Inventory vs dropshipping is something you will need to consider if you are going into a retail home based business.
Basically, do you want to stock the items that you sell and ship them out yourself or do you want someone else to stock them and ship them (a.k.a. dropshipping)? Or maybe both.
A lot will depend on what it is you intend on selling. For example, if you're going into the handmade industry, you will obviously be stocking the supplies/items that you are creating. If you want to get into dropshipping you will have to find retailers who have the items you want to sell who also have a dropshipping program.
There's also the middle-road in which you carry inventory AND dropship if this situation works for your particular needs or niche.
There are a lot of benefits to carrying your own inventory, but also some potential downsides. Here is my list of the pros and cons:
Just like with inventory there are ups and downs to dropshipping. Some retailers have better dropship programs than others and you will need to do your research to find the most reputable ones for your home business.
Carrying some inventory as well as dropshipping some items may be a happy medium for you. Personally, this is what I do for my shop, Trends In Twos. Though I do stock most of my inventory, there are some larger items that are more convenient to have dropshipped.
Think about the space you have available to store your stock as this will really help determine the best route for you. You need to be able to keep your inventory clean, protected, away from odors, etc.