Should a grocery or food store in Saudi Arabia dropship or hold stock?

Not a decision about the business — a decision about each product. Dropship the long tail you are still testing; hold the few lines that reorder, because those are the ones where margin compounds and where a slow delivery costs you a repeat customer rather than a first one.

How to decide, line by line

A practical rule: once a line sells consistently for two months, price out holding it. If the improvement in margin covers the storage inside one turn of stock, hold it.

Dropshipping trades margin for not holding stock, and the trade only works while traffic is cheap. For a grocery or food store in Saudi Arabia, the answer turns on one thing in particular: Grocery margins are thin and baskets are large, so the whole model lives or dies on delivery cost per order.

What is different about Saudi Arabia

Saudi Arabia is the largest ecommerce market in the region by some distance, and the most phone-dominated.

Cash on delivery remains common in Saudi Arabia, which changes the economics of every refused delivery.

What is different about a grocery or food store

The part nobody plans for is returns: if the supplier will not take one back, the store is the returns department.

Where a mobile app comes into it

Weekly reordering is the behaviour, and an app that remembers the last basket removes most of the work.