When I was first looking into dropshipping I quickly discovered there are a lot of sharks out there who love taking your money in "registration fees", and then you find the items they supply are worthless or their T's & C's are pretty much borderline illegal.
Personally, I'd do the following...
1. As said, see if there's a market for what you want to sell. Are there 1000 + 1 sites out there selling what you would be selling? Why would people buy from you instead of them? If you find a niche or a unique angle to sell your product, you can stand a chance in a saturated market. But you'll have to offer more to your highly valued customers.
2. Only bother to investigate Dropshippers recommended and used by already established sellers. You can go on any forum related to DS and Ecommerce and there will be a wealth of people to ask who you should go to for supplying your products. If you type UK dropshipping into Google, one specific company comes up again and again. Once you take a look at their T's & C's, you'll find that they take ZERO responsibility for anything, and you will be responsible for paying for undelivered/returned/faulty stock! These companies make their money from selling false promises and getting you to pay, not from actually selling stock through people like us.
3. Go with a template ecommerce solution for the first time around. It's all going to take a lot of work to get the shop up and running anyway, so an "out of the box" solution is the cheapest method to get started while allowing you to offer all the facilities of a top-notch professional site. Don't go with any template or paid solution from your DS, they're bland, cheap looking and copied across the net. I use
www.daily.co.uk, and while there are a few bugs in the designing of the store, once you get used to it it's far easier to manage and most of the SEO, marketing and so on is taken care of with a little input of words.
4. Write ORIGINAL content for all your products. This will take a lot of time and effort, but without original content Google will not place you in search against the thousands of other sites selling exactly the same products. I experienced this first hand, and I've still not reached 100% original content. Google knows it, and my search traffic from Google shows it too. As I've been adding original content, I've seen my search traffic rising steadily.
5. Set up Google analytics and Webmaster Tools. This is key to knowing how your site is performing and how Google sees it. Analytics isn't flawless, and Google isn't either, but it really is the best way to get "an idea" of how your site is doing. And on that, when Google really annoys you by not sending you traffic, don't freak out and out of desperation fall for one of those "I'll get you 500 unique visitors a month for only £***" they are a scam and will only mess up your data for a month with hundreds of 100% bounce rate "visitors" who miraculously all spend only 1 second on your site.
6. This should really be higher up the list, but there's so much of equal importance.
When you do start selling through your own shop, consider VAT and delivery costs. Always make sure you've got this pinned down with every item of stock. Check with your DS the TOTAL (you'll probably need to calculate this yourself) then consider if you can really make a profit. If an item costs you £10 from your DS, then £11.75 after VAT, then £14.35 after postage, but most of your competition are selling it for £14.40, is that 5p really worth the effort and will it sell at all against your competition?
There's plenty more. But I've covered some of it at least.
It looks scary, but it really isn't. It does take a lot of work to be original and successful, and I'm nowhere near being top of anything after only three or so months. But if it's something you have a passion for, it can be great fun, and you could create a very successful business out of it with some luck and some clever thinking.
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