I sell in other venues besides Etsy and I also have made an agreement with another online venue to drop ship my items. At first I was a bit nervous about it. I talked and talked and talked to them about many of the different situations that may arise, timeframes, what their clients expect time wise for shipping, what my costs are for shipping, and what I am able to do. We came to an agreement I was comfortable with.
I got everything in writing, signed contracts, and have sold successfully through their site and drop shipped to their clients. It was worth it for me because the people on the other end are super organized, and can advertise and reach an audience on a scale that I'm not able to do yet. I ended up pricing my items a bit above wholesale because that was what I was comfortable with. Our split was 40/60 not 50/50 plus they cover shipping.
I guess my advice would be to make sure you feel comfortable with the situation and that it is beneficial to you in the long run. Also, know your exact shipping costs and timeframes ahead of time to make sure you are getting your costs covered. I hope that helps.