That's an issue that is most definitely impacting on sellers these days, Drop Shipper and Wholesalers alike are using online platforms to increase their own turnover.
It's something that as a seller you need to be aware of, and not always easy as some of these will use a completely different online id to hide their trading identity from customers they are in essence then competing against.
Is it ethical?
Well I guess most sellers wouldn't consider it ethical, however these people are in business to make money, not friends!
Does it mean that just because a supplier sells on the same online platform as you want to sell their products on that there will be no margin at all top do so?
Not at all, but it does depend on the supplier and the product they are selling, but even then you may be able to develop strategies to negate their own marketing techniques.
Bundling is one for example, where a supplier may well be listing several items individually, you may well find two or more items that all work together so far as being able to offer them as a package deal, making your margin one one or two of the products, and selling one or two at cost.
This bundling strategy can then provide a buyer with far more value by buying the bundled option from you, rather that buying each individual item separately from your own actual supplier.
Going against your own supplier isn't the best scenario, but as the world of online retail just gets increasingly more difficult to compete in, it's a scenario that many are going to find themselves in the middle of unfortunately.