The Drop-shipping Dilemma: Why It’s Wrong & Right

The seller is smart, savvy, claims to make millions on Amazon and shares his frustration that Amazon suspended his account. He faces two counterfeit claims.

He knows the products are not counterfeit but now he has to prove it. Amazon typically wants detailed supplier information, invoices and confirmation the seller has contacted the “rights owner “—the person who filed the counterfeit complaint. 


Ultimately, Amazon wants the rights owner to submit a written retraction confirming the seller did not sell counterfeit items. Once that’s completed, Amazon is more likely to reinstate the account.

This seller has a problem. He can’t prove product authenticity. He has no invoices, and he can’t contact “rights owners” and admit what he’s done.

What is he doing wrong? He drop-ships. He has no inventory or suppliers (per se). He adds himself to an existing listing and receives an order. This prompts him to order the product directly from the brand, retailer or other third-party seller.

Per Amazon’s drop-shipping policy. A seller may not:

  • Purchase products from another online retailer and have that retailer ship directly to customers if the shipment does not identify you as the seller of record or if anyone other than you (including the other online retailer) appears on packing slips, invoices, or external packaging.
  • ship orders with packing slips, invoices, external packaging, or other information that indicates a seller name or contact information other than your own.
Why is this prohibited by Amazon?
  1. It creates customer confusion and dissatisfaction. When a buyer receives the product, it does not identify the actual seller. It may arrive with a different seller’s information or may be a product in a Walmart box. There’s no paper trail.
  2. It makes returns painful if not impossible. If the product arrives damaged, who does the buyer contact? He or she has seller information or has the wrong seller’s information. The customer can’t easily return it.
  3. It hurts other sellers. If a product is being drop-shipped from another third-party seller, this seller may be hit unjustly with a return. It may even result in ASIN or account suspension.
  4. It breaks Amazon’s Seller Code of Conduct, which says all sellers must:
    1. Provide accurate information to Amazon and our customers at all times,
    2. Act fairly and not misuse Amazon’s features or services,
    3. Not attempt to damage or abuse other Sellers, their listings or ratings.
  5. It limits a seller’s ability to resolve overall account health issues and policy violations (Condition/Used Sold As New, Infringement, Listings policy, etc.). Without supplier details and invoices, many of these violations can’t be resolved or reinstated.
In this case, the seller likely won’t be reinstated, even with a full “mea culpa” appeal—a detailed plan of action that includes an apology for non-compliance and steps taken to restructure the seller’s business model on Amazon.

In the end, don't dropship unless it's the right way. While the dropshipping game is common, it is dangerous. A seller may outfox Amazon for a while, but not forever.

Did I Mention Dropshipping Is Allowed?

There is an exception to Amazon’s drop-shipping prohibition. Yes, Drop shipping IS ALLOWED when:

  1. You are the seller of record of your products.
  2. You identify yourself as the seller of your products on all packing slips, invoices, external packaging, and other information included or provided in connection with them.
  3. You remove any packing slips, invoices, external packaging, or other information identifying a third-party drop shipper prior to shipping the order.
  4. You are responsible for accepting and processing customer returns of your products.
  5. You comply with all other terms of your Seller Agreement and applicable Amazon policies.

In the end, don’t drop-ship unless it’s the right way. While drop-shipping game is common, IT IS DANGEROUS. A seller may outfox Amazon for a while, but not forever.

different graphical representations of personas inside gears

Amazon Seller Problems?

eGrowth Partners provides a variety of services to get you back to selling fast. From Amazon account reinstatement to strategic growth for Amazon Sellers, eGrowth Partners is here for you in your time of need.


Whether you have questions about your Amazon account, our services, plans and pricing, want to grow your sales, need help covering customer service or need a demo, our team is ready to answer all your questions!
Drop us a line

Sign up for our newsletter

Get valuable, impactful and expert Amazon news and tips directly in your inbox with our newsletter.

Sign up for our newsletter

Get valuable, impactful and expert Amazon news and tips directly in your inbox with our newsletter.


Grab your free copy of our latest ebook and dive into Cynthia Stine’s revelations exposing the true story behind the recent Amazon indictment.