I have a blog that I want to monetize by offering relevant products for purchase to the readers. I've tried affiliate programs but the merchants keep most of the profits -- I'd like to cut out both the affiliate networks and the merchants and offer the products myself.
The products are limited (less than 10) so stocking the items won't be an issue (I'll store them in my basement).
What are the pros / cons of buying discounted inventory and selling direct vs drop shipping products as orders come in instead? One big negative of drop shipping is that the profit margins are low (might even end up being as close a margin as working with affiliate programs).
Think about it this way: are you trying to make money, or offer a good service to your readers?
If it's the first then low volume affiliate/dropship isn't going to make you very much - you'll make much more margin by handling it yourself. Unfortunately, you'll also inherit all the pain too. Procurement, cash flow locked up in inventory, order handling/fulfilment, dealing with packaging/shipping and of course customer service/returns. There's your margin gone.
Dropship at first 100% - otherwise you will be stuck with product that you assumed people wanted when in reality it was a guess.