Quick answer. Amazon allows dropshipping only when you are the seller of record and nobody else is identified on packing slips, invoices or packaging. Buying from another retailer, including Amazon or another Amazon seller, and having that retailer ship straight to your customer is prohibited without exception. Online arbitrage is not banned, but retail receipts often cannot prove authenticity the way supplier invoices can. When an account is suspended, the Business Solutions Agreement lets Amazon withhold payments for as long as it determines risks persist, so released funds depend on resolving the suspension or the violation behind it.

Arbitrage and dropshipping sellers are often suspended for reasons that never show up in their metrics. A retailer’s packing slip in the box, a supplier’s return label on the carton or a stack of store receipts that cannot answer an authenticity complaint is enough. The account stops, the balance stops with it, and the seller is left trying to recover money tied up in orders already shipped. The way out runs through the policy that was broken and the documents that prove the problem is fixed. Funds follow the account decision. They are not released on a separate track because the seller needs cash.

Amazon’s Drop Shipping Policy

Amazon defines drop shipping as allowing a third party to fulfill orders to customers on your behalf. Amazon states this is not acceptable unless it is clear to the customer that you are the seller of record. The policy lists two kinds of conduct as violations.

• Retailer-to-customer shipping. Buying products from a third party, including Amazon or another seller, and having that third party ship directly to your customers when the shipment does not identify you as the seller of record or shows anyone else on packing slips, invoices or packaging. Amazon describes this as strictly prohibited without exception.
• Third-party identification. Shipping orders with packing slips, invoices, packaging or other information that shows a seller name or contact information other than your own.

The first violation is the one that catches most arbitrage sellers. Placing an order on another retail site and entering your Amazon customer’s address as the shipping address is the textbook case. The package arrives in the retailer’s box, often with the retailer’s packing slip or gift receipt inside, and the customer can see that the item came from somewhere else at a different price. Many customers report that to Amazon, and Amazon treats it as a violation regardless of whether the product was genuine and on time.

What a compliant dropship setup needs

Amazon allows sellers to use another company’s fulfillment service, a third-party logistics provider or a drop shipper, under conditions. You must have an agreement with your supplier that makes you the only seller of record and the only entity identified on packing slips, invoices, packaging and any information sent with the products. You must remove any packing slip, invoice, packaging or information that identifies a different seller or supplier before the order ships. You remain responsible for accepting and processing customer returns, and you must comply with the Business Solutions Agreement and Amazon’s policies.

Amazon’s own selling guide on dropshipping states the same structure in practical terms. You must have an agreement with your supplier identifying you as the seller of record, so you own the products before customers buy them. Products and materials, including packaging, packing slips and invoices, must be free of any references that identify a third party, because a customer who finds those references may not know whom to contact. You are responsible for returns and for customer service that meets or exceeds Amazon’s policies. Amazon states there are no Amazon fees specific to dropshipping, though selling on a Professional plan costs $39.99 a month plus selling fees.

Amazon states that violating the policy may result in a restriction of your ability to sell using the Merchant Fulfilled Network. In practice, a seller who has been dropshipping from retailers often faces more than one problem at once, because the same orders can generate late shipments, cancellations, A-to-z claims and authenticity complaints.

Arbitrage Versus Dropshipping and Where the Risks Sit

Sellers often use the words arbitrage and dropshipping as if they mean the same model. Amazon treats them as different risks, and the appeal that works for one fails for the other.

Online arbitrage held in your own inventory

When you buy stock from retailers, receive it yourself and ship it from your own location or send it to FBA, the drop shipping policy is not the issue. The question becomes whether you can prove the items are authentic. Amazon’s Anti-Counterfeiting Policy makes the seller responsible for selling only authentic products and for providing records of authenticity when Amazon asks. Retail store receipts show that you bought an item. They do not show the item’s supply chain, and they often do not carry the supplier details Amazon expects to see on an invoice.

Dropshipping from a real supplier

A seller who dropships from a wholesaler or manufacturer under a written agreement is in the model Amazon permits. The risk is operational. If the supplier inserts its own invoice, uses branded cartons or prints its return address on the label, the shipment identifies a third party and the policy is breached even though the agreement exists. The fix is in the supplier’s packing process, and the evidence Amazon wants is proof that the process changed.

Why Amazon Holds Your Funds

The Business Solutions Agreement allows Amazon to withhold payments for as long as it determines that risks persist where your actions or performance may result in returns, chargebacks, claims, disputes, violations of the agreement or Amazon policies, legal violations or other risks to Amazon, customers or third parties. The agreement also states that to be eligible for disbursement you must refrain from deceptive, fraudulent or illegal activity and stay in compliance with Amazon’s Program Policies.

Two facts follow from that language. First, a hold is tied to Amazon’s risk assessment, not to a fixed calendar. Amazon does not commit to releasing funds on a specific day when an account is suspended for a policy violation. Second, the conditions for release are the same conditions that resolve the suspension. If Amazon still sees open claims, unresolved complaints or an unremedied policy breach, the risk it cites in the agreement has not ended.

For authenticity cases the language is more direct. Amazon’s Anti-Counterfeiting Policy states that Amazon does not pay sellers until it is confident customers received authentic products, and that it may withhold payments if an account sold inauthentic goods. An arbitrage seller facing authenticity complaints is therefore asking Amazon to accept evidence about the products before the money moves.

Related guides. Can You Sue Amazon Over a Suspension or Held Funds? What the Seller Agreement Says About Disputes and Amazon Suspension Myths.

How Amazon Reviews These Cases

An arbitrage or dropshipping appeal is reviewed against the specific notice on the Account Health page. The reviewer compares three things. The first is the violation Amazon recorded, such as a drop shipping complaint, an inauthentic item complaint or an intellectual property notice. The second is your explanation of how orders were fulfilled. The third is the documents you attach. If those three do not tell the same story, the appeal fails.

For drop shipping violations, the reviewer wants to see that you understand how the shipments identified another seller, that you have stopped that fulfillment method and that the new method keeps you as the only identified seller. For authenticity complaints, the reviewer wants invoices that cover the ASINs and timeframe in the request, from suppliers the reviewer can verify. Amazon allows pricing to be removed from invoices. It does not allow any other edits, and an altered invoice turns an authenticity case into a document integrity case.

Amazon’s reviewers also check whether the explanation fits the account data. If you claim you ship everything yourself but the tracking numbers on your orders belong to a retailer’s carrier account, the reviewer will notice. If you claim a wholesale agreement but the invoices you attach are store receipts, the claim and the evidence conflict. Accuracy is the starting point of every successful appeal we prepare.

How to Get Your Money Back Step by Step

1. Read the notice and the Account Health page. Identify every open violation, whether drop shipping, authenticity, intellectual property, order defect or a related account issue. A hold usually stays until every item that justifies it is resolved.
2. Stop the fulfillment that caused the problem. Cancel any pending retailer orders addressed to Amazon customers and move open orders to a compliant method, either shipping from your own inventory or through a supplier under a seller of record agreement.
3. Map how each affected order was fulfilled. Build a list of the orders in question with the source, the shipping method and the documents you hold for each one. This list is the basis for the root cause in your appeal.
4. Collect the documents that match the violation. For drop shipping, collect the supplier agreement, the supplier’s written confirmation that it removes its own paperwork and a sample packing slip in your name. For authenticity, collect supplier invoices covering the ASINs and dates requested.
5. Write the appeal. State the root cause plainly, list the changes you made and describe how you will prevent a repeat. Attach only documents that support those statements.
6. Remove listings you cannot support. If you cannot document authenticity for certain ASINs, close those listings and say so in the appeal instead of submitting weak evidence.
7. Keep serving customers. Fulfill outstanding orders where the account allows it, answer buyer messages and process returns and refunds.
8. Track the balance. Watch your Payments reports for reserve and hold amounts once the account decision changes, and keep a record of what was outstanding on the suspension date.

For drop shipping violations

Explain exactly how orders were fulfilled, for example that you purchased from an online retailer and had the retailer ship to Amazon customers. State that you have stopped that practice and on what date. Show the new process, which means either a supplier agreement naming you as the only seller of record, written confirmation that the supplier removes its own paperwork and packaging, and a description of your returns process, or a move to holding inventory and shipping it yourself or through FBA. A drop shipping appeal that promises to be more careful without changing the fulfillment model gives the reviewer nothing to approve.

For authenticity complaints

Provide supplier invoices covering the ASINs and timeframe Amazon requested. The invoice should show the supplier’s name and contact details, your name and address, product descriptions that match the ASINs and quantities that cover the units sold. Amazon allows pricing to be removed, but no other changes. If you sourced from retail stores and only hold receipts, say so honestly. Explain which listings you have closed, and describe how you will source from authorized distributors or the brand going forward. An appeal built on honest receipts and a credible sourcing change is stronger than one built on documents that cannot be verified.

Keep fulfilling and refunding

Amazon’s A-to-z Guarantee policy states that claims can be granted automatically if an account is deactivated while orders are outstanding or customers have unresolved issues. Each granted claim is a cost recovered from your balance and another negative signal on the account. Handling open orders, returns and messages while the appeal is pending protects both the money and the case.

Our Amazon suspension and reinstatement team handles arbitrage and dropshipping suspensions. If funds are held through a payment processor rather than Amazon, see our merchant processor disputes service.

The Documents That Decide These Cases

Arbitrage and dropshipping appeals are won or lost on paperwork. The list below covers what each document must do.

• Supplier agreement. A signed agreement that names you as the seller of record and the only entity identified on packing slips, invoices and packaging. It should state that the supplier will not include its own paperwork, branding or contact information in shipments.
• Supplier invoices. Invoices from a verifiable supplier, with names, addresses and contact details for both parties, product descriptions matching the ASINs and quantities covering the units in question.
• Sample packing slip. A packing slip in your business name, showing what the customer now receives.
• Order fulfillment log. A list of affected orders with the source and shipping method for each, so the root cause in your appeal can be checked against the account data.
• Returns process. A short description of how returns reach you or your designated return address, how refunds are issued and who answers buyer messages.
• Brand authorization. Where a brand has filed intellectual property complaints, a letter of authorization from the brand or a retraction of the complaint is the document that resolves that item.

Mistakes That Keep Funds Locked

• Arguing the product was genuine. In a drop shipping case the violation is the retailer’s identification on the shipment. Proving the item was authentic does not address it.
• Submitting edited invoices. Removing prices is allowed. Changing names, dates, quantities or product descriptions is not, and it can end the case.
• Using invoices from suppliers that cannot be verified. Invoices from sellers with no website, no working phone number or no matching business registration usually fail.
• Abandoning open orders. Letting orders go unfulfilled or unrefunded after suspension leads to granted A-to-z claims and chargebacks that come out of the held balance.
• Opening a second account. A new account registered while the first is suspended is likely to be linked and restricted, and it gives Amazon another reason to treat the held balance as risk.
• Sending repeated appeals with the same content. Each rejected appeal with no new evidence weakens the next one.
• Treating the money as a separate dispute. The agreement ties disbursement to compliance. An appeal that asks for funds without fixing the violation does not change the risk Amazon cites.

First-Time Versus Repeat Violations

A first drop shipping violation on an account with otherwise clean history usually comes down to showing that the practice has stopped and that a compliant method has replaced it. The appeal can be short. It names the fulfillment method used, the date it stopped, the replacement process and the documents that prove it.

A repeat violation is harder. If Amazon has warned the account before, or restricted Merchant Fulfilled Network selling, a new violation tells the reviewer that the last plan did not hold. The appeal must explain why the earlier fix failed, what is different now and how the seller will verify that the new process works on every order. For a repeat authenticity case, the reviewer looks for a full change of sourcing, not a promise to buy from better stores.

Accounts with both drop shipping and authenticity complaints need both problems addressed in one plan. Fixing the shipping paperwork does nothing for an open counterfeit complaint, and a stack of invoices does nothing for a retailer’s packing slip found in a customer’s box.

Legal Duties That Follow a Dropship Model

Amazon’s policy is not the only rule that applies. In the US, the FTC’s Mail, Internet, or Telephone Order Merchandise Rule requires a seller to have a reasonable basis for any shipping time it states and, if it states none, to expect to ship within 30 days of a properly completed order. If the seller cannot ship on time, it must offer the buyer the choice to accept the delay or cancel for a full refund. Refunds for orders paid by card through a third-party creditor are due within seven working days of cancellation.

The FTC states that the seller who solicits the order is liable for violations committed by a fulfillment house or drop shipper. Using a supplier to ship does not move the legal responsibility for shipping times or refunds to that supplier. When the FTC considers enforcement, it looks at whether the seller made reasonable efforts to prevent violations, such as contracting for compliance, placing test orders and monitoring complaints. Those same steps make a strong prevention plan in an Amazon appeal.

In the UK, distance sales carry cancellation rights. GOV.UK states that customers can cancel within 14 days of receiving an item, then have another 14 days to return it, and that the seller must refund within 14 days of receiving the item back, including the cost of standard delivery where the customer paid for it. A UK seller using a drop shipper must be able to accept those returns and pay those refunds, which is the same responsibility Amazon’s policy places on the seller of record.

Amazon publishes the Business Solutions Agreement separately for each region in Seller Central. If you sell in the EU or UK, read the version for that store before you rely on any clause about withholding or disbursement.

How to Prevent the Next Hold

• Hold inventory or contract properly. Either buy stock and ship it yourself or through FBA, or dropship only from suppliers who sign an agreement making you the sole seller of record.
• Test your supplier’s shipments. Place orders to your own address and check every box for packing slips, branding, return labels or inserts that name anyone other than you.
• Source from documentable suppliers. Buy from manufacturers or authorized distributors that issue invoices with full business details, and keep those invoices for every ASIN you list.
• Avoid restricted and brand-protected listings without authorization. Listings for brands that actively enforce their rights generate intellectual property complaints that arbitrage sourcing cannot answer.
• Watch Account Health weekly. Respond to warnings and policy notices while they are warnings, before they become a deactivation and a held balance.
• Keep your returns process in your control. Make sure returns reach you or your designated return address and refunds go out on time.

See also Amazon Account Suspended? How to Get It Back.

Frequently Asked Questions

Is dropshipping allowed on Amazon?

Yes, when you are the seller of record and no other seller is identified on packing slips, invoices or packaging. You must have an agreement with your supplier to that effect and remain responsible for returns and customer service.

Can I buy from another retailer and have them ship to my Amazon customer?

No. Amazon states that buying from a third party, including Amazon or another seller, and having that party ship directly to customers without identifying you as seller of record is strictly prohibited without exception.

Is online arbitrage allowed on Amazon?

Amazon does not prohibit it outright, but products must be authentic and you must be able to provide records of authenticity when asked. Retail receipts often do not meet that standard, so arbitrage sellers face more risk from authenticity complaints.

Why is Amazon holding my funds?

The Business Solutions Agreement allows Amazon to withhold payments while it determines that risks such as returns, claims, chargebacks or policy violations persist. In authenticity cases, Amazon also states it may withhold payments until it is confident customers received authentic products.

How do I get held funds released?

Resolve the suspension or the violation behind the hold through an appeal on the Account Health page, with a clear root cause, the changes you made and documents that prove them. Keep fulfilling and refunding open orders while the appeal is pending, because granted claims reduce the balance.

Get Help Releasing Your Funds

Submit your case for a free assessment, or book a consultation.

You can also see all our marketplace suspension services.

Sources

• Amazon Seller Central, Drop Shipping Policy
• Amazon Seller Central, Amazon Services Business Solutions Agreement
• Amazon Seller Central, Amazon Anti-Counterfeiting policy
• Amazon Seller Central, Amazon’s A-to-z Guarantee claims
• Amazon, Dropshipping on Amazon
• Federal Trade Commission, Business Guide to the FTC’s Mail, Internet, or Telephone Order Merchandise Rule
• GOV.UK, Accepting returns and giving refunds