Skip to content
Home » How To Start A Drop Servicing Business

How To Start A Drop Servicing Business

How To Start A Drop Servicing Business
Spread the love

Drop-servicing businesses have become more popular, and more functional in today’s world. They are probably recognized as the most profitable way of conducting business worldwide. It has become a potential target for many people and some have already started making huge profits from it. There are various online business choices to pick from. Also, it is advisable to consider service demand, profitability, and manageability. Buying products and services online has proved to be safer, secure, and convenient for customers. Drop Servicing is one of the most trending models online with low entry requirements. Starting this profitable business may require little or no capital, hence the noticeable competition among business owners. So what exactly is Drop-servicing? Or what do we mean by a Drop-servicing business model?

What is drop-servicing?

Drop servicing is a business model in which companies and individuals acquire clients in a bid to offer a service and then outsource the skills to complete the work to a less expensive freelancer. In other words, it is the selling of marked-up digital services to customers, in which services are delivered through a third party. Business owners act as middlemen between clients and service providers to provide quality services for a lower cost. Work is deployed to freelancers and agency partners who do the work under the business owner’s name. Accordingly, the business owner gets to keep the difference between what the customer pays and the service provider’s wages. The drop servicing business model can also be known as service arbitrage, white labeling, subcontracting, or an agency model.

How does It Work?

Drop Servicing is similar to drop shipping and is often viewed as a branch of drop shipping. Respectively, drop-shipping involves the sale of products whereas drop-servicing involves the sale of services. However, the profit-making technique is the same. You buy a product or service for less and sell it for more. Additionally, the business owners lead the sale while performance is done by freelance and agency service providers in the background.

It is easier to start a drop-servicing business without any budget. The most important aspect is that you fulfill the essential steps required. These steps include, firstly, creating a website to advertise the services being sold. Secondly, find freelancers or agency partners to provide the services.

Services that can be drop serviced.

You can drop service anything that can be carried out by a service provider. When you are choosing services to sell to customers, put yourself in your customer’s position. Moreso, think of what service you want to purchase if you were a customer. And doing a trend analysis will also assist in ascertaining the type of services widely searched by potential clients. Below is a list of some of the service options that can be drop-serviced.

  • Content creation
  • Graphic Designing
  • Blog posting
  • Resume writing
  • Video creation and editing
  • Social media management
  • Lead generation
  • Online tutoring
  • Website designing and development
  • Podcast production
  • Online Marketing
  • YouTube intros
  • Catering business

You should offer services you have knowledge and/or experience in. The main aim is to avoid difficulties in managing the service and putting yourself at risk of making a loss. The idea is not to be an expert but to know how the service works is necessary.

Starting a drop servicing business.

1. Choose your business idea. 

Every business requires proper planning to create a strong foundation before kickstarting. Firstly, you need to cherry-pick the service you want to offer from the various options available. The primary goal is choosing the perfect business idea and determining your target market.

Brainstorming your business ideas and doing a checklist first can help you in making the best choice. Think of a skill or picture that you already have knowledge or experience in. If you want to stretch your limits, think of a service that you may be interested to learn about. More so, look into service ideas that have the highest demand in the market. Where demand is high, people are more than willing to pay for the service. The service idea you choose must have the potential to bring high-profit margins to your business.

As a beginner, it is wiser to choose ideas that are easier to accomplish. Furthermore, offer one service first, and leave room for future expansion based on demand. 

2. Know your competition.

Know other online businesses providing the same service as you. It will help you to identify where your competitors are lagging and motivate you to be more creative. Analyzing the gaps in your competitor’s service provision helps you to come up with excellent ideas to attract clients.

 3. Build your team of service providers.

Building your team involves choosing a team carefully and training them to meet your expectations and standards. The team will be responsible for bringing life into your drop service business or otherwise. It is advisable and reasonable, to begin with, one service provider, providing the service under your name.

You can source online business service providers through friends or platforms for freelancers. Platform examples include Fiverr, Upwork, 99designs, Pro Blogger for writers, Pinterest groups for Pinterest freelancers, etc.

To build a team that can excellently provide your service, you need to interview and evaluate your candidates. In your evaluation, you need to:

  • Check their experience level matches the service that you want to provide
  • Know the amount of training that will be required for your candidates to meet your expectations and standards.
  • Check whether you can rely on the team to deliver the service to your clients on time.
  • Check their communication levels, availability, and performance.
  • Know where they are located, the time difference, and whether that can affect the delivery of services to your clients.
  • Know how much and how often the service provider charges you and whether you will make a profit or.

4. Sign a contract with your service provider.

Sign A Drop Servicing Contract
Sign A Contract

A contract with your service provider is necessary for certain instances like supplying them with intellectual property. Additionally, where they are likely to have some interaction with the end customer is another instance. This is basically to create a safe and secure working environment, allowing both parties to maintain their limits.

5. Build and develop your brand.

Your online business idea, execution plan, and well-trained team have to be in line with your standards and vision. Once all is set, you now need to establish your brand. Your online presence is very essential if your vision is to become one of the best online drop servicers. Also, consider creating sponsored pages on various social media platforms. For your branding, you need to design a custom logo that speaks to the identity and personality of your business. Your logo design is the face of your brand that captivates customers. The background on your brand should emphasize why you provide your services and why clients should choose you. Your website should also include an eye-catching description of your services and what you are offering to clients.

Is a website necessary to start a drop-servicing business?

The main purpose of creating a website is to show your clients that you are a legal and professional company. However, as a new online business, you can introduce your business to people who trust you and know you exist. You can reach out to your family, friends, neighbors, churchmates, workmates, etc. Marketing your business to them and getting your first clients from the people you already know.

6. Create marketing strategies that attract customers.

Marketing is an essential element of any business online and offline. The aim is to build a good reputation for your business, attract new clients and retain the old ones. Referral marketing, content marketing, and social media marketing are some of the few marketing strategies you can use.

  • Referral marketing is a cost-effective marketing strategy whereby you can begin a referral program. This can encourage your existing clients to refer more clients to come and support your business. The good and efficient service you render to your clients can trigger your old clients to get you more referrals. A good example of this Strategy is Ezoic. With Ezoic their customers can refer others in exchange for a commission.
  • Content marketing is another marketing strategy where you can invest your time and energy in multimedia content creation. Such content includes videos, eBooks, blogs, emails, podcasts, etc. This content is meant to educate people while at the same time entertaining and building your brand awareness.
  • Social media marketing as a strategy is there to reach your target market /clients. Having a website is a good idea but also know your audience and the social media platforms they use. For example, if your target market is teenagers, use Tik Tok or Instagram. Similarly, if your target market is professional people use LinkedIn or emails.  You need to find clients who have a budget that matches your marked-up prices.

7. Create your payment structure.

Creating quick and easy payment methods for your clients and yourself is necessary. For your domestic clients and service providers, a business PayPal account can be more convenient. For International clients and service providers, you can open an International business account with International banks like Wise or Payoneer.

Is it ethical?

Drop servicing is ethical as long as it does not involve lying to your clients about your services. Outsourcing work to freelancers and agency partners who know how to do it better than you is not lying. Choosing not to be open about your partnerships with your customers does not amount to a lie. You simply do not need to pretend that you are doing the work yourself. Subcontracting is normal and widely accepted, most online and offline businesses also do this.

Do you have what it takes to run the business?

For you to run a successful drop-servicing business, you need to possess some excellent qualities. You need to be a good salesperson and an effective communicator to your client and team. Additionally, be organized, manage your time well, and possess a mentality of a business owner. Making money through your business requires hard work, self-discipline, and accountability.

Is drop servicing Legal?

It is legal to drop service. It is necessary to know if the services you want to provide are legal where you want to provide them. Moreso, researching your tax responsibilities before starting your business is also necessary. Find out if there is any need to file tax return documents every year. Accordingly, this will allow you to operate freely and legally.

How to run a profitable drop-servicing business.

Offering the right services that people need can make your business very profitable. The tactic is to charge 3 or 4 times more than what you are paying your team of service providers. Determining your price range by checking how your competitors are charging is very important. Therefore, you may attract potential clients and you can as well charge more as your reputation for quality service grows.


The online drop servicing business in actuality is not easy, it requires hard work. However, it can be highly rewarding if done properly. Following the proper steps will help you to set up a highly functional and quality guaranteed service. In addition, knowing your target market and where to find them is equally important. Moreso, creating attractive marketing strategies and checking the legality of your service helps you to strengthen your customer base. You also need to be willing to gradually grow your business and expose yourself to opportunities for massive profits. Always check your competitors, learn and become better and more popular in the market for your excellent service.

Leave a Reply