Yes, dropshipping is allowed by Amazon, as long as your business follows Amazon's dropshipping policy, you can use dropshipping for your business on Amazon.
To use dropshipping services for your business on Amazon, you must:
Be the seller of record of your products
Identify yourself as the seller of your products on all packing slips, invoices, and external packaging
Be responsible for accepting and processing customer returns of your products
Amazon change their terms/policy from time to time,
Please check the links below to get redirected to the updated Amazon Dropshipping Policy / Amazon Prime Terms and make sure your business follows Amazon's dropshipping policy.
Am i allowed to use Prime account for purpose of resale?
Prime members are not permitted to purchase products for the purpose of resale, rental, or to ship to their customers or potential customers using Prime benefits.
Are we allowed to sell branded products from Amazon?
Absolutely not, we do not recommend selling brand products in your store unless you have a license and permission to sell this brand. We give you the ability to import products to your online store. But, It is your responsibility to ensure you're not violating any copyright and trademark laws.