At this point, dropshipping probably sounds too good to be true. Unfortunately, a lot of other people thought the same thing, which makes the dropshipping industry highly competitive. Because of all this competition, the profit margins are low as merchants compete to offer the lowest prices on popular items.
This can be a vicious cycle, as you need to do a lot of business to compensate for your low-profit margins, and yet you have a lot of competition for every sale. You are also at the mercy of the manufacturers or suppliers you work with, as they have control over fulfillment and returns, yet you have to deal with the customer.
It can also be harder to build a brand as a dropshipper, given that you are selling a variety of other businesses’ products.