It depends on the finish. The matte shades will definitely make dryness stand out. Use lip conditioners/scrubs and you should be ok. On very dry lip days, I just use a gloss on top to mask the dry/cracking a little bit.
Exfoliating your lips first will definitely help - along with a primer. I have very dry lips so I exfoliate my lips before wear lipstick a lot of the time. Lush cosmetics sells some really yummy lip exfoliating product and I know that ELF cosmetics sells a lip exfoliator for $1 :)