Here’s 5 Reasons Why Drop Servicing is Better than Dropshipping

Darius Gaynor

Years ago when I first started selling online, one of my first customers was a club promoter who wanted more followers and likes for his Instagram. This was before Instagram was owned by Facebook and it was easy to sell fake social numbers.

I told the club promoter that the followers and likes will be fake, but he did not care. All he cared about was that the followers and likes do not disappear so it looked like he had more of a social media following.

I already had a freelancer from Fiverr that was ready to provide the service for me. I sent the freelancer the Instagram username to add the followers and the link of the photos for the likes. My customer saw his followers and likes slowly going up.

His Instagram page went from 2,000 followers to 10,000 followers. His photos went from less than 25 likes to over 100 likes. He was happy and gave me a great testimonial. He shared my branded drop servicing website to his friends then I got more sales.

 

 

The beauty of dropservicing digital tasks is I did not have to worry about shipping and inventory. I can charge whatever price I want and get bigger profit margins. Services can cost as low as only five dollars up to more than a hundred thousand dollars. It is also way easier to build your own branded website with drop servicing than it is with dropshipping.

Fashion Nova and Wish did an amazing job growing their dropshipping businesses, but they also spent a lot of marketing dollars. The reality is that most dropshipping stores fail and it is harder to build a brand that people trust.

Dropservicing or outsourcing digital tasks is nothing new. It has been around for many years just like drop shipping. You may have even paid for service before and thought the work was being done in house. When it was actually outsourced to someone in the same country or a different country for less the price you paid for the service.

Here are my five favorite reasons why I love drop servicing better than dropshipping.

 

Dropservicing vs Dropshipping

 

1. You are not shipping anything.

We live in an era of customers wanting everything delivered to them and as fast as possible. In dropshipping you are up against giants like Amazon and Walmart who can deliver products to homes within 48 hours after the customer makes their purchase.

In the drop shipping business your products are most likely delivered in five to thirty days after a customer orders on your website. Unless your product cannot be bought for around the same price and cannot be delivered faster, you will have a lot of problems with getting orders.

I know the dropshipping experts say “Just sell products that solve a problem for people in a niche.” I understand that, but it is very hard to get a sale if you tell customers it will take up to thirty days to solve your problem. They want good quality products and they want it delivered to them fast.

Most dropshipping stores source their products from China and use websites like AliExpress. The product has a cheaper price but you also risk the quality of the product being cheap. I had a product that was from China but shipped from a warehouse in the USA.

The customer was happy the product was delivered within five days, but when she opened the package and touched the product. It broke so easily! The customer was very mad so I had to give a refund and had her ship the product to my address. I rarely had a refund request for my drop servicing business. I made sure the service was good quality work before the digital task was delivered or completed.

 

 

2. Don’t have to worry about inventory.

If you ever tried dropshipping whether you had a successful store or not, then you know inventory can be a headache. So many dropshippers had sales that they had to refund due to their supplier running out of inventory.

You have to stay on top of making sure your supplier has the products in stock while you are promoting your drop shipping store. If you don’t then you risk having to give refunds to your customers and as you know there are fees for refunds that you don’t get back with Paypal, Stripe, and other payment solutions.

Those fees can add up quickly over time and hurt your business!

Dropservicing websites do not have to worry about inventory because it sells digital services. All the work is done online and delivered to the client’s email addresses. You don’t need shipping addresses unless you want to send them a gift or thank you letter.

 

3. You can charge higher prices.

Selling services is all about trust and you don’t have to be the cheapest price. The higher the price the more potential clients will see your dropservices as better quality work. There is a big difference between a $5 logo and a $200 logo. There is a big difference with a SEO service that costs only $500 a month and one that costs $5,000 a month.

People have bigger budgets when it comes to buying digital tasks. You don’t want to deal with the customers that don’t want to pay much for a service. You want the ones that will pay what your service is worth as long as you provide value and solve their problems.

In the past, I sold a website for $10,000 and I sold a website for $500. The client that only paid $500 was a headache, so much I almost canceled and gave the person their money back. The client that paid ten grand, was very easy to work with.

You just have to close the sale, provide good customer service, and make sure the freelancers complete the tasks. Always have back up freelancers just in case and never be afraid to charge more than your competitors!

 

4. Easier to Build Your Own Brand

You want to build your own brand name that people love and trust. When people think about a phone, they think about Apple. When people think about soda, they think about Coca Cola.

If people are thinking about a podcast cover art, make them think about your website called PodCovers for example.

It is easier to build your own brand with drop servicing than it is with dropshipping. When real estate agents want a website, they will go to EasyAgentPro. When crowdfunding campaign owners need help, they will go to Funded.Today.

Both are good examples of service-based websites that are an authority in their niche. You want your dropservice business to be a branded authority in your niche. This is how your business goes from zero dollars to six or seven figures a year.

 

5. Bigger Profit Margins!

A big con of owning a dropshipping business is the low-profit margins on each sale. You will have to do more volume when it comes to selling other people’s products. A dropservicing business can make more money with less volume of sales.

If you are selling high ticket services then you only need a few sales a month to make more than $10,000 a month. Even low and mid ticket services have up to 90% profit margin per sale. Every sale you make for a drop shipping business, most of the money goes to the supplier.

In drop servicing, you can charge double or even triple the price of what the freelancers charge. Only half of the sale or less goes to the freelancer. You will have more profits for re-investing in marketing or other ways to grow your drop-serviced based business.

In dropshipping, unfortunately, most of the money you make also goes back into marketing. You don’t get to withdraw much money for yourself. I don’t know about you, but I like having more money in my pockets. If you are struggling with a dropshipping business, then I highly recommend starting a drop servicing business today!

 

Watch this video to learn more:

 

I recommend learning from my e-book guides to get started. Click HERE

If you just want a team to run the business model for you and interested in automation then click HERE

By Darius Gaynor

Founder of DollarPassion

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AffiliateLabz
4 months ago

Great content! Super high-quality! Keep it up! 🙂

Heather F
4 months ago

Interesting perspective. I haven’t heard of drop servicing before

Breonna
4 months ago

So true! A lot of the money in dropshipping goes back into marketing plus there’s upfront cost of the products and even returns.

Drop serving the profit margin is a lot bigger and you don’t have to account for returns really!

Great article Darius!

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