The dropshipping business model is very cost-effective, as you don't have to purchase inventory before selling it. It also eliminates the supply chain element from your online business, so you don't have to worry about shipping an item to your warehouse, then to your customer. You also don't have to deal with storage costs, since the items you sell are never actually in your possession.
Because you don't have to invest a lot of money to sell your products, dropshipping businesses are also fairly low-risk. If a product fails to sell on your website, you won't get stuck with thousands of items taking up valuable real estate in your warehouse. This also increases your flexibility as a retailer—you can quickly pivot to new, trending, or seasonal items even when your previously listed items didn’t sell well.
The biggest downside of dropshipping? You give up a lot of control over your supply chain, product customization, and customer experience. If a dropshipping supplier ships an item late or delivers a product that isn't up to quality standards, it’s the retailer who takes the fall.
Dropshipping also delivers notoriously low returns. Most of the profits on your sales go to your supplier, meaning you have to make a ton of sales in order to make a livable income.
You also have to consider that your supplier isn’t going to work with you exclusively—so any item you sell on their behalf will likely be available on dozens of other websites. And if your potential customers are able to search for your product and find it cheaper elsewhere, it's unlikely that you'll ever make a sale.
Things only get more complicated if you use an overseas supplier. Shipping items from China, Taiwan, or Singapore can be very expensive, so you'll have to decide whether to pass that cost on to the customer. High shipping costs may deter would-be buyers, in which case you might have to eat the shipping costs yourself, cutting further into your profit margin. Using a stateside dropship aggregator (a wholesaler who stocks items in bulk from multiple suppliers) could solve this problem, but make sure the aggregator is thoroughly vetted.