I do buy stuff from AliBaba and sell it on my chickens site. The main pitfall in terms of buying is quality - it can vary wildly from one factory to another. I always buy an item myself before ordering in bulk, to see what the quality's like - and to be fair, a lot of it is very good. Some of it, however, is rubbish (think very
smelly yellow plastic squeaky chickens...).
In terms of shipping, so far I have done it myself which I wouldn't necessarily recommend - you not only have all the hassle of packaging and posting, but you need to deal with all the (considerable) hassle of customers who don't like what they bought, didn't get it or didn't get it on time, or are just having a bad day and take it out on you.
I'm also reminded of an SBIer who had a very successful site about parrots and ended up with a garage full of parrot cages which she'd bought from a similar site and couldn't shift.
When I have some time I'm going to look at "Fulfilled by Amazon". You can drop ship direct from sites like Alibaba of course, just ordering as you get orders, but their delivery time is generally around 30 days, which certainly my customers don't want to wait for. Items also cost less if you order in bulk.
There are some good articles in the "Make It!" series in MHQ - here's a link to the first of a couple about Alibaba
and there are a couple about shipping - here's a link to the first
Hope that helps.