So I have some awesome interview today here with Dylan Sigley who is doing drop servicing and have his own course for teaching people to launch their own drop servicing business, you might know dropshipping but drop servicing was new for me. I asked Dylan to come on my blog and share his strategies for drop servicing business.
Check out this interview and learn “How To Start A Drop Servicing Business” from zero and scale to 6 fig profits. Dylan is doing drop servicing and have years of experience doing this business. Lets talk drop servicing and you can understand what is drop servicing in general and how actually you can make money out of it.
Hey Dylan Welcome to my blog BloggersIdeas, Please tell us something about yourself and your educational background?
I grew up in a small town in New Zealand. Then I studied at Victoria University in Wellington where I graduated with my Masters degree. After graduating I started applying for corporate jobs while working part time in a call centre. This is when I hit the breaking point that pushed me over the edge into online business.
Since 2015 I’ve been building little online businesses that have brought me that whole 4-hour work week dream of travel and freedom. My success in online business through Drop Servicing then led me into teaching others the same. So since 2019 through the Drop Servicing Blueprint we’ve been teaching hundreds of students around the world how to build their own Drop Servicing businesses.
What are the best features of Drop Servicing, List top 5 features in detail?
Everyone has different definitions of drop servicing, in the Drop Servicing Blueprint by Dylan Sigley I define Drop servicing as selling high-quality digital services to businesses using a virtual team.
It is similar to sub-contracting. You provide a service and outsource the labor required for that service to freelancers from countries with lower costs of living. Since you’re paying a low rate for a high-quality service, you’re able to achieve high-profit margins on your service sales.
By hiring cheap but skilled freelancers, you can fulfill a service to your customers’ satisfaction while also offering cheaper prices than your competitors. This gives your business a competitive advantage when it comes to marketing your service.
Drop servicing involves outsourcing or subcontracting a service to freelancers who can fulfill the service. Your role is to find clients, or even better, have clients come to you, and focus on selling them the service at a price high enough that you make a significant profit from outsourcing the service.
- Drop Servicing Is Simple
Now you might be thinking “but Dylan Sigley, that sounds all well and good, but how does that work in the real world?”, we’ll break it down for you with a real example.
For example, let’s say John is the founder of a health supplement affiliate website and he is looking for 15 x 1,000-word articles about vitamins, minerals, and other health-related herbs and supplements.
John wants to hire a content writing company, but he’s found that the prices are too high, with most people quoting $100 per 1,000 words.
Now, you come along and offer your article writing service for $50 per 1,000 words.
You hire a freelance writer to write the articles for $20 per 1,000 words, meaning you’re profiting $30 per article.
The total cost for John is $750; your outsourcing cost is $300. That makes your profit $450. This is a 60% profit margin, which is very high, and very lucrative if you scale this business model.
John is happy because he’s saving money, you’re happy because you’re making money, and the freelancers are happy because they’re making money.
These numbers are just estimates, and will, of course, vary based on the drop servicing business model you create. But this should give you a general overview of the basic principle behind drop servicing.
This drop servicing business model can be used for content writing, design, video animation, web development, lead generation, copywriting; essentially any service that can be fulfilled over the internet.
There are five steps for building a drop servicing business.
- Finding competitors and studying their business models.
- Finding teams that can deliver the service(s) at a cheaper price than your competition.
- Creating a compelling offer.
- Building marketing channels to bring in new customers.
- Automating the entire process to free your time and service more customers in the most efficient way possible.
- You Can Start For Free With Drop Servicing
You don’t need any money to start a drop service business. But, as with every business, the more money and resources you have to deploy, the easier and quicker you’ll be able to grow a business.
That said, all you need is an email address.
As the founder, your role is to communicate between your clients and your team. Thankfully, email is free.
Some of the fundamental things you’ll need for your drop servicing business is are:
Website (WordPress): Themeforest, Thrive Architect – Thrive Themes, Divi – Elegant Themes
Domain and hosting: Namecheap, Bluehost
Custom email address: G Suite, Outlook
Business name: Namelix, Shopify Business Name Generator, Panabee
Realistically, these basics shouldn’t set you back more than a few hundred dollars at most. Having the basics makes you look more professional and trustworthy.
Now, some will say “but Dylan Sigley, I have NO money to start!”.
That’s ok, because you can use purely free methods such as LinkedIn outreach, Instagram outreach, and Facebook page outreach or even get sales from the freelancer networks themselves.
Even if you do make a sale via email without a website, you’re going to eventually need an established drop servicing website to help automate your business.
Eventually, you can hire a project manager to automate communication between your team and the client so you can achieve 100% automation. This is made possible through people and software taking you out of the business.
- With Drop Servicing You Have High Profit Margins
It’s not unusual in Drop Servicing to have profit margins of 70% or more. The reason for this is most of the marketing methods we use are much cheaper than say with Dropshipping where you need to spend a lot on Facebook ads. On top of this the clients you’re dealing with are used to working with expensive agencies. So by deploying cheaper teams (at the same quality) you can charge the same as your competitors. Except you get a huge profit margin because of the cost discrepancy between you and your competitors.
- With Drop Servicing You Can Get Recurring Clients
With most online business models it can be very difficult to keep clients long term. With Dropshipping you need to sell, for example, 1000 products to make 4000 dollars profit in a month, whereas with drop servicing, you only need four clients paying you month after month to make ten thousand dollars.
The best thing about it is by selling services that a client needs on an ongoing basis, such as advertising, you can get a client for life. Rather than constantly being out there searching for new clients, by choosing the right business model, you can hit your target income very quickly.
How many active users does your course have in 2021 ? Why is your course the best in the market for drop servicing ?
We have 765 members in the Drop Servicing Blueprint right now. Frankly, there’s not really a course in the market that compares to ours when it comes to Drop Servicing. We are the first to market and a few copycats have sprung up here and there. We are the only course taught by someone actually doing it to this day. This allows us to share the latest strategies and tactics actually working in the real world.
We’ve been able to turn that into potent video training complete with assets, templates, sheets, and step by step tutorials. So because our training comes from real world experience the students who implement it see pretty great results. The next thing beyond being the most practical online business course on the market is our community.
The Drop Servicing Blueprint community is the most helpful and engaged community out there. We have veterans of Drop Servicing crushing it at this point in there helping newbies and sharing their journeys. Then of course I’m in there personally every day answering questions and going live each week for a Q&A coaching session. All of this has led to the Blueprint becoming the most successful entrepreneur training program on the market.
Read here : Drop Servicing Blueprint Review
When you Started Dropservicing what were your initial hiccups. How did you make it so big in the Ecommerce industry?
At the beginning of 2015, I was living in Wellington, New Zealand. Having just finished my Master’s Degree I was feeling lost. Comfortably going about my day, heading to my sales job in a call center and occasionally partying a little too much. Everything was going fine, I felt like I knew what I wanted, on the path society had laid out for me or so it seemed. That was until I discovered online business through a random Facebook ad. I ended up jumping in and buying a course for $5000. From there it took me 3 months to get my first sales and it was a very difficult period. However, after discovering a few simple things that work I got those first sales.
A few months later I hit 5 figures, then 6 figures, and within a year of starting my first online business I began travelling the world. A few years into this I began helping others here and there. This slowly turned into the Drop Servicing Blueprint which I now run alongside my Drop Servicing businesses to this day.
The biggest hiccup throughout this journey was just getting started. I knew about online business and that I wanted to do it for 2 years before starting. Procrastination is the biggest problem we all deal with. Doing the things you know you need to do if you want to achieve your long term goals. Getting over that fear of the unknown is crucial. Once I did that and fully committed to making it happen success came quickly.
What is difference drop servicing vs dropshipping ?
If you’ve seen a ‘Dylan Sigley ad’ before, you’ll know that Drop servicing is a spin on the popular internet business model “dropshipping”.
Dropshipping involves taking a customer’s order and shipping details and giving them to retailers or wholesalers that can fulfil that order and ship goods directly to the customer.
With drop servicing, you take a customer’s order for a service and fulfil the labor required for that service with the help of freelancers, which is sometimes referred to as ‘subcontracting’ and ‘outsourcing’.
To keep things simple:
Dropshipping: Selling a product (e.g smartwatches or clothes) manufactured and delivered by a third party for profit.
Drop servicing: Selling a service (e.g writing, animation, design) produced and delivered by a third party for profit.
How To Start Drop Servicing Business from scratch ?
While there’s a lot to do, getting started is the easiest part.
There are some consistent steps all drop servicers go through in their journey, and it starts by:
- Find a service that’s selling well in the market
For example, writing, web design or video animation are some great options. There’s no need to reinvent the wheel.
Plus, there’s so much demand that there’s room for you to squeeze in and provide a service, especially because you’re undercutting local businesses prices, creating a compelling offer.
- Research what other competitors are doing in the market
Find competitors, and answer the following questions:
What are their prices?
How do they structure their offers?
What pain points do they focus on for their customers?
How are they marketing their services?
What’s their traffic like?
Where is their traffic coming from?
- Research what freelancers are doing
Check the top Upwork freelancers in the market you’re targeting.
How do they position themselves?
Who are they working with?
Who have their biggest projects been with?
- Determine margins
To get your margins, take the competitor price and subtract the average freelance price.
For example, if your competitor price is $5000 for a website, and your freelancer price is $1000, your potential margin is $4000.
Perhaps you’ll undercut your competitor by $1000 for the same quality website, meaning you’re still receiving $3000 on your $1000 invested into your freelancer’s labor.
“But Dylan Sigley, I hate math!”
Well you need to learn to love counting if you want to build a real online business because the numbers literally determine how successful your business will be by telling you what’s working and what’s not, giving you the clay to mould your creation.
- Market market market
Scale up your number of clients by putting out more offers into the market. Once you have proven that your offers are working and it’s competitive enough to create demand that’s relatively easy to close on, then it’s time to scale and automate your business model.
- Automate your entire process
Automate your process so that you have an “A-Z” process from introducing a new client into your funnel to delivering their goods.
Refine and optimize this process to save time using people and software as you pull in more clients into your drop servicing business model.
“But Dylan Sigley, how do I do all of this if I have no idea what one of these businesses should look like?”
When I see people first get started with the ‘Drop Servicing Blueprint by Dylan Sigley’ course, one of the biggest mistakes people make is focusing on what they think people want. What you should do is focus on what’s already working in the market.
This is why it’s so important to do a competitor analysis to understand what’s working for your successful competitors and why it’s working. Doing something that’s never been done before MIGHT work, but chances are it won’t.
When you’re using your competitors as a guide, you’re using data that has proven to give a return, and your chances of success are higher.
It’s simple to find your competition. Simply search for the service you’re providing on Google and type “service” after it. For example, you can search “content writing service,” “proofreading service,” “logo design service,” “branding service,” or “sales video service.”
Create a list of your competition, and see what’s working and why it’s working. Find the common trends between them. Reverse engineer their processes, so you take the guesswork out of what your potential customers are receptive to, this is a process we mention over and over on the Dylan Sigley blog.
Then focus on changing your offer to be more compelling and competitive than your competition within the same framework of their business model to generate profit and sales.
You don’t need to create the next Facebook, Uber, or Google to live a life of freedom with financial independence and location independence. Some people are even hesitant to start because they have the idea in their head that they need a revolutionary idea to start a successful business. But, don’t fix what’s not broken.
The most efficient thing to do is focus on a specific service and niche.
One common mistake is thinking you can do everything. While there are businesses out there that follow the drop servicing model and do everything from web design to video, you must focus on one service or variations of one service when you first start.
For example, your business can focus on writing, or you can have a business that focuses on video animation. You can even focus on a more specific niche to give yourself a competitive advantage such as copywriting, instead of content writing. Either way, it’s important not to go too broad.
Preferably, pick a service you have experience in. If you used to be a web designer, then following a web design drop servicing model is probably a better idea as you’d better understand the nuances of conversation in this industry.
However, you don’t need to have any experience in the industry itself as you’re not the one producing the service. You are simply the middleman between the freelancer and the client.
Is drop servicing legal?
Yes, it’s just a normal agency style business, like any other business services business out there. The difference is it’s completely virtual using teams from around the world.
Is drop servicing profitable?
Yes, kind reader, Drop servicing is profitable. When done right, it’s very profitable.
How profitable you will be depends on your ability to package and sell your service.
But hiring cheap freelancers is only one part of the equation. You must still deliver a high-quality service. If you don’t, you may land a sale or two, but you will not get repeat business. Repeat business is where you can make a lot of money, especially with services that are required regularly.
If you are delivering a high-quality service at a cheap price, and you’re marketing your service to the right people, you will make a profit.
Drop servicing is especially easy to start as you don’t need to know how to produce the service you’re selling. You leave that to the freelancers.
If you stay consistent and follow the right steps, it’s possible and realistic to expect that you can make enough money to replace a full-time job (if not earn even more), without investing the typical 40 hours per week that accompanies a normal job.
“But Dylan Sigley, how long does it take”
Well that depends what your goal is, and how much time and energy you have to put in the work to build the business, when I got started I worked a few hours a day on it maybe, and I landed my first few thousand dollar clients 3 months in then several months later I was running a 6-figure business that allowed me to start travelling.
It’s important to remember that while drop servicing is legitimate and can be lucrative, you do have to put in the work and stay committed to your business to ensure it grows, especially in the beginning stages.
To succeed you need to focus on acquiring customers at the cheapest price possible and give them an offer they can’t refuse.
The bottom line is that drop servicing is great because you don’t do the grunt work, but you reap the benefits. At the same time the customer, freelancer, and you are all happy.
Drop servicing is possible. If there is a demand, there is a supply.
All that is required is for you to supply a service that’s in demand, and position yourself so that you beat the competition and make a profit.
It’s as simple as that.
“But Dylan Sigley, they say it’s risky and unsafe to start a business, oh, and you need to be super smart and lucky!”
In life, there’s this pervasive perception that you go to school, go to university, and then hopefully, get a job related to your degree.
While there is nothing wrong with working hard at a job and earning money, it’s possible to live with more freedom and be free from the constraints of a boss’s schedule.
While drop servicing won’t turn you into an overnight success, and some degree of work is required, it is not difficult to earn enough money to live comfortably, without having to work typical full-time hours.
You just have to put the work in upfront to automate your drop servicing business and have other people’s time work for you.
There are so many opportunities out there, and drop servicing allows us to inject ourselves into the virtual economy and get a slice of the action.
- Freedom of communication
You can contact companies to connect with your team that delivers a service they need.
This team works for you, and you have a project manager who manages the communication between the two.
- Freedom of location
You can live wherever you want because your drop servicing business model is fully online, allowing you to move around and work from multiple locations.
- Freedom of time
Not only can you work where you want, but you can work when you want. Because your business is completely remote, you can remove yourself with people and software. This gives you total freedom, and you don’t even need to spend the majority of your day monitoring and managing business processes.
How do you perform a drop service?
Companies need external help. They spend billions of dollars on the services they need.
In many cases, it simply doesn’t make sense for them to hire employees for specific services when they can outsource work for fixed prices. Furthermore, many companies need services that they simply don’t have the knowledge and skills to do.
It’s too much effort for them to build the infrastructure for a specific service when they can just hire experts that do it daily for other companies. Most companies even have a dedicated budget for these types of services every quarter.
But why would these companies work with you? It comes down to simple economics.
If you’re able to provide a service for them at a similar level of quality to other local service providers at a lower price, then the logical option for them is to work with the cheaper service.
Even though your freelancers are on a site like Upwork, Fiverr, etc. it doesn’t mean that your clients will go looking for the same freelancers on those marketplaces. Companies prefer to work with other companies because it’s easier for them and other companies seem more trustworthy. Companies delivering services have proven systems and processes, which provide certainty, reliability, and consistency.
In drop serving, you are the marketer, and that means you are presenting and positioning your service in the best way in comparison to your competitors.
The US business services sector consists of about 410,000 establishments with combined annual sales of around $770 billion. Using data we’ve collected, we estimate the market to be around $1.2trn, with estimates of up to $5trn when including factors such as market share of unlisted companies.
The takeaway is that the service industry is enormous, and there’s no shortage of opportunity to get a slice of this money circulating by positioning yourself in the right place and providing a valuable and competitive offer.
“But Dylan Sigley, doesn’t that mean there’s a lot of competition?”
Yes, there are a lot of competitors in the market but they’re not all selling the same things to the same people. For example you could sell Facebook ads to real estate agents in your local area and you’ll have no competition.
On top of that, the reason there are so many companies doing it is because each company can only take so many clients, because people make up the service, and only have 24-hours in a day so at a certain point it becomes difficult to become a huge company dominating the entire market, this is good for everyone because it allows us to easily setup a business and plug into the money flows.
Even though this market is enormous, it’s always growing, especially as our world moves more and more online.
Once you learn how to create a drop servicing system for yourself, you can apply it to other services, reinvest profits, and continue to expand and grow multiple systems to scale horizontally.
What is your hiring process & how big is your team?
The best place to find drop service freelancers is on a freelancer marketplace. On these websites, freelancers have profiles you can view and select from based on different categories. You can also post a specific job and have freelancers apply to your job posting.
Some examples of freelancer marketplaces include:
Student job boards
Now, you’re probably wondering, “Dylan Sigley, which should I choose?”
Great question.
The marketplace you choose will depend on which service you’re offering.
Fiverr and Freelancer.com tend to be the cheaper options, but this generally entails lower quality services. Student job boards can be great to find cheap native speaker freelancers.
Upwork is the largest freelance marketplace, and on this platform, you can find some very high-quality freelancers from all categories, including writing, design, web development, video production and so on.
Overall, Upwork and Fiverr are the best places to start. You’ll find everything you need here.
But before hiring someone, it’s important to review their profile, feedback ratings, the number of years of experience they have in their fields, and of course, the price they’re charging.
Focus on high reviews, and look for someone who replies quickly in a professional manner and is enthusiastic about helping you. Don’t rush the hiring process. It’s worthwhile investing some time to ensure you’re bringing on quality freelancers who are committed to helping your business for the long-term.
I’ve input a search filter for graphic designers under the following criteria
Earned over $10k freelancing on Upwork
90% + job success score
Hourly rate of $10 and below
Without even trying I’ve found a long list of cheap graphic designers with a good track record. If you spend time looking, it’s easy to find high quality freelancers at very affordable prices.
- Hire freelancers on a project basis
To start your team, you need to hire employees, but hiring employees means you’re paying them consistently when you don’t necessarily have clients paying you consistently to fulfill their salaries.
That would be risky. What makes more sense for risk mitigation is to hire on a project basis.
Have a pool of freelancers ready and when you close with a client, you can commission the freelancer by paying a fixed price for the project.
As mentioned before, Upwork and Fiverr are great options to start with. They’ll allow you to only spend money only when it’s giving you a return on your investment.
Typically you can pay 50% upfront for a project and 50% upon completion. Though, the structure of your payments may depend on the project and the freelancer. 50/50 tends to be the simplest and most fair approach, especially for larger projects. While paying after the work is completed is typical for smaller commissions.
Other tasks such as project management can be more suited for per hour payment.
- Hire a freelancer full time
If you have consistent repeat business you can bring on freelancers full time. This way you can save money as you’ll likely pay less with an hourly rate or regular salary instead of contracting work. You should only hire full-time and regular freelancers on payroll if you have the work to support it.
- Have your own office and team
This is completely optional. You may want an office with your team, or maybe you want a fully remote team.
While having a remote team is a great option, growing a team in your in-house office is a possibility too. It’s up to you and your personal preference.
The point is that drop servicing gives you the freedom to make your own choices.
“But Dylan Sigley, how do I implement this practically to go from nothing to something?”
What are the top class strategies to automate ecommerce business in 2021 ? As ecom is now booming industry and it will be trillion dollar industry in 2023.
The process is pretty simple. It involves hiring people and deploying software to automate as many activities in your business as possible. For example if you want to hire a project manager. You just go on Upwork and find a freelancer for $5 an hour then train them in your processes. Next you get a project management software like Trello and train your freelancer to use it. Congratulations, you’ve just automated a third of your business.
What are the top 3 biggest AHA moments you’ve had in the exciting world of digital marketing?
That it’s possible to get sales online
That it’s possible to automate the entire business
That it’s possible to build an entirely virtual business
What’s your work schedule like? How many hours do you work per day, per week? Are you a night owl, or more a day time kinda guy?
I prefer working in the mornings then having the evenings off. When I was in travel mode I was maybe working up to 2 hours per day max. Once began focusing on teaching and helping others this really grew to about 8 hours a day. Now I feel a responsibility to my students, not just a focus on my own pleasure. Because I already experienced that fully automated online business for years. My goals now are more focused on helping others do the same.
What books had the biggest impact on your business and why?
The One Thing: For Focus.
The War Of Art: To Destroy Procrastination.
Deep Work: How bringing your full attention to your work allows you to get more done in less time.
4 Hour Work Week: It’s possible to build a fully automated business that funds a life of freedom.
What are your favorite industry events (when it’s not COVID) and why? Which one got you the most ROI if you consider the costs of investment to go, buy the ticket, and spend time there?
I’ve been to a few events but I would say most of them are just pitch fests. They’re good for motivation and networking. Otherwise you’ll get more done by focusing on studying and implementing practical tactics of online business.
5 Must Know Things Before Starting Drop Servicing Business?
It’s a real online business, not a magic button.
If you’re going to do it, commit to going all in.
Make sure the entrepreneurial lifestyle is what you really want.
Have the right information and plan.
Don’t give up. Everyone I know who committed to taking action and didn’t give up has succeeded.
How has COVID-19 and the pandemic affected your business? What’s the one thing you miss the most that you can’t do because of this coronavirus stuff?
It’s been really amazing for Drop Servicing because now everyone must do business on the internet, which is what Drop Servicers specialize in. The one thing I miss is travel and doing cool things outside.
How do you see the 60 year old version of you, where would you like to be when you reach this age? Career wise, family wise, friends wise. And maybe even, geography wise?
I don’t really have this grand vision of myself beyond building cool things that help others achieve their online business goals. In terms of Drop Servicing, as the structures and systems of companies become more remote and more digital, they encounter greater efficiencies, meaning lower costs.
Every business has a primary goal of maximizing profits, and by working with remote and digital structures, companies save time and money through increased efficiency.
The trend of companies becoming more remote over the last five years is growing and will likely continue to grow considerably in the future.
Companies are far from being completely digital, but this transformation is happening quickly, and more companies are making the transition to having more of their infrastructure being digital.
“But Dylan Sigley, won’t these companies think it’s weird we work online only?”
Actually no, this is a selling point for drop servicers. Most employees state they want to work remotely, and remote employees save companies money, driving increased profits. It’s a win-win.
The issue is that many companies don’t know how to go remote. As a drop servicer, you can command a massive amount of work from companies who want to transition to a more virtual structure.
You have gone through my blog. What are your suggestions for my blog ? Do you have any feedback or annoying experiences on my blog?
I didn’t really notice anything I’d change but then again I’m not an expert on blogging!
Did you like this awesome interview about drop servicing with Dylan Sigley and I will recommend to check out his course and I did a review too for his course and I am sure this course will help you start drop servicing business from zero. Please share this interview with your friends and tell them about drop servicing business.
Read Top Posts :
- How To Start A Successful Dropshipping Website: (100% Working)
- Get Exclusive Discount On Worldwide Brands
- SaleSource Review: New Dropshipping Platform (Pros & Cons)
- Need Help In Dropshipping Store? Try AliDropship Dropshipping Services
- Ultimate Guide On How to Start Dropshipping With WordPress
- How to Start Dropshipping In India 2024 ( How It Works?)
- 100+ Top Best Shopify Dropshipping Stores Most Inspiring
