The goal of any business venture is to make money. Without being able to make money, the business will have to close. Drop servicing is a business model that sets one person up as the “business” and another as the service provider. It makes sense when you look at some of the examples.
What is drop servicing?
Drop servicing is a way of doing an online business without having to do every aspect of the work yourself. It can also be called service arbitrage. You sell services to your customer but you also buy them from the people that you work with.
- The price difference between what you sell for and what you buy for can be considered your business profit.
- It is important to know the difference between cheap services and quality service and how that difference can affect your business performance
- It is equally important to remember that paying a bit more for quality will enhance business growth.
- It may be easy to find clients if you have a solid team working with you so it is important to keep your best service providers satisfied in terms of work volume and pay levels.
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What are some drop servicing examples?
One of the easiest to understand examples of drop servicing is with a freelance writer or content creator. The benefits of this type of arrangement for both the writer and your business are numerous.
Benefits of Drop Servicing to the Business
- It frees up your time to handle other aspects of your business
- Not everyone has the ability to get their thoughts in writing with clarity
- Having a team of good writers lets you pursue additional new clients
- Different services can also be handled in the same way increasing the size of the business and its potential to generate profit
Benefits of Drop Servicing to the Content Creators
- It keeps them from having to find and fight for work
- It may help the writer keep from having to work for low pay on the average freelance website
- May provide some level of job security and a sense of belonging
Additional Examples of Drop Servicing
In addition to writing services and content creation, other services can be sourced out this way. These services include:
- Graphic design
- Video production
- Audio production
- Social media marketing
- Digital marketing
- Social media management
What services can you drop service?
You can drop service virtually all aspects of your business as long as you keep in mind that your business integrity is on the line every time that you send a project out for someone else to handle. Like you would with any in-house employee, all of your providers should be fully vetted with small, trial projects to see how they do in terms of timely return and quality of the work provided.
Remember, even if you have never heard it called drop servicing, you have used this type of service in your daily life for years, even off-line.
If you called a well-known auto club and then had your car towed by a local trucking service to a local garage, this is drop servicing. The auto club pays the trucking company a set price per call. You pay the fees to the auto club and your “free” tow amounts to profit to the auto club.
Is drop servicing profitable?
Like any viable business model, drop servicing can be very profitable if done correctly. Some of the pitfalls:
- Trying to take on too many projects at one time.
- Trying to work with too many unknown team members and not being able to manage them correctly
- Trying to cut costs by hiring the people who are working for peanuts and finding out that there are problems with their content.
- Not keeping good team members happy and losing them to another company
- Trying to work with more clients than you can feasibly work with. It is better to keep established clients satisfied with the quality of the work being provided than to try to wow future potential clients with big numbers.
How can I get started with drop servicing?
There are a number of ways to get started with this business model but the easiest and most clearly definable way is best laid out in very generic terms.
Define Your Niche
Your first step is to determine your main area of focus. Your niche is going to be health and fitness.
- Will you further narrow down this niche or stay with the broader focus so that you can expand as your business grows?
- How will you be growing your niche? Will you be providing written content only? Will you use articles, listicles, and possibly eBooks? Will you move on to additional content such as video demonstrations at some point?
Build Your Team
Once you have decided the what (your niche) and the how (video/eBook/articles, etc) it will be time to find the who.
- You can find creators through online sources such as Fiverr, Guru, Indeed, Upwork, FlexJobs, and Textbrokers
- Define the projects, the expectation, and the pay, and then assign test projects before hiring any member for the team.
- You can determine whether you want to reveal that this is a drop servicing business upfront or not, although you may find that most savvy freelancers do know this
- Remember to provide positive feedback whenever possible
Build Your Brand
Even with the best team, no one is getting paid if you are not getting new clients.
- Be clear with your goals and what you stand for.
- Never forget that potential customers can be anywhere so make sure that all social media posts reflect the image that you want to create
- Set reasonable prices for your services. Too high and no one is going to hire you. Too low and it screams that you are not confident in some aspect of your business or that you are not confident in the quality of the services that you provide.
Market Your Business
Never forgetting that word of mouth is a very powerful tool, you will also need to get your information to the right clients.
- Go back to your niche. Who are the people that may need content related to that niche?
- Don’t be hesitant to approach the bigger names in the business game. You never know who is willing to take a chance on a more intimate type of arrangement.
- Set aside part of the budget for marketing remembering that as your business grows, your marketing needs will grow as well.
Final thoughts on drop servicing
In nearly every aspect of the digital world, there is some form of drop servicing going on. You may know it by other names or prefer to call it sub-contracting, outsourcing, or hiring independent contractors and consultants, but it is all the same thing.
The average person that knows their strengths and weaknesses and accepts them is happy to use drop servicing for the things they cannot do well or do not have time for. The small business owner that is unwilling to accept this concept and tries to do it all will either remain a small business or will eventually burn out or falter.
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