04/11/2022
What is drop servicing ?
Drop servicing is, in the simplest terms, a business model that involves making money by acting as an intermediary to perform a wide range of services. A company or individual offers services that it does not perform directly itself but through cheaper freelancers or agencies. This makes money from the difference between the selling price of the services and the cost associated with having the work done by cheaper contractors. By default, the drop servicing company is responsible for the overall contact with the client while the contractors do their work behind the scenes and are not visible to the service recipients.
A simple example:
You place your ad on the Internet offering to create a website for $2,000. You don't do the work yourself but outsource it to a cheaper freelancer for $1500.
- The client buys the service from you for $2000
- You transfer the service to a cheaper freelancer to do it for $1500
- The freelancer sends you the finished project and you send it to the client
- You earn $500
As a drop servicer, you are responsible for direct contact with the client (the client may ask you to seed minor corrections, etc.) Cheaper contractors mostly remain invisible although some companies choose to let you know that the service is being performed by an executive team.
