What Is Drop Servicing?
Drop servicing is the way of working in which a person acts as a middle-man and makes successful deals. It is a service which is given to the customer for some decided price (say $150). Then getting the work (service) done by someone else and for some lower price (say $77).The middle-man earns his commission.
Drop servicing is also known as “service arbitrage.” This means the selling and purchasing of different items or goods and earning commission due to price differences in the market.
This is shown in the image below:
How Does Drop Servicing Work?
Let’s understand the process of Drop servicing with a common and easy example. Say you know a client who requires a logo design for $750.You approach him and ask for the requirements related to the logo design and make an agreement over the final price ($750). The client wants the logo within 10 days to launch his website. Now is the time to perform drop servicing whether you are a designer or not, But you hire someone else to create the logo according to the requirements.
But with this third person (Logo designer) you set some lower price say ($550) and the designer is ready and willing to do the job for the price. The freelance designer provides you the logo within 7 days and you transfer it to the client, Now, through drop servicing You’ve gotten paid $750 from the client and paid out $550 to the freelance designer. You earned $200 just by drop servicing.
Who can do “drop servicing”?
Everyone can do this, whether you are a designer, developer, writer, or related to any other field, you can do drop servicing to earn a handsome amount. In this, you simply outsource the work and deliver a client to a willing service provider just by acting as the middle man.
Drawbacks of “Drop servicing”
This practice of drop servicing has many benefits but the major drawback an individual may face while doing this can be Low-quality products or delay in delivery time
Quality can be easily compromised in drop servicing because if a middle man is not so honest and just want to complete the deal to get his commission as soon as possible. He will make a compromise and will ignore important considerations from the clients. Similarly, there is the possibility that you don’t deliver requirements with clarity and the third person who is willing to perform the job don’t understand his job then the final results will not be satisfying
Delay in delivery time
Sometimes the agreements are not finalized with proper attention and delivery time is not finalized. When clients are in hurry and you take the responsibility to perform the job but don’t find a suitable person to accomplish the job on time, then time delays occur, because the final product is not ready. Therefore it is mostly advised to not deal with a client who is in hurry especially in drop servicing.
Is it ethical to do drop Servicing?
Yes! It is ethical to do this unless you are not lying to the client about any single thing. You should deal in a proper ethical way and understand their needs. You should be willing to understand their requirements completely and then hustle for the third person to complete the job. Make sure to behave responsibly and provide good quality service to the clients
So you can start drop servicing in 2022 to earn a side income. It can increase your network of clients and other service providers (designer, developer, writers, etc). The only thing needed is honesty and responsible behavior to act as a middle-man and earn your commission