Hi There.
My experience of dropshipping has only been favourable. I dont use the large dropshippers unless I have researched thoroughly to see who is selling what and what their prices are like.
Not all businesses who agree to dropship advertise themselves as dropshippers. Many are wholesalers who will dropship if you ask them. Also, smaller businesses will dropship so it's unlikely you would be in competition with thousands of othe sellers.
Like anything else - I have noticed most of the complaints about dropshipping are from people who have never tried this or didnt do their research before taking the plunge. I have lost count of the people who have thought they were going to make a fortune in dropshipping then found their totally dodgy cheap imported dvd boxed sets get them negative feedback.
The companies I work with have been instrumental in my being left lots of positive feedback for sending things quickly and well packaged - I have emailed the dropshippers and thanked them for making me look good
I think the biggest mistake peopole make when dropshipping is their lack of research of a) the dropshippers b)the products.
I dont have an on-line store - too complicated for me as I only want to work part-time and I have no-where to store stock that doesnt sell.
As an aside - dropshipping is a great way to test products - list a few items and when they look like they are a fast seller - buy a bunch of the same items (dropshippers often have wholesale sites too)and send them out to customers when they sell