This post is some important shit.
Most countries in which there is any substantial number of vertebrate fossils have laws in place to regulate their trade; the above-mentioned Russian mammoth ivory trade is one important instance. There are so goddamn many frozen mammoths, you have no idea. (Which, considering that they only went extinct a few thousand years ago, isn’t that surprising.) The chair of our paleo department is a mammoth ivory specialist, in fact, so I know exactly what kind of research can be done with mammoth ivory, and it more-or-less requires intact tusks; so all of the fragmentary specimens, which are a lot of what is recovered, are perfectly OK to sell. Even dinosaur fossils, those from Mongolia/China/the US for instance, can be sold once they have been reviewed by official government staff paleontologists and confirmed to not be of compelling scientific interest! Which boils down to “do we have lots of specimens like this”, more or less, so IOW if you want to buy a loose dino bone you probably can, but if you see skull material for sale (or basically anything sauropod) you’re justified in assuming it’s either illegal or fake.
OTOH, in the world of invertebrate paleontology where I work, there are basically no rules on what can be bought and sold. As a result we academics have a sort of symbiosis with the amateur and professional fossil hunters. They’re often the real experts when it comes to collecting, and will often know everything about collecting sites that we have only seen as GPS coordinates; they’ll have spectacular home collections that are often willed to public museums, in addition to all the stuff they expertly prepare and sell to other collectors; and a lot of them belong to organizations that interact with academic paleontology via public institutions. In exchange, what we provide is the scientific background to figure out which ones are interesting, which is NOT always the same as which ones fetch a good price, and the research expertise that occasionally results in a contribution to the scientific literature with their name in a byline. I myself worked with the gentleman who runs crinus.info for my dissertation work; my first paper uses many of the (absolutely gorgeous) specimens on his website, and credits him accordingly.
People have a lot of different motivations for being interested in natural history. For some of us it’s all Science! all the time. For others it’s a pretty object, or a trophy. The latter is not actually an impediment to the former, and in fact (as OP points out) selling fossils and arrowheads and stuff is an important spur to a lot of people’s curiosity and interest in supporting science!
That said, sketchy merchants do exist; e.g. you’ll hear stories occasionally about people who excavate and abscond with Mongolian dinosaur skeletons or Native American artifacts. (also LOL ELGIN MARBLES) If you are looking at buying a fossil or artifact and your sketchy-merchant-dar starts going off, find someone from your local natural history museum. There’s usually someone who can help you sniff out whether the object is (a) real, (b) legal, and © ethical.