Honestly dropshipping blows. Even if you can find a company that isn't shady, you will have to compete on prices for that item with all of the other companies that sell it - not easy unless the company does not sell online themselves, or you are the sole person marketing their stuff online.
There are also a ton of headaches with dealing with dropshipping...
- how reliable is the company? how do they handle shipping and handling? how often are their items out of stock? I tried using a company selling dorm room furniture - they ended up being out of stock for 90% of their items and charged shipping and handling for each item ordered (even if they were lumped into the same order). This limited much I could charge, and even then someone ordering 4 or 5 items would have a $30 s/h charge! Needless to say this went nowhere...
- Does the one company you are using carry all the items you want to sell? If not, how are you going to handle dropshipping for multiple companies? You cant very well ask your customers to pay a TON of s/h fees, especially since they are likely to be able to go somewhere else and pay less. You can always lump shipping into the prices, but then you are taking less of a profit per item sold...
-Is the company you are using really the wholesaler? Or just a middleman for a wholesaler? More often than not you will be dealing w/ a middleman importer.
-You really want the headaches of tracking orders, dealing w/ complaints, receiving the orders, sending them to your supplier, etc? Its a real pain in the ass if you aren't the one supplying the product with everything in-house...
-How expensive is the item you are selling? If its not $$$+, you will probably end up with a small profit margin per item after taking into consideration shipping.
I feel the only way to do dropshipping is to find a small company w/ no web sales and approach them with a plan- and ask them to be their only supplier online. I did this with one company, but it ended up going nowhere since the guys I was talking to ended up quiting, and then they started using walmart as a supplier and of course walmart can sell cheaper than I can since they had bulk deals! I did this with another company, and in a month they started selling online - I couldnt undercut their prices and things never took off.
Affiliate is really the easiest way to go- drop shipping is way to much effort for the payout unless you are in a very unique situation like I said above.
Look for small companies, not selling online, develop a drop shipping plan, sell it to them - and make sure there is a nice profit margin per item (and the item is not cheap!). You do not want to do a ton of small drop ship orders...tracking them all is just not worth it.
You can also set up a small help center w/ Yahoo - with an 800 number and all, so you don't have to answer stupid help questions yourself.
Up to you, but even though I'm sure there are people who make good money with drop shipping I feel there are many more that make the same amount with half the effort via PPC aff programs, or whitehat sites with aff ads on them...
