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I store and ship all inventory, main reason is I can inspect the products before I ship them + I like the control and not having to worry about someone stealing my customers or their information.
Customers don't care I suppose as long as they get the items. If you are in the US you can often get deals with suppliers/manufacturers to overnight you whatever orders you have and you can then ship them next day to your customers.
I sort of do that now, I stock over 300 products and sometimes we run of something and I can have it overnighted and the customer does not know the difference.
Lots of stores that have a large product line operate in this way, and can offer way more products as "in stock" then they really have.
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