Drop servicing is a type of business model where you sell services you don’t personally fulfill, combining the benefit of low startup costs with the potential for high profit margins. As a result, it can be a great side hustle. From graphic design to copywriting, this model works for a wide variety of service ideas. If you’re interested in starting a drop servicing business, you can learn everything you need to know with an online search right now.
Shutterstock: Ground PictureWhat Is Drop Servicing?
Simply put, drop servicing is like drop shipping but for services. In drop shipping, a business sells physical goods without actually holding any stock. When a customer places an order, the business purchases the product from a third-party supplier, who then ships it directly to the customer.
Instead of selling physical products, a drop servicing business sells services performed by third parties. Your role, as a drop servicing business owner, is to attract clients and then outsource the actual work to freelancers or agencies. The difference between the service cost and your selling price is your profit.1
Benefits of Starting a Drop Servicing Business
The appeal of drop servicing lies in its simplicity and cost-effectiveness. All you need is a computer, internet access, and a knack for marketing. So, it requires a minimal upfront investment. Here are some of the benefits:
Low Startup Cost
Drop servicing is a business model with one of the lowest entry barriers. Since you’re selling services performed by others, there are no production or inventory costs. You simply set up a digital platform to showcase the services, and voila! You’re in business.
Scalability
The scalable nature of drop servicing is another huge plus. As your customer base grows, you can readily increase your capacity by hiring more service providers. No need for heavy capital expenditure or a larger workspace.
Flexibility
Operating in the digital realm gives you geographical freedom. You can run your drop servicing business from anywhere, at any time, as long as you have a reliable internet connection. So, it could be a good fit if you want to work remotely.2
Different Drop Servicing Ideas
When it comes to drop servicing, the possibilities are endless. But here are a few ideas to help spark your creativity:
- Graphic design: As a drop servicer, you can offer graphic design services, even without any design skills. You simply partner with talented freelancers who do the actual work.
- Copywriting: For the written word, you can offer copywriting services, bridging the gap between businesses in need of compelling content and freelance writers.
- Digital marketing: From social media management to email marketing, the digital marketing niche is a gold mine. You can tap into this market with freelancers.
- Video creation: With the rising demand for video content, collaborating with freelance video creators and editors can be a profitable endeavor.
- Search engine optimization: For businesses looking to boost their online presence, SEO services are crucial. You can collaborate with specialists to offer these services.3
Drop Servicing and TikTok
Social media platforms have become vital tools for businesses, especially for side hustles like drop servicing businesses. These platforms offer a vast user base, providing numerous opportunities for entrepreneurs to reach potential customers. TikTok, in particular, stands out as an effective platform for marketing and driving sales.
Recent stats show just how influential TikTok can be in driving consumer behavior. For instance, 67% of TikTok users say the platform inspired them to make a purchase when they weren’t intending to, and 74% of TikTok users say the platform inspired them to learn more about a business online.4 So, TikTok could be a useful tool.
Setting Up Your Drop Servicing Business
Starting a drop servicing business requires a few initial steps. For instance, here are some steps to help you get started:
- Choose a Niche: Your first step is to decide on the service you want to offer. Identify an area you have some knowledge in — be it graphic design, copywriting, etc.
- Find Service Providers: Once you’ve picked your niche, the next step is to find reliable freelancers. Platforms like Upwork are great places to start.
- Choose a Platform: Next, showcase your services on a platform like TikTok or a custom website. Make sure it gives enough information about your services.
- Price Your Services: You need to set competitive prices that cover the cost of the services from your providers and your overhead costs while still making a profit.
- Set Up Payment Methods: Finally, ensure you have a secure and user-friendly payment system in place. Look into popular payment platforms like PayPal.
The Bottom Line
Drop servicing can be an excellent side hustle for those looking to earn extra income. It offers flexibility, scalability, and low startup costs with plenty of potential for profitability. Whether it’s graphic design, digital marketing, or content creation, there’s a drop servicing niche for virtually everyone. Take some time to learn more about drop servicing and discover its full potential.