What is Drop Servicing? The Low-Cost Business Model You Must Try!

You may have heard that drop shipping is a business model where sellers do not stock goods or handle logistics. Sellers only need to focus on marketing to create high profits. This method has been popular for several years.

Now, entrepreneurs realize that this business model can be applied to any service. Service is a product, just like selling goods to consumers through drop shipping. Drop Servicing involves selling services, whether products or services. Entrepreneurs do not need to provide these services themselves but act as the "middleman," connecting the "service provider" and the "service demander."

With a business model like this, you don’t need to have the ability to provide products or services, so you can start a Drop Servicing business at a very low cost. However, if you want to continue to expand, you will need to invest more effort and capital in marketing, SEO, advertising, and content.

Why Create a Drop Servicing Business

Maybe you are very good at business, marketing, and operations and have a great enthusiasm for creating a new business, but you are unlikely to be proficient in all skills, and your daily time is even more limited. For example, if you don’t know how to design an exclusive logo for people, you won’t have time to drive a car for several hours to provide cleaning and moving services. But through this business model, you only need to receive an order and then delegate it to the appropriate designer or local cleaning company. There is no need to in-depth study of various fields or perform tasks physically.

Through this method, it can be very efficient and low-cost to start, experiment, and further find expansion opportunities.

Disadvantages of Drop Servicing

The following are the obvious disadvantages of Drop Servicing:

1. The service is not provided by oneself, adding an extra layer of communication, and the response of customer service cannot be immediate.
2. As the service itself is non-professional, it is difficult to evaluate and control the quality and delivery time of the service.
3. Easy to replicate, resulting in relatively low barriers to entry.

Depending on the service you choose, there will be different situations. Fortunately, the advantage of this business model is that the cost of experimenting is not high.

How to Start a Drop Servicing Business

Only the following steps are required:

1. Choose a Niche - The Service You Want to Sell

First of all, you must choose a suitable niche market. What service will you provide? You can choose one or even multiple services and adopt the Drop Servicing model. As long as you can find the service provider, it will not be a problem what service you want to sell! For example, you can set up a cleaning company website, claiming that the whole world can provide on-site cleaning services, and then appoint a local cleaning company to provide services when you receive an order. You can also set up a translation company to provide translation services in eighteen languages. When you receive a request, you can find a suitable translator from Fiverr.

Here is a small suggestion: try to choose services with a clear scope of delivery to avoid the cost of two-way communication.

2. Find a Suitable Service Provider

You can find suitable freelancers in various communities and freelance websites. The most convenient freelance service market in the world today should be Fiverr, offering a variety of services. However, for more localized services, it is recommended to find a local service provider through local freelance platforms.

3. Define Your Target Audience

You need to define your target audience, think about who needs your service, what pain points they have, and how to get their attention. With Drop Servicing, the key point is to proactively discover the pain points of customers and then provide a convenient way for them to enjoy the service. You can earn the profits between the "service provider" and the "service demander."

4. Start Acquiring Customers

This is the most challenging part of starting a business. You must plan the way for customers to discover you and convert them into paying customers. It is recommended that you build an image website (Landing Page) and an order-receiving method (such as forms, shopping carts) at the beginning. Test the waters through social media (Facebook/Instagram) and advertising (Google/Facebook) for more exposure.

Drop Servicing is a very easy-to-construct business model. Basically, you can start a new business through the simplest Landing Page, mobile phone, communication software, Email, etc. It is an excellent way to create a one-person company. The model can be very simple or very complicated, and you are the person responsible for completing the entire puzzle!