My semi-annual anti-dropshipping rant will now commence:
If you are a newbie, and cannot afford real wholesale stuff (eg. pallets or gaylords of merchandise) then the answer to the question "dropship or wholesale?" is _neither_. Dropshipping at the individual, work-from-home kind of level is total rubbish, and I have no idea why it is continually trotted out as something people should try to make money. (No offence Salehoo, you know I love you.)
If you cannot afford to actually buy, inventory, market and possibly take a dead loss on even a single load of wholesale merchandise, take the educational road and get into affiliate marketing. Pick your niche, find some companies to represent, and get to work. You will learn many valuable things along the way, eg. how to build and maintain a website, product research, how to gauge search volume for a given product and terms related to it, social network marketing etc. etc. etc. etc. without pouring money through a sieve for some dropshipping outfit.
At the individual, work-from-home level (I mention this because the problem I am describing is not with the actual practice of dropshipping, which is very common at the corporate level) absolutely no one benefits from your dropshipping efforts but eBay, PayPal, the dropshipping company. Not even the consumer benefits, because chances if he bought it from you at your dropshipper+eBay fees+markup price then he's an idiot who could have gotten the same thing vastly cheaper if he'd looked around a bit. By contrast, if you are simply running an affiliate site or sites in the same niche, your costs are comparable, yet you have access to a virtually unlimited number of price-competitive suppliers of all the top name brand items in your niche -- not refurbs of year-before-last's model being sold for 10% under replacement cost, but all the best current stuff. Profit margins on most dropshipping are so paltry that even Amazon's trivial 4% base affiliate commission is competitive.
As your efforts product traffic and sales, you can track what seems to be bringing people in and making you money, and look for ways to capitalise on that specific subset of your traffic, rather than trying the shotgun approach. ie. you cast a wide net with the best and most competitive products out there, leave the close and the order fulfillment etc. to professionals, yet you get to keep the data -- search terms, click statistics, etc. -- upon which you can build a solid business.
Again, the answer to the question "dropship or wholesale?" is, unequivocably, "affiliate marketing."
"Failure is not when you fall down. Failure is when you don't get back up."