Hi Roger, dropship allows you to sell without the problems of overstocking. I would advise you to find a dropshipper in the markets you are targeting. Profit margins are obviously lower but you run less risk.
Are you just starting your own business now? What kind of products do you intend to sell? No matter what, you still hv to do a decent job on marketing your business.
I am based in New Zealand and am thinking about selling in the larger markets of the USA or UK. Freight makes profit margins impossibly low for most products sold from here so I am thinking about how total reliance on dropshippers works. I understand from my research that many with online stores do a mix of drop ship and their own handling locally,am I correct? What are the limitations associated with living where I do in such a small local market .What advice do you have?
Honestly, you might consider looking at affiliate marketing rather than trying to run a dropship-only website. The nominally lower commissions relative to dropship profit margins are largely offset by many advantages affiliate marketing has over dropshipping (the main one, in my opinion, being that rather than try to scrounge for decent products at competitive prices, you practically have the entire Internet at your disposal, since virtually every major online retailer has an affiliate program.)
Track your traffic and conversions, and rather than spending endless hours trying to decide what to sell, let your own traffic tell you what kind of buyers your site is attracting, then do a narrow product search among dropshippers for that kind of produt(s). If it continues to scale up, don't worry about where you are -- there are fulfillment services such as Amazon offers where you can have your merchandise stocked and who will handle shipping relatively affordably, solving the problem of living in such a beautiful but bafflingly far-away place.