How to Start a Drop Service Business: The Complete Guide for 2023
aroundknowledge.co.id – If done right, drop service can be a very profitable business model. You can manage your team behind the scenes to serve your customers without touching execution details.
Whether you know it or not, we are surrounded by drop services big and small. Here are some common examples.
- Hire a pest control service to send a freelance representative to your home to treat pest problems.
- Hire a social media marketing company that outsources day-to-day management to freelancers or other agencies.
- Purchase digital downloads from companies that originally licensed content from freelancers.
What exactly is a drop service, how does it work and how can I get started? That's what we're going to dig into.
What is Drop Service?
Drop service, also known as service arbitrage or white labeling, is a high-profit business model in which companies sell services to customers and then hire cheaper freelancers or agencies to complete work.
Basically, the drop service company acts as the point of contact, being the main point of contact for their clients while their freelancers or agency partners do the work behind the scenes screen.
For example, you own a graphic design company. You sell a branding package for Rp. 45 million. Instead of doing the work yourself, you hire freelancers for Rp. 30 million for the branding package. This means entering Rp. 15 millions into your pocket on trading.
Some drop service providers prefer to keep this private, and some make it clear to their customers that they have a team they manage.
How to Start a Drop Service Business
Not sure how to start your drop service business? We will help by sharing the way or steps you have to do.
1. Choose Your Market Niche
First things first: What services will your business build? As previously discussed, there are many options. Creativity is the limit in most cases. If you don't have a prominent instant drop service niche, ask yourself a few questions.
- Do you have an idea that I already know and am good at?
- If not, which idea did you find the most learnable or interesting?
- Which idea seems the simplest to get up and running?
- Which ideas are most in demand or needed in the market?
- Which idea will provide the highest profit for our company?
There are many paths to take when choosing a niche. Think about what means the most to you and use that as a basis.
2. Find and Train a Team of Service Providers
It may seem like an easy step, but it's important to choose your team carefully. Eventually they will become the lifeblood of your drop service business. Consider creating a checklist when interviewing and evaluating candidates for your drop service team.
- What is your level of experience with the service you are trying to provide? Take for example.
- How much training do you need before you can operate to your expectations and standards?
- Are they reliable and deliver work on time?
- Are they easy to communicate and work with?
- Do they live in different areas that create significant time differences? Will it be a problem to complete the project?
You can try searching on freelance marketplace sites like Fiverr, 99designs, Upwork, Guru, FlexJobs, and FreeUp. Once you've narrowed down the good candidates, give them a pilot project to see performance they.
3. Building and Realizing Brands
Once you have a game plan and a solid team, it's time to build your company! If you want to get your customers online, the most important order of business is to be online.
Your website is the most important factor, but you should also consider creating and managing your social media profiles.
There are many website builders to choose from, such as Shopify, Wix, WordPress, and Squarespace. Many offer free trials so you can start building your website before paying anything. Include the following elements on your website and other branding materials:
- A custom logo that captures your brand vibe and personality
- Your background on the brand, why you do it, and what makes you the best choice
- A description of your services and what customers will get from each service (you can choose to include a price or save that part for your sales calls)
- To go the ecommerce route, choose an ecommerce-friendly website builder that lists prices and accepts online payments.
4. Attract Customers with Marketing
Marketing is an important aspect of any business. There's no point in having an amazing brand and website if no one is looking at it, right? You have many options for building your company's reputation, attracting new customers, and retaining existing ones. Here are some.
- Referral Marketing. This is perhaps one of the most cost-effective marketing strategies. Start a referral program that encourages existing customers to refer more customers.
- Marketing Content. Invest in multimedia content such as blogs, videos, emails, graphics, ebooks and even podcasts to educate, entertain and build brand awareness.
- Social Media Marketing. Is your target audience on social media? Find out which platforms they are on, then create a professional content plan to engage them on the channel.
5. Make Your First Sale… Go On!
Some said it didn't feel like the first sale. It can come easy or it can be very difficult. No matter what, the name of the game is to stay committed and not give up.
The more interactions and conversations you have with your prospects, the more you will learn the do's and don'ts.
Pay attention to what your prospects and customers are saying. Is the price too high? Missing a key detail that everyone was expecting? Does your competitor have a strong reputation to match?
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