Disadvantage 2 – Dependency
If your dropshipping partner collapses, so does your business – or you'll at least find yourself in hot water. You have no control over what they do. You can mitigate this by having several partnerships, but these will have a cumulative effect on your margins and will ironically reintroduce some overhead.
Disadvantage 3 – No quality control
Is a customer unhappy because their product arrived broken or its box was dented? They'll blame you for it, not your third party. You have almost no leverage over your dropshipping partner, especially if you're just a start-up. Of course, any sane partner would try their best to keep you happy, but not all businesses care about all customers equally – neither will you.
Disadvantage 4 – Less flexibility in pricing
If you manage your own stocks, you can set pricing pretty much on-the-fly. Dropshipping will undercut this, not just because of the margin issues discussed earlier, but also because there will be a middle man responding to your price change requests. This also means you won't be able to haggle with customers who want a custom-based offer from you – though this may be a blessing in disguise for some entrepreneurs.
Disadvantage 5 – Limited customer service
You can't add personal notes to your packages when you dropship and your customer proximity will be limited. With logistics out of your hands, you must put faith in your dropshipping partner that they will step up to the plate and make the customer experience a good one for your end buyer. It's a good idea to do some reputation research first if this area is especially important to you. The more expensive and upmarket your product is, the more people will expect corresponding service levels.