You must have heard about ‘drop shipping’. The business model wherein you sell physical products without actually physically warehousing them.
What if I tell you that you can now do the same for a service?
It’s a trend that’s catching up with the rest of the world. And we mustn’t lose out on an opportunity to make a profit from it. The model is called Drop Servicing.
We will cover all the aspects related to drop service in this article. We will also look at a possible blueprint to get profitable through drop servicing. Let’s get acquainted with all possible information on drop servicing.
What is Drop Servicing?
Drop servicing, in the simplest way, is third-party service outsourcing. But, because it so closely resembles the drop-shipping model, it is christened as drop servicing. No products, just services.
If you don’t know what drop-shipping is, then it can be explained something like this,
A customer visits your website, pays for a product, and orders it. As a website owner, you approve the order and send the customer details to the product manufacturer who packages and sends the product to the customer by themselves. Your website branding features on the package.
Benefits of Drop Shipping are
- Your branding improves
- It’s your customer experience that customers talk about
- You gain an income by selling the product at the price you want
- The profit is high as you only purchase the product at a wholesale price
If we liken the above process to drop servicing, then the process would somewhat be like is,
A client comes to your website and sees that you offer some great services such as SEO, digital marketing, web design, etc.
He/she wants to hire a particular service and for example, chooses SEO. He searches for a pricing page. Once he finds the pricing, which for example can be $550 for a monthly SEO base package; makes the payment to hire you.
Now, you do not own any employees. It’s just a website. So how can you fulfill the client’s requirement?
Unbeknownst to the client, you search for freelancers over the internet who can get the particular SEO tasks done for $50. You hire them, let them get the monthly tasks done, and boom! a profit of $500.
Benefits of Drop Servicing are
- No employee salaries or overheads
- Your branding gets improved if good service offered
- Get access to great freelance talent to build a community
- More than double the profit
- Endless services to choose from
Drop servicing can also be termed as ‘Service Arbitrage’. This is because the clients do not know that you outsource or hire external freelancers to get the work done.
Drop servicing can also be termed as ‘Sub-contracting’. This is because you take the bigger contract from the client while designating a sub-contract to the freelancers.
What are some Drop Servicing benefits?
I did highlight the basic advantages of drops servicing such as,
- No employee salaries or overheads: With low starting costs and no employee overheads, all you have to bear is a domain name subscription, paid accounts for searching freelancers, and other miscellaneous expenses. No warehouse or inventory overheads to bear.
- Your branding gets improved if good service is offered: You can start new into the market. The service may be new to you, but you can gain decent branding by offering services with low TAT (turnaround time). Over time, build a strong presence in that particular niche/industry/service.
- Get access to great freelance talent & build a community: Build a strong freelance community by engaging and hiring the best. A strong presence here will guarantee affordable and task-worthy freelancers to ensure you deliver the best quality.
- More than double the profit: This is because you can set the pricing for your service packages. You can also control the price you want to pay your freelancers. This way you always make a large profit.
- Endless services to choose from: Enter any niche segment or market. Ensure you have the freelancers or personnel available, and you make the right research before creating website content over that particular niche.
What can you Drop Service?
Anything. That’s right. Drop service anything you want as long as you have the understand of the service and can get the client the best quality work.
Some outsourced Drop Servicing examples to sell are:
- Website building
- Logo designing
- Backlink generation
- Guest post creation
- Blog post writing
- Social media management
- Graphic arts designing
- Ad copywriting
- Video creation
- Virtual reality
- Video editing
- Virtual Assistant
- Social Media Manager
- Animated GIFs
- User Testing
- Lead Generation
- Resume Writing
- Book trailers
The list is endless. If you are an agency that can deliver a whole gamut of services, then you are in business.
Which are the most popular freelance marketplaces for 2020?
Freelance marketplaces are platforms for freelancers and service providers to work together. Such marketplaces make money by taking a cut from both the service providing agency and the freelancer.
The objective of the freelance marketplace is to provide both parties with hassle-free business experience. Examples of popular freelance marketplaces are,
- People Per Hour
- HubStaff Talent
How to find the right freelancers?
Once you get the client brief, create an easy-to-understand ad on the marketplace. Once you receive applications from freelancers, take your time to review their profile. Make sure you add the review time in the client’s project estimation timeline.
Review a profile means you look at their feedback rating, the total number of years in the industry, and how much they charge. Put all the applicants into a list and pick the top three based on your business parameters and scope.
Order their service and see who performs the best. The two who don’t make it can be added to another list of probable freelancers for projects that require more than one freelancer.
Also, important to understand are the marketplace ‘terms of service’. Understand how the payment system works. Figure out how ‘Resolution Policies’ work and whom to file a complaint to if a freelancer goes rogue or goes past the deadline.
It may seem straightforward, but hiring dedicated yet prompt freelancers is not easy.
Compare different marketplaces to check their respective charges. Fiverr for example, charges a 20% fee from the freelancer. This might keep good freelancers from signing up on Fiver. The same also goes for UpWork. Service providers are charged $1 to $2 for a singular project.
How to get started with drop servicing?
There are two ways to start your own drop servicing business. The first one is ‘Organic’ but requires time to be spent on targeting the right clientele.
The second method is ‘Targeted’ and can garner immediate success.
Organic Drop Servicing Setup
The information mentioned in this section is unique and isn’t available over the internet. The purpose of this drop servicing guide is to teach you the two most effective ways to make money via drop servicing.
Step 1 – Research and select the right service
Do some basic keyword research to try and find services that you can rank for. Make sure you target the ones where the keyword competition is low and you are an expert in it.
Create a website or a web-store related to your drop servicing services. Think of appropriate pricing for the respective packages. Check your competition to see how they price these services on their websites.
Step 2 – Create an account on freelancing marketplaces
If you already employ personnel who are good enough to work on client requirements, then you can skip this step.
If you wish to hire freelancers, then create an account on the most suitable freelancing marketplace. Your target here is to find a highly reputed yet affordable freelancer with good reviews and ratings.
Create a simple gig (ad) defining the requirement. Don’t mention any timelines. Select the appropriate package that some marketplaces provide.
Step 3 – Generate traffic to your website
This is the toughest part. For clients to find you, you need to be visible in the market. Adopt effective inbound marketing, SEO, social media marketing, and content marketing strategies to improve website traffic.
Create funnels to identify what a visitor needs, where is he getting that information on your site, and how you will capture them. Try to get a payment gateway setup on your checkout pages to allow clients to pay for the services.
Also, set up accounts to make payments to freelancers easy.
Paid Advertising Drop Service Setup
Steps 1, 2, 3 of the organic method remain the same. Along with that, you need to adopt paid advertising as a tool to target both clients and reputed freelancers.
Google Ads work best. Setup campaigns that target clients searching for low competition keyword services. Write fantastic ad copy to also entice freelancers who are looking for work in the same niche/service.
What are some effective Drop Servicing tips?
You can drop the service whatever you want. Just have a basic understanding of the service. Some quick tips for drop servicing are:
- Avoid drop servicing services with complex to-and-fros
- Use the Google Keyword Planner to find low competition keywords
- Use Google Trends to check which services are in vogue
- Your website homepage must do the selling
- Ensure secure payment processing is activated
- Work on email newsletters to upsell services to clients
- WordPress works better than say going with Shopify
- Don’t go overboard. Start with fewer clients, and expand once resources are aplenty
Drop Servicing in India
You will be surprised to know that there is a drop servicing company in India. No other company in India has delivered a better drop servicing success rate and stronger clientele than Nordic Intent.
Their partnership with companies and agencies across the Nordic, US, Canada and UK, has helped them establish a robust outsourcing hub (consisting of Kodework, Ninestack and Creometric). This hub facilitates projects related to,
- Web design
- Web development
- Software Development
- Mobile Application
- Artificial Intelligence
- Machine Learning
- Digital Marketing
and a lot more…
If you are looking for a drop servicing website example, then check out Nordic Intent’s website.
Drop servicing in India hasn’t caught up yet, that’s why finding a drop servicing ebook or drop servicing pdf is hard to come by.
We hope this post answered all your questions ranging from ‘drop servicing meaning’ to ‘drop servicing strategies’. Indian drop servicing companies are sure to catch up with this interesting business model someday. Until then, its only Nordic Intent.
Let’s end with a list of frequently asked questions about drop servicing.
Drop Servicing FAQs
Q. Does drop servicing work?
Yes. Drop servicing will work if the services you offer solve client problems. People are looking for solutions and will pay the best rates for them.
Q. Is drop servicing profitable?
Yes. Drop servicing is profitable because it is scalable. You don’t have to work on client requirements yourself. Simply hire freelancers and based on how easily you can find them, charge your clients with a profitable fee.
Q. What is service arbitrage?
It is another name for drop servicing. It refers to the trading of service. Asking services to one party to selling it to another one. You are the middleman. Everybody benefits here. The client pays for good work and gets it. You charge the best price from the client and get it. You charge the freelancer for good work and pay him/her accordingly.
Q. Is drop servicing legal in India?
Yes. There are no trade laws broken in drop servicing. Each party voluntarily accepts the terms of the trade and fulfils the requirement.
Q. What are the limitations of drop servicing?
Yes. There are limitations. Make sure you enter the right niche and have the right personnel to work on client requirements. Do not venture into services where you do not have an understanding of.
There may not be many levels of control with freelancers. E.g. if a freelancer did a good job on a logo design, chances are you may not be able to hire him for another project as he/she could be engaged elsewhere.
Quality will always vary, and this may make it hard to build goodwill among clients. Emergencies, revisions, and price could always jeopardize an arrangement.
That is why having a loyal employee talent base is the key to overcome this problem.
Q. How much does drop servicing cost?
The cost varies. You will have to pay for hosting the website, domain charges, payment gateway fees, freelancer charges, and even paid advertisement fees.
Q. Drop-shipping vs drop servicing?
Drop servicing is less risky as compared to drop shipping as there are no suppliers involved. There are no product return hassles and shipment information to pass on. No customer complaints or bad product reviews to worry about.
Q. How to hire a drop servicing company in India?
Simply go to Nordicintent.com and choose from a variety of services ranging from web design to digital marketing.
You will need to improve your marketing skills for being an effective drop servicing company/agency. You can control the pricing if you know the service you offer. And if you have a proven track record, then you can always charge more.
If you are looking to drop service digital marketing, web design or app development,
we can help you with that
Also, if you are a Freelancer looking to WORK WITH US, or just interested in knowing more about the cool things we do, go to nordicintent.com