The Ultimate Guide To Drop Servicing In 2023 (5k+/mo)
Last Updated on February 20, 2024 by John Cirelly
If you’re wondering if starting a drop servicing business is right for you, then you’re in the right place.
In this article, I’ll explore the pros and cons of drop servicing, how much you can earn, and how to set up your own drop servicing business in 24 hours.
What Is Drop Servicing?
Simply put, drop servicing is a business model where you sell a service to a client, and then outsource the work to a freelancer or agency.
The biggest difference between drop servicing and running an agency, is that in drop servicing, the customer is under the impression you are doing the work. We’ll touch on the ethics of this later on.
Here’s an example of a drop servicing business:
- A freelance video editor uses platforms like Upwork and Fiverr to get clients.
- He charges $200 per video.
- His clients are under the impression the freelancer is doing the work.
- The freelancer outsources the work to other freelancers for $50
- The freelancer pockets $150 in profit per video.
As you can see, this can be an extremely profitable business model if done right.
Is Drop Servicing Legal?
Drop servicing is completely legal. However, it can be unethical if you can’t deliver quality results.
For example, if a company hires you for your expertise in a particular subject, but you outsource that work to someone who isn’t as experienced, there will be a huge disparity in the quality of work.
In some cases, if you sign a contract with a company and outsource the work, you could be in breach of contract. For example, if your contract includes a non-disclosure agreement and you share project details with other freelancers, you could find yourself in court if discovered.
How Much Money Can You Make Drop Servicing?
Drop servicing is one of the highest-margin side hustles you can start. Margins are typically between 70-85%, whereas agency margins can be as low as 30%. Drop servicing is an incredibly lean business model, especially when compared to large agencies with tons of overhead.
With that said, it’s completely reasonable for new drop servicing businesses to bring in between $500-$5k per month in revenue. With the right systems in place, drop servicing businesses can scale beyond 20k/mo.
Pros & Cons Of Drop Servicing
While drop servicing can be highly profitable, there are a few pitfalls to watch out for. Below are the pros and cons of the drop servicing business model.
Pros
- High-profit margins
- Can use freelance platforms to get more clients
- Easy to find fulfillment partners
Cons
- Difficult to scale
- Maintaining quality can be an issue
- Individual jobs are worth less compared to agency work
How To Start Drop Servicing
Below is how you can build your drop servicing business from scratch with no money, or experience.
1. Choosing The Best Drop Servicing Business
The best drop servicing business is the one you’re most familiar with. For example, if you have experience in writing, drop-servicing writing content would be a great place to start.
Starting off with something you have experience in allows you to accurately check the quality of the work you get back, ensuring you keep your clients happy. Of course, you can expand on these services as you grow more confident and build better systems.
Pick a productized service you can master and offer the same every time. Productized services are the same for each client, with little to no customization. For example, a podcast editing service will have the same steps every time, whereas a social media marketing agency has tons of creative and brand differences across each client.
2. Finding Fulfillment Partners
Before you start taking on client work, you’ll want to have a list of freelancers that can actually do the work. Platforms like Fiverr and Upwork are great places to start. Find at least five freelancers you’d like to work with.
Put their information in a Google Sheet. List their profile, rate, expertise, and quality rating. Update your rating as you get more work back from them. At this stage, it’s a good idea to hire some of them for a test job to see how well they perform.
Sometimes, you can even use artificial intelligence platforms like ChatGPT as your fulfillment partner. For example, ChatGPT is excellent at creating short stories, creating ad copy, and rewriting content.
3. Finding Clients
Now that you have a team, it’s time to find some clients. Many drop servicing businesses rely on freelancer platforms like Upwork and Fiverr to find clients higher-paying clients and keep the margin.
Another strategy is to create a dedicated website for your service, and drive traffic to it through paid ads. For example, you can build a list of freelancers offering pet portraits for $15 each, then offer it as a service for $49.99.
With the right branding, marketing, and delivery, you can make some serious profit.
If you’re just starting out, offering a drop service you can resell on a freelance platform is easier and requires fewer technical steps.
4. Delivering Quality Work
This is one of the biggest hangups of the drop servicing business model. As demand and client expectations mount, the quality of work often slips. Freelancers disappear, start cutting corners, or try and outsource the work even further down the line.
Have a system in place to verify the work you get back and only deliver payment if the job was done correctly. You can do this yourself initially and outsource this quality assurance to a virtual assistant down the line.
5. Scale Your Drop Servicing
Once you have a few clients under your belt, it’s time to expand. You can scale your drop servicing business in a number of ways. The strategies you use will depend on what service you offer.
For instance, a B2B service could scale through cold email, while a B2C service could scale through Facebook ads. Platforms like Fiverr and Upwork have paid options to boost your service for a fee.
Below are a few ideas for scaling your drop servicing business:
- Search Engine Optimization (SEO)
- Paid Ads (Facebook, Google, etc.)
- Influencer Marketing
- Cold Email
Drop Servicing Ideas
The best way to find drop servicing ideas is to look on platforms like Upwork and Fiverr. Simply look under the different categories of services you can choose. Remember, you want something you can productize easily.
If you’re still stuck, here’s a list of drop servicing ideas for inspiration:
- Video editing
- Freelance writing
- Logo design
- Creative gifts (portraits, etc)
- Copywriting
- Done-for-you websites
- Custom storybooks
- Resume optimization
- Proofreading
- Podcast Editing
- Voiceovers
- Lead generation
Drop Servicing Tips & Tools
Drop servicing is a rewarding business model, but it can be challenging at time. Consider these tips as you build and scale your service business.
- Focus on your brand: Your brand shows the customer you’re the expert at your service and enables you to charge higher prices.
- Always check your work: To ensure quality work, have a virtual assistant check each job before it is sent to the client.
- Scale slowly and thoughtfully: You don’t have to dump $1,000 in paid ads overnight. Start with a $20/day budget and increase as you see results.
- Reward your freelancers: If business is going well, consider tipping, leaving a great review, or giving a holiday bonus. This can also keep them around for longer.
- Just get started: You’ll never have 100% of all the answers. The best way to learn, is to do it.
Drop Servicing Websites
If you’re looking for inspiration, or places to hire freelance talent, below is a list of websites you can use to aid your drop servicing business.
- West & Willow – Custom pet portraits.
- Loud Videos – Custom animated videos.
- Fiverr – Source for general freelance fulfillment.
- Upwork – A good source for experienced freelancers.
- Toptal – Marketplace to hire high-end freelancers.
- 99 Designs – Marketplace specifically for designers.
Do I Need a Website For Drop Servicing?
No, you don’t need a website for drop servicing. You can easily take on freelance service jobs such as writing, copywriting, and programming, and simply hire other freelancers behind the scenes.
For services you’d sell to consumers, such as custom stories, gifts, and portraits, you will need a website to take their order. B2B services such as content writing and social media marketing do not require a website.
Is Drop Servicing Worth It?
Drop servicing is worth the effort, and is one of the best side hustles you can start. With low startup costs, high margins, and no skill needed, drop serving is well worth your time if you’re looking to earn an additional income.
