As in any business, there are risks involved in dropshipping. One example is back ordering. Back ordering occurs when a seller requests the wholesaler to 'drop ship' but the product is sold out. To avoid such an incident, constant contact with the wholesaler is necessary. Wholesalers are busy firms and must keep merchandise moving. If it is possible to establish a good relationship with a wholesaler, then this should not be an issue.
A good wholesaler will keep retailers updated, but it is a business owner's job to be aware of the quantities that the wholesaler has available. Dropshipping is an easy way to get started in online sales. Many wholesalers have private member areas that show product quantities. This is an excellent feature to keep retailers aware of the inventory supply.
Feel free to post any other risks that I might have left out!
http://www.worldwidebrands.com/wwb/main_products.asp?kbid=16376
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