Dropshipping vs. Drop Servicing: Which Online Business Is More Profitable?

Welcome back, Empire Builders! Today, we’re going to talk about a question I hear a lot. What’s better, dropshipping or drop servicing? Which will make you more money online? They’re pretty similar, so we’re going to go over what each one is and then get into which online business model is more profitable. So let’s jump right in!

What Is Dropshipping?

Dropshipping is a business model where you find a product to sell and use a supplier who will ship them directly to your customers. Instead of having a ton of products that you have to pay for upfront, store yourself, package, and ship to buyers, you just make sales. The supplier takes care of the rest. This is a great business model because you don’t have to put up the initial investment in the hopes that the products sell.

What Is Drop Servicing?

Screen grab of Peter Pru discussing the downsides of drop servicing

Drop servicing is a similar concept. But instead of selling physical products, you sell services. Basically, you find buyers who want a service—like writing, editing, or graphic design—then you take the job and collect the money, but you pay someone else to do the work. Really, you’re a middle-man between the client and service provider.  

The Pros and Cons of Each

Each of these business models can bring in good money if done correctly. They both have their strengths and weaknesses, though. Let’s go over the pros and cons of each one. That will really illustrate the difference and understand which one is going to get you the most money.

Pros of Dropshipping

You can make a lot of money without a lot of time, effort, or a large initial investment. In fact, you don’t have to worry about inventory or shipping at all. You just bring in the buyers, make the sales, and the rest is completely done for you. One of the great things about dropshipping is how much of it can be automated. You might get some customer service emails. But many of them are very similar, and you can use templates to reply.

Cons of Dropshipping

It’s not a get-rich-quick scheme. You do have to put in the work, just not as much as starting many other businesses. You have to find your niche, build a funnel, and advertise to drive leads to your funnel, which requires some time and money to set up.

Pros of Drop Servicing

It can be excellent money. Depending on the service you’re providing and the quality of the work, you could get upwards of a couple of grand a month from each client you work with. If you have a network of people who know you or a good reputation in the industry, that could mean steady clients and real money.  

Cons of Drop Servicing

Frustrated drop servicing business owner handling clients

One of the biggest drawbacks is that you’ll have to deal with the clients. When it comes to services, people expect a certain outcome. When you deliver the work, it often won’t be exactly what they wanted or expected. It’s very common for them to request changes, and you have to arrange them. You end up spending a lot of time on emails back and forth between you and the client, as well as you and the service provider.

Another issue is that you often don’t want the clients to know that you aren’t doing the work yourself, especially if it’s your reputation that brings them in. The last thing you want is for clients to come to you because of your reputation for doing quality work, only to find out that you aren’t the one doing it. That could destroy your business and your reputation, so it’s risky.

Another thing to consider is that you have to be good at advertising your services and getting sales. Bringing in steady clients and high-paying work is the hardest part. If you don’t have an existing foothold in your field, that could be difficult. If you aren’t providing something that the person or people doing the actual work can’t do for themselves, then why wouldn’t they just start their own business and make more money, right?

Another thing to keep in mind is that you have to be able to guarantee the quality of the work. Especially if you’re charging a couple of grand a month, the quality of the work has to be worth it. You can sell lower-ticket services, but then the profit is also going to be less. So, there’s a real balancing act that you have to be careful with here.

Why Dropshipping Is More Profitable

Screen grab of Peter Pru discussing the positives of dropshipping

Dropshipping is much easier to set up, it doesn’t require a specialized skill, and much more of it is easy to automate. Dropshipping suppliers buy huge quantities in bulk for a crazy discount which means you get a great deal. It’s even better if the supplier does their own manufacturing. It’s a great way to earn passive income that works well in the long term and doesn’t take a lot of time or money to start.

Drop servicing is harder to automate, so it takes a lot more time. You have to keep the client and provider separate, so the client doesn’t find out you aren’t doing the work, the provider doesn’t find out how much you’re making, and they don’t cut you out. The profit margin isn’t as good, it isn’t as passive, and it takes a bigger time investment to do properly.

Start With Your Preferred Business Model

You can do both at the same time, which I do myself. But without a team and a system in place like I have, it’s harder. In general, drop servicing just comes with a lot more headaches and fewer rewards than dropshipping does, especially if you’re just starting out. Dropshipping is super easy to scale, which means more money. But finding new clients for drop servicing isn’t as scalable, and each one you add means more time.

Okay, guys, that’s all I have for you. I’d love to hear what you think in the comments. To learn more about dropshipping and start building your own eCommerce empire, sign up for my masterclass. I’ll teach you how I made a full-time income online with a 5-page funnel and without touching a product, building a site, or investing in ads. I’ll even throw in the $100k funnel template FREE just for showing up. You can also subscribe to my YouTube channel for frequent tips and insights. Remember, your empire starts now! Tagged : / / / /