What is Drop Servicing?
What is Drop Servicing
What Is Drop Servicing vs Drop Shipping?
So you’ve probably heard of drop shipping, but what about drop servicing? Drop shipping is making sales for products that are then sent directly from the producer to the consumer. That way, you as a seller just take a cut with no physical management.
Now, more people are turning their attention to a similar model, but instead of reselling products, drop servicing resells online services.
Why is Drop Servicing Attractive?
Physical products tend to be one time sales or impulse buys. Subscription physical products tend to be limited to consumables like magazines and cleaning products.
Now you don’t have to sell a service as a subscription and there are definitely some consumers that only require a one time purchase.
However, there are many more services that meet a recurring need and lend themselves to subscriptions. Look at the success of Design Pickle for graphic design and WP Curve for WordPress maintenance.
As a reseller you can build Monthly Recurring Revenue, MRR, and what would have been a one time profit can extend months and years into the future.
With a bit of effort,
you can be making extra revenue for your business quickly
using a good drop service provider.
Who is Drop Servicing For?
Let’s be clear here. We’re not suggesting you suddenly pop up a reseller brand for every digital marketing service out there – absolutely not.
What we’re saying is…If you have an existing audience and a defined market, then you are very well positioned to add to your offerings and benefit from increased revenue with a very short set up time.
For example, If you’re a website developer you know code. Inevitably your customers may need advertising. Rather than try and build an Ad agency from scratch, you can leverage existing qualified service providers and white label these services to the consumer.
This is all about reselling other services to your paying customer. You will be dealing with the marketing, sales, and customer relationship – If you already have these in place, then you are in a perfect situation to take advantage of reselling digital services.
What Can I Sell?
The short answer is – any digital service that has demand. You are taking advantage of someone else’s skills to solve a problem. It just needs to be an online service that fits with your current market.
Example Of Services To Resell
- Photo editing
- Content Writing
- Video editing
- Online advertising (Pay Per Click + Facebook ads)
Are Some Services Easier To Sell Than Others?
In addition you’ll be better served by reselling services which which have a clearly defined scope.
Right now, the whole world is in need of written content in the form of blog posts…Great! Then you start to resell well written content to your clients. Quickly you realise that a “good blog post” is pretty subjective.
There are so many different criteria that may or may not work. This means you could easily spend a lot of time going back and forth between your provider and your client trying to iron out irritating and time consuming details.
A much better idea is to resell something more generic. Simple logos and video editing are much easier to resell because you take existing content from the client and simply improve the quality of presentation.
How Quickly Can I Take Advantage Of This?
If you already have existing clients and good relationships, then really you should make the most of your customer base and expand your revenue streams. If you are smart with your choice of drop service, then you could make some extra recurring revenue in a matter of days.
The right sale to the right customer is a win for everyone involved.
If you are a business coach, a digital marketing agency, or a supplier to either of these, then you should really put some time and energy into talking to your existing clients to see if there are more ways you can help them.
Should I Hire A Freelancer Or An Agency?
This is a big question – and one you shouldn’t skip. The real question here is about your time and energy. Generally, you can hire freelancers at a cheaper rate than agencies.
The issue with freelancers is that you are going to be hiring and testing and training extra staff – so you are effectively building a new department in your business. This is fine if you have that time and energy, but if you are simply looking to expand sales for your current market, this will be a time consuming way to make those extra sales.
Agencies, on the other hand, are generally a bit more expensive, but they have already done all the heavy lifting on hiring, training, and quality control.
Your biggest problem on offering any new line of service is going to be service quality issues. If your goal is to just add some extra revenue with minimal fuss, then a well-priced agency with regular customers is the sweet spot.
What Are The Risks?
This is very simple – low quality service providers. Low quality service providers create customer service problems which in turn defeats the idea of low friction upsells.
All you need is one single unreliable freelancer to go silent or not respond to an after sales query and suddenly what looked like a nice quick sale…Just turned into a nightmare.
You can’t succeed on this without quality services at an affordable price- it all stems from that.
How Do I Work Between My Client And The Service Provider?
As a reseller you want to make any feedback or changes or customer service interactions as smooth as possible. Serious agencies that are ready to be whire-labelled will often have a reselling system in place for this.
We are currently using Service Provider Pro. This allows your client and service provider to interact smoothly, removing the need for you to be constantly playing middle man. After getting a great service provider, you’re going to need a good system for passing communication and files between provider and end purchaser.
This is the basic structure provided by Service Provider Pro. We’ll be going into more detail on this at a later date.
Service provider, reseller and client are all linked together in one easy system, meaning no one needs to spend all day firing emails back and forth.
We have found this to be a complete game changer in providing our video editing services to clients who regularly white label our unlimited packages.
What Kind Of Profit Increase Can I Expect?
We deal with resellers who are adding 35% to their bottom line by adding well chosen services to existing clients. This is not a rule, but it is a fair number to expect if you are fitting a well chosen offer to your existing clients.
So What Is My Next Step?
Here is a simple 5 step process to get your drop servicing offer making you money:
Examine your existing sales from the last 12 months. Are there any obvious upsells in common?
Share the topic with people in your network who may be able to help you decide on what to offer – sharing ideas and bouncing off others is never a bad thing!
Contact your new provider. Discuss all options. Make sure their offering is clear and that you have a system and an understanding in place.
Make your offering as clear and simple as possible.
Outreach to your clients and sell!
If you want some guidance on ideas for good services, drop us a message. If you want to understand how to resell video editing take a look at our explainer video.
If you have questions, drop us a comment.
We’re experienced service providers and are happy to answer any questions you may have about drop servicing or reselling online.
Check out how we hand drop servicing here.