If you are not sure whether to dropship or not, then maybe you should consider an alternative.
What if I told you that there is a business model that is really similar to dropshipping, but you don't have to sell physical products?
The new trend in the online business world today is called drop servicing. No, this is not dropshipping, but they are similar.
Drop servicing is a business model where you sell services. However, 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.
Today, I will show you how drop servicing works, and provide you the blueprint you need to get started.
What Is Drop Servicing?
Drop servicing is also called service arbitrage.
What does this mean?
You find clients who need a service, but these clients don't know that you are hiring, or outsourcing, the services they asked you to do.
In the real world, it is similar to sub-contracting. Sometimes, there are contractors who will show you the blueprint of a house you want, and they will speak to you about the cost of the project plus the timelines.
The thing is, these contractors don't have their own carpenters or architects. They sub-contract this deal, but they still get paid for the job and someone else does it.
In the online world, you can find clients who need graphic art, or clients who need blog content for example.
Once these clients order from you, you place the order to someone you know who does that job. These people are called freelancers, and you can find them in freelance market websites.
Now, before you do this, you have to know the price of the seller, or the freelancer. 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.
What Can You Drop Service?
You can drop service anything. However, you shouldn't drop service something that you don't understand, or you will fail.
For example, you should not sell SEO or PBN services if you have don't know what those services really are. You don't need to be an expert about a particular service, but you need to understand how it works.
For example, you can easily sell blog posts, then hire writers. This should be easy to do, as you do not need to be an editor yourself to know high-quality content from bad ones.
Here are some examples of services that you can sell:
- Web building
- Guest posts
- Blog posts
- Social media management
- Graphic arts
- Ad copywriting
- Video creation or animation
- Video editing
There is plenty of other stuff you could drop service, the possibilities are endless.
You need to study what service is in demand. Since this is a new concept, you won't find resources that can show you data about this. In this case, your best option is to use Google Trends.
Take a look at the screenshot below. We searched for the term “freelance writer” for the last five years worldwide. We can see that there is a strong demand for this.
With this data, you know that there are people looking for services of freelance writers. Now, the next step is to find a good one whose price is affordable.
The next step is to market that service.
What You Need To Get Started
The first thing you need to get started is a list of services, and a list of service providers. As shown on the example earlier, we know that there is a demand for, a freelance writer globally.
I would recommend just choosing one service to promote out of the list you have created.
This way you won't get overwhelmed when starting.
For example, If wanted to resell writing services then find a writer who can meet my standards. This step is critical.
Then I would spend money to test the quality of work of several writers.
Where would I find writers? More on that soon.
The next thing you need is a platform. The most ideal for drop servicing is an online website or store. 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.
Starting A Drop Service Store
The best ecommerce store platform you can use is the same platform that drop shippers use. We use Shopify since it's rated as the best in the industry.
What is Shopify? It is an online e-commerce tool that allows you to create a store.
You can get your Shopify Trial here
In that store, you will get the following:
- Payment processing system
- Marketing tools
- Social media integration
- Email subscription
- Ans much more
Even if Shopify was built for physical products, all you need to do is replace the product pages with services. On Shopify, 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. Looking for a service provider and building a website are the first steps to getting started.
Where Can You Find Drop Services?
The best place to find drop service gigs is a freelance marketplace. On these market places, freelancers post their profiles for clients to see. On the other hand, you can also post a job and then freelancers will bid.
These are some sites where you can find cheap services to resell on your store.
- People Per Hour
- HubStaff Talent
Before you hire someone for your test, take the time to review their profile, feedback rating, length of years in the industry, and how much they are charging.
From there, you can create a list of these services, and pick the top three that you like. Order their service, and see who performs the best.
You should also take the time to study the rules of the freelance marketplace. Some don't offer a payment system, which means you can get burned, and you have no way of getting a refund if the service provider did a bad job,
Whatever one you use should Resolution Policy where you can file a complaint if the service provided was bad. In this case, the company will refund you your money, and then you can use that money to hire another one.
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.
In that case, the service providers here will certainly not charge you $100, but at least $120, so they can cover this fee. Fiverr also charges clients around $1 to $2 per project. This is on top of the 20% fee that the freelancer pays.
Despite that, I going to recommend Fiverr as the best place to get started
No matter what website you choose, you should always spend money before you get into the drop service 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.
What Are The limitations of Drop Servicing?
The main limitation of this business is your own expertise. While you can price the services as much as you want, you can't just sell any services.
For example, you can't offer a medical transcription service if you don't know what it is. Same thing with data entry, lead generation, and other services where you have no background.
Another limitation is your level of control. Not all freelancers can deliver at the time you expect them to, and you can't do anything about it if they don't meet deadlines.
Some of these guys 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 if they are late on the deadline, 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.
Again, you shouldn't start a this business model if you are not willing to try the service provider yourself. The client doesn't not know that you are outsourcing, and you can't make excuses if you fail to deliver.
How Much Will It Cost To do Drop Servicing?
The cost really varies, but the smallest you should prepare for is $29 per month for your Shopify store. The other cost is going to be your domain name, which can be free for the first year if can find a promotion online.
The other cost, which will vary, is the trial for your freelancers. If you need a writer, and you can find them for $30 per article on Fiverr, you might need to spend $90 for three freelancers to do your test.
Once these three are done and they have submitted the sample article to you, you now found a writer you can work with.
But what if you also want to offer SEO, or graphic art? You need to spend money on these two services again to find the right provider.
So, the best thing you can do is find one service you know a little bit about, buy a few just to test and find a goo supplier. Once you have done that then you can focus on selling that one service.
Once you start making a profit then you can scale.
Should I Take A Course To Do Drop Servicing?
Yes, you should take a course in drop servicing. The problem is that there are no courses around at the moment since this is a new opportunity.
What you can do is to take an e-commerce course for dropshipping, as the approach and business style are the same.
The only difference is that you will not sell physical products, so you do not need a supplier. However, the skill you need the most is marketing, and using social media to your advantage as you sell your services.
You will find it a little difficult to make this business work if you don't have experience skills. However all you need to do is learn how to market your service.
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.
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.