Creating a drop servicing business is one of many ways to make money online. You probably knew that, or you wouldn’t be reading this! But did you know that drop servicing is also called service arbitrage? That’s the fancy term you can use to impress folks at your highschool reunion! This article will explain how to start a drop servicing business and make money completely on the internet.
While there is no such thing as a “perfect” business model, the drop service model is certainly a powerful one. It is particularly effective if you want to outsource as much as possible, because drop servicing is outsourcing by its very nature.
Note: I’m an affiliate marketer and this article does contain affiliate links. If you follow them and then make a purchase, I may receive a commission at no additional cost to you. Thanks for your support, and enjoy the article!
- What is Drop Servicing vs Dropshipping?
- How to Start a Drop Servicing Business
- How to Get Potential Customers and Clients
- How to Scale a Drop Servicing Business
- FAQ (Frequently Asked Questions)
What is Drop Servicing vs Dropshipping?
You’ve probably heard a lot more about the dropship business model than the drop service model. They’re very similar, but with dropservicing you are reselling services instead of goods. I think dropshipping got popular first because most people think of eCommerce stores when they think of making money online. But more people are realizing that selling services online is often easier and more profitable, so I expect drop servicing to blow up in coming years.
What is the Drop Service Business Model?
A drop servicing business is really just a reselling business. As a drop service provider, your main job is to find clients to resell services to. This can be a great idea if you’re amazing at client acquisition or lead generation. But it can also be a good way to start a business as a beginner.
For example, imagine you want to start a digital marketing agency. You could focus on everything from building your website and getting clients to posting on social media – also known as the “do it all yourself” approach (this is what I did when I started my business. It’s exhausting!).
Or you could focus on just one or two things, like finding and building relationships with great clients. Everything else can potentially be outsourced under a drop servicing business model.
What Services Can You Resell?
Any service that can be rendered 100% online is a good candidate. Here’s a list of services that are ideal and often resold online:
- Social Media Marketing
- Search Engine Optimization (SEO)
- Content Writing
- Video and Image Editing
- Graphic Design
- Video Animation
- Most other digital marketing activities
- Anything a virtual assistant can do
As you can see, there are a lot of options available. One not mentioned on the list is consulting – you can be a 100% online consultant in almost any field or industry. It might seem odd to sell someone else’s consulting services, but there are many affiliate marketers who build their entire business model around this strategy.
How to Start a Drop Servicing Business
A cornerstone of the drop servicing model is finding a great service provider whose work you can resell. There are a number of ways you can do this. You can:
- Outsource to a freelancer or freelancers
- Hire a skilled employee or team
- Form a relationship with a business
- Engage the services of an existing reseller
The easiest way is likely to engage an existing reseller agency, simply because they will have existing processes for everything. However this will give you less control, and you won’t be able to form a personal relationship with them like you would an ordinary business, a team, or freelancers.
How to Hire a Freelancer
The best option if you’re on a tight budget is probably to go with a freelancer. The only issue with this is finding great freelancers who are both affordable and skilled. Most people take completely the wrong approach to outsourcing, because they get terrible advice. Most websites will tell you to find someone on Upwork or Fiverr, but those marketplaces are a headache waiting to happen.
Instead I recommend using a service like iWorker to match with a freelancer. If you really want to find someone yourself, my favorite platform is OnlineJobs.ph. iWorker is a service that manages remote workers and connects them with entrepreneurs. OnlineJobs.ph is a freelance marketplace specifically for workers in the Philippines.
Both of these options make it easy to find a skilled worker who will meet your needs and even a limited budget. I strongly recommend sampling the services of anyone you intend to work with before you start searching for clients, which is the next step.
How to Find Reseller Service Providers
While freelancers can be inexpensive, the best and easiest way to do service arbitrage is by outsourcing to a reseller agency or company. A great example of this is SEOresellers. They are a reseller website that focuses on SEO, but also provides digital marketing services ranging from social media management to web design and more.
If you know you’re ready to start a digital marketing arbitrage business, I recommend signing up for a free trial with SEOresellers. That’ll give you access to their suite of agency tools as well as their pricing details and more.
How to Get Potential Customers and Clients
While there are many ways to find customers and clients for your business, Facebook is an easy catch-all answer to this question. Facebook is the biggest social media platform, so if your ideal customers exist online, they’re probably on Facebook.
With Facebook there are two main marketing strategies; organic and paid. Organic typically means joining Facebook groups and helping people who might be interested in your services. Paid means running Facebook ads, which can be difficult to do well. For more information on both methods, check out my article on marketing strategies.
Marketing On Social Media in One Step
A great method of both meeting and servicing clients is social media marketing. If you can prove the effectiveness of social media by marketing your drop servicing business, prospects will be more likely to understand the need for what you provide.
When someone sees your content on social media and thinks “I wish I could post stuff like that” often enough, it’s only so long before they are asking you for a quote. You might need to get on a call with them to establish the work and pricing, but all you really need to do to make someone a client is show them step by step why they want to work with you.
Digital Marketing 101 – Start Local
Whether you’re starting an online white label agency or a normal local marketing business, it can make a lot of sense to start by servicing entrepreneurs in your local area. Have you ever noticed how many people follow sports teams or celebrities who are from the same area as them?
Business can work in a similar manner. In my two years of building marketing skill and running a business, I’ve found that people in close geographic proximity to me are more likely to offer opportunities or be open to my suggestions.
How to Sell Drop Services
There are three main methods for selling drop services that I recommend. You may end up using some combination of them most of the time, and that’s great; they’re designed to work together.
- Instant Messenger – Whether you’re DMing on Facebook, Twitter, or elsewhere, direct and/or instant messaging is a good way to get to know someone. It also lets them know that they’re having a personal conversation with a real person. For extra points, consider sending the occasional voice message rather than just text all the time. Hearing your voice will help give you a unique identity in their mind.
- Video Audits – If you’re selling a drop service such as SEO, social media management, or YouTube marketing, one great way to hook clients is sending them a video audit of their online presence. This can be as short as 4-5 minutes, and it’s basically just a chance to showcase your expertise. Important note: Don’t tell them how experienced you are, prove it to them by pointing out things they can optimize about their digital real estate.
- Video Conferencing – The fastest and most direct way to sell something online is usually getting on a video or at least audio call with them. This permits a level of communication and authenticity that other methods cannot compare to. If you’re trying to sell especially expensive services, getting on a call will often be necessary.
One of my favourite methods of finding clients for my digital marketing services is to start via email and/or instant messaging. Once I establish contact, I’ll offer to either send them a video or get on a call. This way they don’t feel like I’m pressuring them into a sales call.
Where to Sell Your Digital Assistance
In addition to knowing how to make sales, you need a place to keep your drop servicing listings. Now, realize this; if you have high prices, few people will buy directly of your website. But you may be able to make sales that way for prices of $500 and under, or even more if you have great copywriting.
One of the best platforms I recommend for selling anything online is GrooveFunnels. It is an alternative to both Shopify and ClickFunnels, providing the ability to create ecommerce stores, sales funnels, and much more. You can use GrooveFunnels to build your website, manage your clients, and much more.
How to Scale a Drop Servicing Business
The easiest way to scale a service based business is to turn it into a productized service. Productized services are established service packs that usually come with established prices. These are good for clients because they know exactly what they’re getting up front and how much it will cost. They’re good for the businesses because they are inherently scalable.
Two great examples of productized businesses are Kimp.io and PandaCopy.com. Kimp is an unlimited graphic design agency, and PandaCopy is an unlimited copywriting service. Both can handle a potentially unlimited amount of work, and both provide bottomless services in exchange for a fixed monthly fee.
If you need graphic design for any reason, I strongly recommend checking out Kimp.io. If you need copy or content writing, take a look at PandaCopy.com. Outsourcing parts of your work can help you grow your business, whether you use them for content creation or something else.
Your Drop Service Business Checklist – Service Arbitrage to Save You Time
- Decide on a niche, vertical, or target clientele
- Decide what to offer (make a list of examples of services you can sell)
- Buy a great domain name for your business (I recommend Google Domains)
- Get fast web hosting for your website
- Build your site or outsource it to a reseller
- Outsource your branding and graphic design
- Outsource your content writing and copywriting
- Start prospecting for potential clients
- Provide value, book calls, make sales
- Make sure you build profits into your sales margins
If you need a more complete drop servicing guide, feel free to contact me and let me know! I’m always happy to help out other entrepreneurs, and I’m constantly working on improving this article. I hope it’s been helpful to you – consider giving it a share on social media if you know anyone who might benefit from the content!
FAQ (Frequently Asked Questions)
Here are some of the most common questions about service arbitrage / drop servicing, along with my best answers.
Is Drop Servicing Legit?
Yes, drop servicing is a legitimate business model. In fact I would say it’s more legit than its popular cousin, dropshipping.
Is Drop Servicing Legal?
Yes, it’s perfectly legal. You should be up front about the fact that you’re reselling services, in my opinion.
Is Drop Servicing Still Profitable in 2021?
It certainly is. With more businesses adopting an online model due to COVID-19, service arbitrage may see significant growth this year and beyond.