Absolutely no doubt that wholesale is a far better option than dropshipping if you have the ability to use that method. Volume buying gives you volume buying discounts, which of course then make you more competitive in an environment such as an eBay. Of course the problem is that not everyone can afford to buy wholesale or they don't have the space to hold the stock if they can.
Dropshipping offers certain benefits over wholesale, but it can't rival price. When someone starts in online sales with no to low start up costs then there is a payoff, and that is in the case of dropshipping, price per item. Not every drop shipper charges account fees, but it's getting more and more popular for them to do so. Having said that, that charge is one of the highest I have ever personally heard of.
I would ask them if they have some sort of a premium membership program for high volume account owners. Something where you will be offered a greater discount for a high selling account. If so, then you might have a chance to sell at cost for the first 6 months or so, just to cover your costs. Build up sales and then be in a position where you can get a better per item buy price from them and then you can set about making some money.
To be honest, it's an idea, but they would need to be offering a substantial discount for me to sign on to that sort of deal. Makes no sense to do all the work for nothing for 6 months, then find that what ever discount they offered wasn't going to make me much more at all. It sounds to me like they are a better matched supplier for someone with their own online store, not one with the competition that eBay brings.
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