One of the latest methods you can use to earn money online is drop servicing. Whether you’ve heard it or not, you’re probably in this article because you want to know how drop servicing works and how you can make money from it. That’s precisely what I’ll cover in this article: drop servicing for beginners.
I will start by explaining what is drop servicing and how it works. Then I’ll show you the steps you should take as a beginner so you can earn some online income from drop servicing.
Before I begin, some of you may be familiar with dropshipping. If you are, then you probably already have an idea of what drop servicing is, and you’re here to learn more about how exactly it works. If you have no idea what drop servicing is, it might help to understand the concept of dropshipping first. So I recommend you look over my dropshipping for beginners article so you can learn dropshipping before you learn drop servicing.
And with that being said, let’s go over everything you need to know about drop servicing!
What Is Drop Servicing?
Definition of Drop Servicing
In a nutshell, drop servicing is selling a freelancing service that you pay from someone else and return to your customer for profit. If you’re not familiar with freelancing, it is simply a fancy term for selling services to others on a specific website like Fiverr. For more information, you can consult my freelancing for beginners article.
Basically, drop servicing is similar to dropshipping. The only difference is that, instead of selling someone else’s products, you’re selling someone else’s freelancing services. Let’s take an example to make sure you understand how it works.
How Does Drop Servicing Work? (Example)
Let’s say John needs to have an article written for his blog. He is not very good at writing and grammar, so he decides he should assign someone else to do the writing. So, he goes online to Fiverr and notices that Sam is offering a blog article of up to 1,000 words for $30. John knows that’s a lot of money, but he understands that it will be professionally written, so he goes ahead and pays Sam to write him a 1,000-word article.
Sam receives a notification that John is purchasing a 1,000-word article from him. He then turns around and relies on his favorite freelance writer, Jane, to write him an article of 1,000 words. She is his favorite because she offers to write a good 1,000-word article for only $18. Sam pays her and, in a few days, she gives Sam the completed article.
Now Sam goes back to John and gives him the 1,000-word article he asked for. John is satisfied with how it came out, so Fiverr gives Sam the $30 payment from John, the price that Sam sold it for. In the process, Sam became the middleman, taking advantage of Jane’s service to fulfill John’s needs. And, he earns $12 profit ($30-$18=$12).
This whole scenario is known as drop servicing because Sam was selling a service that Jane provides, and Sam earns profit, the difference between the amount he paid and the amount he sold the service for.
Steps to Drop Servicing
Now that you have a better understanding of drop servicing, let’s talk about how you can get started. I will go over each step, assuming you’re a complete beginner. Here are the five steps you will be learning in order to start drop servicing.
- Join a freelancing website like Fiverr so you can sell the service.
- Find a reasonable seller who offers good services at an affordable rate.
- Sell at a higher price to make a profit from connecting your customer to the seller.
- Keep communication and understand your customer so you can pass the information to the seller.
- Offer additional tiers where you find similar sellers and make additional profit.
Step 1: Join a freelancing website.
Create An Account
Obviously, the first step is to create an account where you will be drop servicing. This is going to be on any freelancing website such as Fiverr or Upwork. You can find my list of freelancing websites here for some ideas.
Whatever website you choose, go ahead and create an account. They will ask you for some personal information as well as details about your work experience, profession, and education. Since you’re not the one selling your own services, it is best to keep these details as brief as possible. Be honest with your education and experience, but you should also include the services you plan to sell from someone else.
Include Important Details
Make sure to avoid using the first person when describing your services since you are not the one providing them. For example, instead of “I am able to do X, Y, and Z”, phrase it as “I specialize in/offer the following services: X, Y, and Z.” By using the latter statement, you are avoiding responsibility for the services you provide.
Finally, in your account, make sure you add a disclaimer that your services are not your own. This is important because you are legally responsible for any transactions you make online. You need to inform those who read your details that the services you offer are those of someone else and not of your own. This way, if someone goes wrong, the one who actually did the service is held responsible instead of you!
Here’s a sample drop servicing disclaimer:
“Disclaimer: The services I sell are not my own. Any service that I sell is provided by a third party and then passed on to you, the customer. By purchasing one of my services, you acknowledge that I will not be held responsible for the quality of the service that you will receive. Please contact me if you need information about the third-party provider of any of my services.”
Step 2: Find a reasonable seller.
Now that your account is set up, it’s time to find the sellers from whom you will get your services done.
It’s best to pick a service that is not too complex or difficult. That way, you have a better chance of giving your customer the service that they expect. Go for simple services like writing, video editing, voice acting, and graphic design, that require basic skills, instead of complicated services like programming or writing an entire book.
Once you select the service you want to sell, find the right seller for the job. There are many sellers that are vying for your attention, so you might want to keep these pointers in mind when picking the right seller:
- See if they have good reviews. Make sure that many customers are leaving positive feedback for the seller. It is best that a seller have an average of at least 4.5 stars.
- Check if their prices are fair. Ideally, you want a seller that keeps their prices reasonably low. A good rule of thumb is to find sellers who price their services between $10 and $30.
- Look over the fine details. Read the description of the services they offer from beginning to end. By doing this, you will know how to accurately list the services you will be selling.
- Try them out for yourself. Buy a service from the seller and see if they’d be a good fit for your drop servicing. Not only that, you can use the service you receive from them as a sample file for your listing.
Remember, once you find the right seller, be sure to save their listing either in your freelancer account or as a bookmark on your browser. You will be going back to their listing once a customer purchases from you.
I recommend you start out drop servicing with just one seller. Once you master drop servicing, you can include services from another seller or two. So start small, then grow big.
Step 3: Sell at a higher price.
Add Your Listing
After you find your seller, it’s time to set up your new listing. Thankfully, most of the information you need for your listing is in the listing of your seller. However, do not copy the listing word for word. Restate the listing of your seller in your own words, including the title and description.
For example, if someone titles their service, “4 Reader-Friendly Blog Posts with 1000 Words Each”, you would rename your listing to something like “4 Readable 1,000-Word Blog Articles.”
Price It Reasonably
When you list the price, it’s time to go higher than your seller so you can make a profit. Obviously, you don’t want to list your price too high. A good rule of thumb is to keep your selling price no more than double the price of your original seller. So, if your seller offers video editing of 20-minute clips for $20, a good price range for your listing would be between $20 and $40.
Decide what price in the range is most reasonable based on the quality of service your seller will be providing to your customers. This is another reason why I suggested in the previous step that you sample your seller’s service so you can get an idea of how well they perform it.
Afterward, review your listing and make sure it is appealing to potential customers. Then go ahead and publish it.
Step 4: Keep communication.
Communication is important when it comes to drop servicing. You have to make sure that you understand your customer’s expectations as best you can. That way, you know what to tell the seller (service provider) when it comes time to buy from them.
Ask What the Customer Wants
Once a customer buys one of your services or asks you about it, reach out to them. Every freelancing website has a private messaging feature where you can have a one-on-one conversation with them. On both Fiverr and Upwork, you can find it in the Messages section at the top of the website.
If a customer messages you about the service, make sure you ask for any details and build rapport with them. Here are some tips.
- Thank them for showing interest in your service.
- Explain to them what they can expect from the service.
- Ask them what they want to accomplish with the service.
- Tell them to let you know if they have questions.
If the service requires certain files from a customer, be sure to save them on your computer to take to the seller. Or, if they didn’t provide their files yet, kindly ask them to do so.
Message the Seller
So, you have a clear idea of what your customer wants. It’s now time to pass this on to the seller so you can get the service done for your customer. You could try to select the seller’s package that best suits the needs of your customers, but you’d be even better off by messaging the seller about it.
When you message them, it’s best to pretend to be a customer. However, don’t demand that all the requests be met. Simply ask if it’s possible for it to be done. If so, great. If not, just understand and be okay with it. It also wouldn’t be a bad idea to inform your customer if an important request they asked from you cannot be met.
Deliver the Service
After the seller completes the service for your customer, take a quick review to ensure that the service was completed to the customer’s expectations. Talk with the seller about any major changes that need to be made. If there are only minor goofs, they can be ignored.
Then, deliver the completed service to your customer. Ask them what you thought of their end result and make sure to address any problems the customer may have. Congratulations, you just completed a drop servicing transaction! Make sure to look over the freelance site’s payment articles for info on how and when you get paid:
Step 5: Offer additional tiers.
Once you get a few drop servicing sales, it’s time to take it to the next level and add more tiers to your listing. You’ll need to find other sellers that offer the same type of service but in different ways. Then create each of your tiers, pricing them a little higher than the seller you are paying.
Keep in mind that you might need to reach a certain level as a freelancer before you can start offering tiers to the services you are selling.
Find Other Sellers
Remember, in step two, I showed you how to find a seller that provides the service you want to provide. I also gave you these tips on picking the best seller:
- See if they have good reviews.
- Check if their prices are reasonable.
- Read the description of their services from start to end.
- Ask for a sample file to see their work for yourself.
Follow these tips again as you look for other sellers. Remember: the seller needs to offer the same type of service you are providing. The only difference is that they should offer it a little differently. Here are two examples:
- If you are offering article writing and have a seller who writes 1,000-word articles, find a seller that can write 1,500 words or 500 words.
- If you are offering video editing and have a seller who edits 30 minutes of video, find one that can edit 15 or 45 minutes.
For every new seller you find, make sure to save them in your bookmarks so you can refer to them again later.
Keep in mind that every new seller you add to your drop servicing gives you more responsibility. Make sure you are ready to keep yourself busy communicating with the sellers effectively so your paying customers are not disappointed. I recommend not getting involved in more than three sellers.
Add the Tiers
Once you have your sellers in place, you’re ready to add tiers to your listing. Again, make sure that the information you give about your tier accurately reflects what your seller provides. That way, your customer’s expectations will be met.
Each tier you add needs to be priced a little higher than what your seller provides so you can make a profit from your drop servicing work. However, do not price your service too high as that can discourage your customers, so always price fairly.
If you need help figuring out how to add tiers to your gig, here are the help articles you need:
- How to use Fiverr gig extras
- How to create an Upwork project and add tiers (see step 4 for tiers)
Conclusion
And that’s it for drop servicing as a complete beginner. As you can probably tell, it does take some patience and dedication, but at least you don’t need to do any of the hard work. You just have to make sure that the sellers you are working with are meeting the expectations of your customers. It will take a lot of practice, so I recommend mastering with one seller before adding tiers and getting another seller or two involved.
Drop servicing may not be the best for you, especially if you’re bad at management. You’d run the risk of picking the wrong sellers and losing out on customers. So, I’d recommend you do the service yourself as a freelancer. I wrote an article on how to make money as a freelancer that you might want to check out.
Lastly, there’s more than one way to make money online. You don’t need to do freelancing! From selling stuff through affiliate marketing to taking surveys that give you extra cash, you’re sure to find a way to make money from home that suits you best. So, be sure to look around my other articles.
Thanks for reading and all the best to you on your online money-making journey!