Depending on the person you contact, there are still these negative and positive issues in dealing with a Wholesale-Drop Shipping business.
Let us try to know what drop shipping is.
With drop shipping a wholesale product, you do not have to work with the records on it much so you would not be stocked on it. Many of the warehouses of the wholesalers are stocked with large quantities of product so you do not have to worry auditing. This is how your business works, your costumer will order your product on your site and you will contact the supplier to deliver the goods to your costumer.
Here are some positive outcome:
There is no need to invest a larger quantity of products. No need for you to work had in the inventory of the product and find a good area to stock them all and drop ship them to your clients. You just have to list the best selling product and later find costumers buy them online! No matter how small or big your products are, even the quantity does not even count, they will still be sent to your clients.
The Negative side is:
The only problem you will encounter is the number of competitors, and you have to stay competitive especially if you are selling on eBay, Alibaba, SaleHoo or Amazon. There are times that your suppliers will run out of products your are selling and this will cost you much especially when you are selling in an auction site. When you buy in one time, you will get a wholesale price, but if you buy in bulk, you may be able to save more. You do need to be responsible in drop shipping your products which they call a drop shipping fee and you should know where to get that when you are selling a product. Since, you are not to work on the inventory, but you still need to list order and you might be needing other people to do it for you where apparently issues rise in often times. This is happening solemnly, but you can never escape from the fact that it is really happening.
Beware of the scams in the net for the suppliers. Example of this is in « mall type setting » where they require membership. Where they promise to give thousands of products to display on your place, and all you have to do is post them on your site Just get rid of these scams, why? First, their price are actually higher than the retailers and you can never get out of the membership that easy.
In one way or another, there is always a need in running business like this. Since many are also making money out from it the devil way.