The supply chain...
I operate a dropshipping business, dealing in sim free mobile phones and PDA/Smartphones, UK to UK. I've been in the game for a year or so so thought i would share my thoughts.
I used to sell on EBAY and still do sometimes - DigicomKing, but the PAYPAL + EBAY fees took £25 off my bottom line, so I set up my own website with a business account.
What I have learned is, if you want reliable, genuine, professional suppliers look at the OFFICIAL supply chain. Every major manufacturer has an appointed sole distributor for a country and they supply them and them alone. Do they only supply in bulk? No! Do they need VAT registered companies? NO! Do they dropship? YES mainly!
On EBAY I make the occasional profit e.g 1st week of November was good I dropshipped 4 x LG RENOIR @ £25 profit each and 2 x Samsung Pixons @ £20 profit each. All in a week. That's £140 in a week. Had I sold these from my site however it would have been nearer £200 with no FEES!
Any other supply route other then the official distributor is not official and the goods should be questioned!!
Also... I found it's worth finding the cheapest online stores for a given product using google product search, and then emailing them asking if they would droship. You'll be surprised at the responses!
OH and... avoid eastern suppliers i think! That's a red herring!