There was once a time when working from home was nothing more than a pipe dream, but in the 21st century, the dream is very real. More and more budding entrepreneurs are finding their feet online using many different tactics.
Some people may be striking it rich with an e-commerce store, whereas others may be finding success in-app development.
Two of the most popular business models that allow for a seven-figure income are drop servicing and dropshipping, but to get the most from either, it’s important to know what the differences are between the two. So we decided to compare drop servicing vs dropshipping so you can decide which is best suited for you.
Table of Contents
What Is Dropshipping and Drop Servicing?
Although there are similarities to dropshipping and drop servicing, there are also differences that will affect the work that needs to be carried out.
Dropshipping is a process of selling goods online without having to worry about stock. The person selling the goods will refer sales to an affiliate who fulfil the order and offer a commission as an incentive.
Drop servicing follows a similar approach, but instead of physical products, the person will be selling services. Example of this includes search engine optimization and logo design. Drop servicing would mean the order for service is placed with you, and the service is then outsourced to a professional.
Which Is Better? Dropshipping or Drop Servicing?
Those considering their options will understandably want to concentrate on a business model that yields the most benefits. However, when looking at the two business models, many factors need to be considered to ascertain, which is the best approach.
For example, those with a deep knowledge of technology will find success with the drop shopping of electrical items, whereas those with a passion for search engine optimization and marketing will find that drop servicing is more to their liking.
To understand which is the best business model, it’s important to understand how both models work and what options are available concerning both.
Dropshipping: What Are the Options Available?
In most instances, those looking to promote the sale of physical products will need to consider an e-commerce website. Those considering dropshipping will also need to ensure that they’re using a reliable provider that can be trusted to ship products.
One of the most popular platforms concerning e-commerce platforms is Shopify, especially when it comes to selling goods.
Platforms such as AliExpress are founding favor with dropshippers because of the amount of choice available, although it’s important to check the feedback of sellers.
The Pros of Dropshipping
- Dropshipping can be profitable when choosing the right products.
- Many apps can be used in conjunction with Shopify that are designed for dropshippers.
- No need to worry about storage or stock.
The Cons of Dropshipping
- The wrong product could mean less profit or making a loss.
- Some dropshippers based overseas offer slow delivery times, which isn’t appealing to online customers.
- Some have found that products ordered never arrive despite payment being made, meaning the feedback of the dropshipper can be affected.
- Dealing with refunds and returns can be problematic at times.
Drop Servicing: What Are the Options Available
Those interested in selling services online have a couple of options available to them when it comes to making a profit.
The first option is like that of dropshipping, in that a website can be set up to offer services. As well as having a clear explanation of the services available, the website also needs to offer a secure gateway.
Given that the setting up of the website can require an investment, those looking for an alternative method can consider signing up to one of the following platforms and promoting services. Once an order is placed, you can then pass the order onto a freelancer to complete, keeping the difference in the amount charged as profit.
There can be other platforms worth considering, but when offering drop servicing, quality is more important than quantity.
There are advertising platforms that can be used to source professionals outside of freelancer platforms, as well as social media. However, there may not be as much security on offer, so some further research may need to be carried out.
The Pros of Drop Servicing
Although finding the right product can take some time to research, many find it’s time well spent when it comes to making sales.
- There are very few skills needed to get started.
- It is less risky than dropshipping as there are no physical products to worry about.
- The business can be started for very little investment.
The Cons of Drop Servicing
- Those offering drop servicing will be relying on freelancers that can deliver work late at times.
- It can require a pro-active approach to ensure both freelancers and customers are happy.
Which Should I Choose to Make the Most Money? Drop Servicing vs Dropshipping
One of the most common mistakes those new to either drop servicing or dropshipping can make is assuming one is better than the other. The reality is that both business models come with their pros and cons, and both will offer challenges along the way.
It’s also worth factoring in where your knowledge lies. Some may choose one or the other, whereas others may be able to operate both business models.
Whatever business models are chosen, the right level of research must be carried out in either instance. Understandably, online marketers want to get started sooner rather than later, but rushing the process can be costly.
While there are plenty of opportunities available for those looking to profit from dropshipping and drop servicing, it’s important to offer a service that you’re familiar with. Although services and products are carried out via a third party, there will still be times when customers are looking for a prompt response to their questions.
This reinforces the importance of not rushing into either drop shipping or drop servicing. Taking some time out to review trends, seek out niches offerings, and establish where you will fit in allows for more opportunity in the future.