. Get your business registered to avoid any unnecessary trouble from your state laws.
How Much Does It Cost To Start A Drop Servicing Business?
You can start a drop-servicing business with a low budget. Initial costs include
Website Creation Expense:
The cost of website creation covers web hosting, domain name, and website developer expenses. You can use platforms like WordPress to easily design the website with drag-and-drop page builders.
It may depend upon your budget starting from $100 to $3000. You may hire a freelancer on freelance platforms for this task.
Marketing expenses cover PPC, SEM, SEO, and social media campaign fees paid to the marketers and platforms.
Office/house rent, electricity bills, stationary prices, and internet subscriptions are counted as miscellaneous costs.
These payments include the charges of freelancers and agencies for their services.
How To Start Drop Servicing For Free?
Drop servicing is a low-budget business model where you can establish yourself with fewer expenses. Use WordPress and Wix to create your business website for free without any coding experience.
You can start offering your services from social media platforms through paid and organic campaigns.
How To Create A Drop Servicing Website?
An attractive and well-designed business website with complete payment integration is required for drop servicing.
You can hire a freelancer from Fiverr and Upwork freelance marketplace to get your job done. There are several people who use social media platforms to find clients for web development. Search for such profiles/pages and go through web development groups and post your request there.
WordPress is a cost-effective way to create a website without any coding background. You need to follow these tips for creating your website.
1. Get a unique domain name for your business
2. Purchase a web hosting
3. Purchase a well-designed theme from Theme Forest
4. Install WordPress in your hosting
5. Upload your premium theme and start customization with drag-and-drop website building tools.
Is Drop Servicing Better Than Dropshipping?
Drop servicing is a more promising business model in comparison with dropshipping. The market is not yet saturated and there are many opportunities for beginners as well.
You don’t have to bother about the refunds and returns like in dropshipping. Drop servicing has more possibilities for scalability and growth.