Sending transactional or marketing email directly from your own server or basic hosting account works fine at low volume — the problems show up specifically once volume grows or deliverability starts mattering to the business.
It routes your outgoing email through infrastructure specifically built and maintained to have strong sender reputation with major mail providers (Gmail, Outlook, Yahoo) — reputation that's actively managed and monitored, rather than left to whatever reputation your regular hosting IP happens to have.
On shared hosting, your sending IP is shared with other customers on the same server — if another account on that IP sends spam or gets compromised, your legitimate email can get caught in the resulting reputation damage even though you did nothing wrong. A dedicated SMTP service isolates you from that risk.
Any transactional email that customers genuinely need to receive — password resets, order confirmations, receipts — landing in spam is a real business problem, not just an inconvenience. The moment email delivery reliability affects real customer experience or revenue, a dedicated SMTP service is worth the modest cost over rolling your own from shared infrastructure.
