Drop Servicing For Beginners (The Complete Guide) 2023
If you want to make a solid income online, even if you’re an absolute beginner getting started from scratch, read this article because today, I’m going deep into what is probably the best business model out there. Drop-servicing. I will tell you what it is, why you should do it, and how you can start from absolute zero. I’m answering every question and covering all bases. By the end of this article, you’ll know everything there is to know to start making your first sales online.
And if we haven’t met before, I’m Dylan, and I’ve built multiple successful drop-servicing businesses. Suppose you have met me before. You’ll know that I’m always showing you guys my results to prove to you that it works. But today is all about giving you what you need to know to get results like I do.
Now, let’s answer the first question you might ask. What the hell is drop-servicing? Putting it simply, drop servicing involves selling high-quality services to businesses and hiring a skilled freelancer from a lower-income country to do the work for you. Since you’re paying a low rate for a high-quality service, you’re able to achieve high-profit margins on your service sales.
For example, let’s say someone hires my business to edit a corporate video, and I charge them $200 for it. I paid an editor in Morocco $75 for the video. I pocket $125, and the editor in Morocco gets paid a damn good wage for their work. And it also saves the business a headache because finding decent freelancers is a pain in the ass. I’m like a quality control middle man and in the end, everyone’s happy. Another cool thing about drop servicing is that you’re able to leverage the time and location freedom to sell businesses the services they need while making a nice profit for yourself.
And the setup costs are next to nothing. You don’t even need to pay for office space equipment or hire employees like conventional businesses do. It’s super lean, with a crazy high-profit margin and plenty of demand for your services.
Now, when I say drop servicing to most people, they think I’m talking about dropshipping, which I’m sure you’ve heard about. But they aren’t the same, so let’s clear this confusion up once and for all.
Dropshipping is similar, but instead of selling services, you’re selling products like smartwatches and clothes. With drop shipping, you take a customer’s details and give them to retailers that can fulfill their orders. They then ship the goods directly to the customer. You’re still a middleman with both. But just to be straight with you, drop servicing is better for loads of reasons you’ll learn throughout this article.
It can be a bit confusing when drop servicing is referred to as subcontracting or outsourcing. But those terms are usually referring to big companies outsourcing certain aspects of what they do. But with drop servicing, it’s the entire business. So, to wrap things up – the definition of dropshipping is selling a product manufactured and delivered by a third party for profit. Drop servicing is selling a service, such as writing animation or design, produced and delivered by a third party for profit. Simple.
Here’s another thing you need to know as the middleman – your main role in the whole deal is to build the system that finds clients. That’s the work. And as clients come to you, you sell them the service at a price high enough that you make a significant profit.
For example, John is the founder of a health supplement affiliate website, and he’s looking for 15 x 1000-word articles about magnesium or omega-3 or whatever. I obviously don’t know many supplements, but you get the gist. Now John goes to a content writing company for the job. But at the rate they charge, he’d practically need a 2nd mortgage.
They’re charging around $100 per 1000 words. John is screwed. But here you come, swagging along with your grand spanking new drop servicing business, and you offer your article writing service for $50 per 1000 words. John is over the moon. You then hire a freelancer from Upwork or Fiverr or the mean streets of Manila to write articles for $20 per 1000 words. This means you’re profiting $30 per article, and the total cost for John is $750.
Your outsourcing cost is $300, and your profit is $450. That’s a 60% profit margin. And that’s pretty low compared to most craft servicing businesses. Really, the sky is the limit. As you can see, it’s high-end and super lucrative. And can you imagine if you scaled that bad boy? Pretty exciting. And that’s one of the many reasons why drop servicing is king.
By now, you should have a general overview of the basic principle behind Drop Servicing. This business model can be used for content writing, design, video animation, lead generation, copywriting, and essentially any service that can be delivered over the Internet.
Now I know earlier I said that there aren’t any start-up costs, really. And that’s true. I wasn’t pulling your leg. But as with every business, the more firepower you’ve got in terms of money and resources – the easier and quicker it’s going to be for you. More on that later.
Not only are there no startup costs, but you actually don’t need a hell of a lot of stuff in general to start a drop servicing business. If you wanted to be a total minimalist about it, all you’d really need to get started is an email address since your role as founder is to communicate between your clients and your team. Luckily, email is free.
Yes, you can get started using just email, but you’ll need a website in the long run. Having the basics of a business makes you look more professional and trustworthy. You can build a website using WordPress with a plugin like Thrive Architect and get hosting from a site like Dreamhost. Dreamhost and other website hosting platforms give you the option to use an email address with your business name. Way more “profesh.” And if you suck at coming up with names like I do, you can use the Shopify business name generator.
Even if you start hitting home runs and making sales without the website, you will eventually need one just to help you automate your business. A pro tip is hiring a project manager to automate communication between your team and the client so you can achieve 100% automation. And that’s made possible through software and people taking the work out of your business for you. Goddamnit, I love the internet, don’t you?
There’s no easy way to put this – in the beginning, you might run a lot of the things in your drop servicing business yourself. But that’s handy because keeping your business lean means you can keep all of the profits for yourself. Over time, you can automate your business until, eventually, it’s running smoothly without you. And that’s when you can chill and spend your time sipping Mai Tais on a beach in Bali because you’ve nailed it.
Now, onto another big question. What service can you deliver? Simple. Any service you can find freelancers for online. And the simpler the service you offer, the easier it is to automate the process. Let me stop teasing you and tell you straight up what the best drop servicing business ideas are.
- For creative stuff you’ve got illustration, graphic design & animation.
- For writing, you’ve got things like editing, proofreading, blog writing, copywriting and technical writing.
- Then, you’ve got your sales and marketing services like search engine optimization, SEO lead generation, social media management, market research, email marketing, and so on.
These are hands down some of the best ideas that you can use right now.
Remember, the simpler, the better. Don’t overcomplicate it.
But where do you find people to hire for your drop servicing business? The best place to find drop service freelancers is a website like Freelancer, Upwork, or Fiverr. Links at the bottom. These have a ton of freelancers to choose from, and you can view their profiles, testimonials, etc. Another tip is to create a specific job posting and let the freelancers come to you. Fiverr and Freelancer are cheaper, but you have to make sure that whoever you’re hiring does an excellent job. Sometimes, you really get what you pay for. Upwork is better for finding high-quality freelancers but is a bit more expensive. Totally worth it, though.
As a beginner, Upwork and Fiverr are your best bet. You’ll find everything you need. Just make sure to review a freelancer’s profile feedback and ratings and the number of years of experience they have. Focus on high-quality reviews and look for someone who replies quickly in a professional manner and is enthusiastic about helping you. After hiring a ton of dodgy freelancers, trust me on the enthusiasm bit.
Now, don’t rush the hiring process. You’re not just outsourcing a bit of work to freelance guys. You’re building a real business with a real team that’s going to be working with you for years and years. Play the long game and play it with long-term people you can see yourself working with for the long term. That’s how you build a real business.
But hiring cheap freelancers is only part of the equation. Drop servicing is insanely profitable if done right. And by that, I mean your service has to be top-notch. If a customer has a bad experience with you, they won’t come back. And repeat business is where you can make a lot of money. For example, I get a 30% repeat rate with one of my drop-servicing businesses. For those who aren’t in the game, that’s pretty damn high. Clients may need your services consistently, but they will if you give them a reason to look elsewhere. If your service is good, your business just ends up snowballing over time. You get more and more clients.
Some of those clients stay with you—your rate increases. The profit takes off. It’s a beautiful feeling. But is drop servicing worth it? As crazy as this sounds, people ask this question. You already know what I’m going to say to this, but just in case you aren’t convinced, drop servicing is king because you don’t need specialist knowledge or skills. A beginner can make a solid income without learning copywriting or design. For god’s sake, a kid fresh out of high school can theoretically end up making as much as a doctor. And many are. It’s ridiculous.
A lot of people at this point are like, “Yes, Dylan sounds good, but I’m not the entrepreneurial type. I can see how it might work for other people, but not for me” And to that, I call straight bullshit. I’ve got a ton of results from ourselves and our students to prove that wrong. You absolutely can do it. I was far from a straight-A student. I’m not naturally gifted or talented. And yet, I made it work. Other successful drop-shippers are people in full-time education, mothers, fathers, seniors, and young people—tons of different backgrounds. If there is demand, then supply will make a profit. And do you really believe that it’s beyond your ability to create some supply and get paid for it? Absolutely not.
And you know what? I’m going to be honest with you for a moment. What else would you spend your time doing? Work your ass off, get a degree, get a job, and then be happy? How many people does that actually work for? No offense to you if you’re working a job you love if it’s a 9 – 5. But for most of us, the game is rigged and not in our favor. It’s made most people into wage slaves with no freedom or autonomy whatsoever. That’s another reason I’m so passionate about this. It frees people from a kind of prison they don’t even know they’re stuck in.
When you go from living life under the thumb of your boss to a life of total financial, location, and time freedom – you’ll think you’ve landed on another planet. It might even be a bit scary because this level of freedom isn’t something we’re used to. But on the other side is a life lived entirely on your terms. Nobody else’s. And that’s a life you’re not going to feel like you’ve wasted at the end of it. So come on. If you’re absolutely happy where you are, click on this video.
I’m genuinely happy for you. But if you’re sick of feeling small playing life on the defense, then for god’s sake, stop letting your bullshit beliefs and negative thoughts make you feel like you can’t do it. Because you can. I know this got a bit serious, but I can’t just let people sit there living lives they hate without getting passionate about it. And the crazy thing is – building a life of freedom through a drop servicing business is nowhere near as hard as the 9 – 5 path laid out for you. Not even close.
Okay, so assuming you’re still with me and you’re serious about making this work – or at least curious – let’s get back to drop servicing because there’s more stuff you need to know.
Now, you might have wondered at some point – why would these companies work with you? Why wouldn’t they just hire the freelancers themselves, seeing as that’s all you’re doing? It’s a legitimate question, and I’m glad it gets asked—a few reasons.
1: Cost. A lot of service providers charge crazy rates to businesses. If you’re able to provide a similar service at a similar level of quality but cheaper, they’ll go with you.
2: Laziness. I’m dead serious. You might think that a company will just go to a freelance site, but most of the time, they don’t. It’s just a pain in the ass for so many people to sift through the sea of freelancers to find a good one. A bunch of clients of mine said to me, “Hey, I tried Upwork, and it didn’t go well & I want to work with you instead” – The fact is, companies prefer to work with other companies because it’s way less of a headache.
3: Necessity. Many companies have a dedicated budget for these types of services every quarter. They need to spend their budget, or the boss will take it away from them. Great for us, right?
4: Safety: For a legitimate company, other companies seem more trustworthy. Companies delivering services have proven systems and processes that give the customer certainty, reliability, and consistency. Companies are willing to spend the money on that.
Now, if you’re a marketing geek like me, you might wonder how big the drop-servicing market is.
And this is a fun one to answer because it’s gargantuan. I almost never find an opportunity to use that word in a sentence, so I’m pretty happy about that. And it’s a good word to use because the US business services sector consists of about 410,000 establishments with combined annual sales of around $770 billion. The market is around $1.2 trillion, with estimates of up to $5 trillion when including stuff such as the market share of unlisted companies. So yeah – there’s no shortage of opportunity to get a slice of this money flying around. Just by positioning yourself in the right place and providing a valuable and competitive offer – you’ll take your slice of it. And that slice is more chocolate gateaux than you’ll ever need.
But is drop servicing just a flash in the pan? You don’t want to fly your flag on a sinking ship – so what’s the future of drop servicing?
Good news. It’s going nowhere. Here’s why. Companies are incentivized to maximize profits. That’s pretty much a law of the universe at this point. And one way they’re going to keep doing that is by minimizing their costs. Now, the world is rapidly moving online. As it does – companies are transitioning to online services because it saves an ungodly amount of money. We already see this happening, and it’s a pretty revolutionary shift. But it’s only just getting started.
Now, the million-dollar question – how do you get started? There are six steps for building a Drop Servicing business:
- Step one: pick a service & do your research
- Step two: find teams that can deliver the service at a cheaper price than your competition.
- Step three: create a compelling offer.
- Step four: build the marketing channels to bring in new customers.
- Step five: automate the entire process.
- Step six: scale.
Let’s dive into each of these steps right now.
Step 1: pick a service & do your research
The first thing to do is choose a service. Focus on one service or variations of one service. You don’t want to spread yourself too thin. Things can get overwhelming fast if you do that. Focus on one thing, like writing or video editing. You can even focus on a more specific niche like copywriting or content writing if you want to give yourself a bit of a competitive advantage.
Now, you don’t want to go in blind. That’s why doing a competitor analysis is important to understand what’s working and why. All you need to do is search for the service that you’re providing on Google and type the service. For example: “content writing service,” “proofreading service,” “logo design service,” etc. Create a big list of your competitors.
And then, from there, we can ask a few questions like:
What are their prices? How do they structure the offer? What pain points do they focus on for their customers? How are they marketing their services? What’s the traffic like? Where is their traffic even coming from?
Once you’ve answered those questions, it helps to find the top freelancers in your niche. Once you’ve done that, ask these questions:
How do they position themselves? Who are they working with? Who has their biggest projects?
By this point, you should have a bit more of an idea of what you’re doing. You’ll like this next bit. It’s time to figure out your profit margins. To figure this out, take a competitor’s price and subtract the average freelance price. For example, if a competitor’s price is $5,000 for a website and your freelancer’s price is $1,000, your potential profit margin is $4,000. And maybe you charge less than your competitor by $1,000 for the same quality website. You’re still getting $3,000 with only $1,000 invested into your freelancer labor. And that’s still pretty insane profit margins. Feeling motivated yet?
Step 2: Find teams that will beat your competitors’ prices
Now, you need to gather the A-team. I’m probably showing my age with that reference, but I don’t care. Mr. T is a G. But how do you build a drop servicing team? Well, firstly, you want to hire freelancers on a per-project basis instead of hiring them as employees. This is because you don’t have any clients yet. It would be quite risky to hire them on an ongoing basis.
So, using the websites I mentioned earlier, like Upwork and Fiverr, gather a list of freelancers you can turn to consistently. And when you close a client, commission the freelancer by paying a fixed price for the project after you get paid. Bam.
Step 3: Craft a compelling offer
Now, we want to make them an offer they can’t refuse. Make your service appealing to who you’re providing it to. Make sure you’re offering real tangible value and solving a direct problem in your offer. Make it tangible by including packages, pricing, features, and benefits. Tell them precisely what you’re selling and why. For example, a copywriting service to help health coaches get more clients from their website is WAY more appealing than just a “writing service.” … do you catch my drift?
Step 4: Build marketing channels to bring in new customers
By now, you’ve done your research; you have your service and team to deliver it. You’ve crafted a compelling and appealing offer. Now, you need to get it out there. For this step, we’re going to choose our marketing channels. We have outbound, paid, and inbound marketing channels. With outbound, you’re going to reach out directly to people who don’t know you and pitch them your offer. You’ll reach out to Facebook pages, LinkedIn profiles, Instagram accounts, etc, with cold emails and DM’s.
I recommend starting with free outbound cold messaging to start with if you don’t have a ton of money to invest. Although if you do, you’ve got your paid channels. These are things like Google Ads, YouTube, LinkedIn, and Facebook Ads. These are best if you’ve got money to invest but not a lot of time.
And lastly, the third set of marketing channels is Inbound Marketing channels. This includes Search Engine Optimization, Social Media Marketing, Partnerships, or Affiliates. These take a lot of time to work, so I recommend implementing them last. But that being said, they’re pretty damn powerful and useful ways to get a lot of traffic to your offer.
Step 5: automating the entire process
By this point, you’re reaching out to your target demographic with your offer and getting a few sales. Your freelancers are doing work for you, and your clients are happy. The only problem is – you’re handholding and overseeing every step of the process. Pretty stressful. You got into this to be accessible as a bird, so let’s make that happen by automating the process from start to finish. This is all about hiring an entire drop servicing team, which you can now do because you’re making enough money to afford it.
Well, what exactly would a fully automated drop servicing team look like? To give you an example, you’d have a lead generator to do outreach and bring people in. You’d have a salesperson to manage the sales funnel and make sure those leads convert into paying customers. You’d have a project manager to automate client and delivery team communication. Once you’ve got a team together, you need to make sure the cogs are turning smoothly.
There are a ton of great tools out there for managing your drop servicing team. One is called HubStaff, which gives you screenshots of their work and activity times to see how much they’re really working and so on. Another couple of tools to help your team automate their outreach and sales processes are Woodpecker and Snovio. Once you’ve found good people and everyone knows what they’re doing, it’s time for a very fun step.
Step 6: scale
You’ll love this question. How do you grow from $0 to $10,000 per month? The answer to that is simple. Make more offers across more marketing channels. That’s it. By this point, you’ve proven that what you’re doing is working. You just need to ramp it up and do more of it. Now, automation came before this step because to scale, you need to be able to handle all that new business.
If 100 people showed up at your door right now asking to buy from you – you need to have the systems in place to be able to handle it. This is why I recommend testing and optimizing your automation process before even thinking about scaling your services. You also need to be making a tidy profit already because scaling your business will cost money in people and software.
When you make a big push to scale your business, you might initially take a hit in profits. But it’s like what grandma used to say. You can’t make an omelet without cracking a few good eggs.
Those are the six steps. Now, here’s something I’m quite proud of. In the course I sell called drop servicing blueprint, we have a module where we build a brand new business from scratch and screen record every step of the process. It’s awesome. I’m saying this now because the above steps can seem pretty daunting. But I promise you it’s simpler than it seems, and we show you why.
Now, there’s a question that you will almost certainly ask in your drop servicing journey.
“Dylan, how the hell and where the fudge do I find people who will pay me lots of money? Isn’t everyone broke?”
There’s a simple answer to this. Cold email the people with the power. Those people in a company or business who have the ability to make decisions. It’s way cheaper than paid advertising. A golden tool for this is LinkedIn Sales Navigator. It’s honestly brilliant. You can customize your search to find the decision-makers of pretty much any company you want. You can search people based on their job titles, the business they work with, company size, and other helpful stuff.
This will help you create a custom list of potential customers you can message directly over Linkedin. For example. If you type in “founder,” then company size “one,” then search term to “agency or design agency” from countries like “US” or “Canada,” you will find a pretty decent list of potential customers. And then, you can set up campaigns with cold email templates that you can test and optimize over time.
In fact, while we’re on the subject, let’s talk about cold emails for a moment because you’ll absolutely need this to get responses and make your first sales. One of the biggest issues you’ll run into if you aren’t careful is your emails going to spam. You’re going to be sending an absolute shed ton of emails, so it’s crucial to warm up new email addresses. You shouldn’t create an email address and start sending hundreds of emails.
They’ll just end up in spam country, and your address might get blacklisted. Two things to do to avoid this happening. 1) make sure to set up an email address that’s attached to your website domain. It just makes it look way more legitimate to an email server. And 2) warm up your email address. You can use a neat little tool called warmupinbox.com to warm up any new email address so it’s more trustworthy.
Theoretically, you know enough by now to get started. There’s still a lot more to get to grips with, so the next question is, should you take a drop servicing course?
And in case your eyes are rolling so hard they might fall out, I know I’m biased. I am selling a drop servicing course. But there’s a reason for that. Instead of spending months trying to figure out what to do and how to do it, you can take the course and have it figured out way quicker. You’ll run into a ton of roadblocks along the way that the course will help you with. And even if you can’t get an answer from the course (not likely), a community and coaches will help you out of a jam.
The drop servicing blueprint is hands down the most comprehensive drop servicing course available. And it works. That’s not just me blowing smoke. That’s based on the results and comments of my students. What they’re achieving right now is pretty crazy, but no surprise at all. If you want to go it alone, that’s no problem. Just keep watching my videos, and they’ll help. But if you ever want to take things to the next level and start building a life of freedom, the course is waiting for you. Click the link in the description to learn more.