Drop Shippers Beware - Pros and Cons of the Drop Ship Game

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Drop Shipping question
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Following on from the earlier Dropshippper List post, here's a thread over at Digitalpoint that's just too good to tack on as a comment to the previous.

Experienced dropship marketers talk about the pros and cons of what can be a very saturated market. This from lorien1973:

I drop ship a lot right now - I'm moving away from the model slowly but surely. If a product can be dropshipped - rest assured there are 10 million internet stores who are selling it. So you immediately throw yourself into a very big pond. Happily, 9.9 million of these stores are part time; so they aren't competition - but they keep their prices so low (Cuz they are only doing it for a little extra cash) that it can lower the overall value of the products you want to carry. Be wary of that.

Truth is; most distributors who make you carry inventory have a VERY low opening order ($300 bucks or so, and $100 minimum orders after that), so its not hard nor does it take a lot of space to get more unique products that you can mark up to your heart's desire or what the market will bear (or is it bare?). And if you ask nice, some of them will even dropship some of their products for you (after you have done your opening order) - especially the expensive ones that take up room or cash. If you go that route, you can also outsource your warehouse to fulfillment companies who will ship for you so you don't have to do that (and its not too expensive either).