Dropship or wholesale question

Low cost, low profit items can be tough to market. All the merchant, processing fees, and shipping costs that are all either passed on to customers in the form of sale price or taken as a loss by the seller, generally make an item you can get for 5 bucks locally cost 10 online. Now, there are some people who will pay the extra, simply because they don't want to get out, so it isn't impossible to sell low-end products, but it can be a challenge for sure. I notice that higher cost products tend to bring a higher profit margin online. Expensive, small, cheap to ship items with a huge ROI are the best since they are easy to handle, sell quicker, sell higher, and easier and less costly to ship.

Is there a reason you are going after cosmetics or similar products? If I were you, I would steer clear of these types of products simply because they are something that you can find locally very easily.

Although this isn't a hard and fast rule, I would try to find products that meet each of the following guidelines:

1. Not a huge local selection... If people are already out shopping at places that sell cosmetics, they will likely just pick up the cosmetics at the store they are already at.

2. Profit per order... I don't really care what the profit margin is. I just want to know that the time I have to put in to fulfill this order and keep the customer happy is worth it to me. I don't see cosmetics meeting this guideline either.

3. Intent to buy... What I mean here is that you need to look at the numbers. When someone does a google search for "cosmetics" are they in buying mode? Is there enough traffic for that phrase? You really shouldn't take a stab in the dark here. You need a tool that can tell you how many searches are being made daily and what your competition will be like for that phrase. Although there are many tools that can get this done, a tool that I helped develop is Coach's Keyword Tool. You may want to give that a look.