How to start a drop service business from scratch
We are going to explain how to start a drop service business from scratch.
Drop service businesses has been around since day one of business. Simply put drop service is another way of saying sub contracting. You get a client that requires a service and then sub contract the work out to freelancers while charging a premium on the sub contracting fee.
A drop service provider market and sells services that are fulfilled by another service provider.
Simple way to start a drop serving business
Firstly you need to decide which type of service you want to provide. Digital services are probably the best to provide as they can be fulfilled over the internet with little cost. A service you have some skills in will be easier to start than a service you have no experience with.
Identify which service you want to provide and find someone willing to work for less than you can sell the service for.
Set up a website or a landing page to promote your drop serving business and offer the service you wish to provide.
Check out our post on getting a web site.
Market your service to prospective clients.
Once you have a client, forward their requirements to your service provider.
Then deliver the service once your service provider has completed the task.
This is the very basic steps, but to be successful you have to be determined and prepared to put a fair bit of time into the business when starting out. Eventually you will be able to automate much of the business so that it becomes semi passive.
A bare bones approach to setting up a drop service business is to use your network to spread your news that you offer drop services. You can find both service providers and clients from your network.
Where to find clients
This is the golden question. Drop servicing is a B2B so you’ll be marketing to other businesses.
Starting out you’ll be marketing your service to everyone that requires your service. But where do you find these clients?
There are free options and paid options like Facebook ads or Google ads.
The free options are cold calls or people that have no idea who you are or the service you offer. Free options include forums, like Quora, Reddit or niche forums. You build your reputation by becoming the expert with all the answers on the forum and having people seek you out because of your expertise.
Another free option is to sign up to Upwork or Fiverr and sell your service as the freelancers you will employ to be your service providers.
An email list with interested people is one of the best methods of getting clients, as they have some idea what you are offering. How do you get an email list? One way is to do a Google search of businesses in your area, each business that shows up on Google search has a web site. Go to each web site and grab the email contact details and send them your best offer.
Paid advertising with Facebook or Google ads is a sure fire way of getting new clients, but could be costly. LinkedIn is another source of clients, set up your LinkedIn account and start networking.
Where to find service providers
There are many sources where you can get your service providers, such as Upwork and Fiverr. Other places to look are Freelancer, or white label service providers like SharpNET Solutions, 44i Digital, Digital Marketing Blueprint, ColorWhistle, WebEnertia, White Label SEO Lab, AgencyPlatform, Qantam Agency, Yourlabel.
You will need to research your service providers to be sure they are able to fulfill your clients requirements.
Vetting your freelancers to ensure your customers expectations will be fulfilled is crucial to your ongoing business.
Looking after your freelancers is also critical to building your drop service business.
It will take time, but building a good team will save you time and money in the end.
White label agencies are more stable than many freelancers you may hire, as it’s their business to provide services you are looking to market.
Pros and cons for freelancers
|Cheap||Quality of service|
Pros and cons for white label agencies
|Reliable service||Services cost more|
|Loss of control over services delivered|
Whichever type of service provider you use, you’ll be the place where the buck stops.
If your client is not satisfied with the service provided, your the one who’s necks on the line. This can be a problem as you will be required to either fix the issue or refund the clients money that you have already used for your service provider.
What to charge for your services
Generally drop service providers charge 2 – 4 times your costs, allowing for a healthy profit. Starting out you may charge a smaller margin until you become established and then increase your pricing.
Ways of increasing your profits is to offer a rush service with higher pricing, have 3 levels of service and to offer more services (up sell).
How much does it cost to start
You can start a drop service business for very little.
The minimum would be $9.95 for a domain name for a year from NameSilo. You don’t need a website from the start, you can make a internet presence with landing pages from several providers like Mailchimp.
Starting out you can provide the service yourself if you have the skills. Then when you have a client or two, vette some freelancers and start building your team, this will cost you whatever the freelancers you choose are charging.
Once you’ve got your freelancers and clients it would be time to get your web site from SiteGround for around $5.99 per month.
There are many free tools on the web for setting up business, some of these are discussed in our post free tools for POD
Are you ready to be a drop service provider? If your a good salesman, effective communicator who is organized, driven and self disciplined, your ready.
Drop services is a growing sector of the online business world that allows you to make a decent income which can be scaled once your established.
How to start a drop service business from scratch is relatively easy is if you have the characteristics outlined above.
You can start your drop service business for little outlay in money which can be leveraged into a healthy profit.
Your next step is to execute your actions and apply your skills to your new venture.