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Dropshipping Business and Selling What One Does Not Own

 
Question:
assalamu’alaikum warahmatullahi wabarakatuh Dear Scholar(s), I am currently joining Dropshipping Business with an Electronic Merchant. The Merchant sells a lot of Branded Products i.e. from ASUS, Lenovo, HP, DELL, and so on. as you know that the merchant is not the Brand(s) Owner (nor the Product Owner). The Merchant is One who is trusted by the Brand(s) Owner in selling their products. The Question is : Can I join Dropshipping Business with that kind of merchant since the merchant is not the Owner of the products ? (as you know that basically, Dropshipping Business is permissible in ISLAM) Hope for your answer Thanks before Wassalamu’alaikum warahmatullahi wabarakatuh
Answer:

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.

If this merchant, whom the brand owners trust with regard to selling their products, buys the products from the owners to sell them for his own benefit, or they delegate him to sell the products on their behalf and authorize him to seek the help of whomever he wants, then there is nothing wrong in dealing with him and promoting his products in return for a commission which he pays to you.

For example, he says to you, “The price of this product is one thousand and any extra amount is yours to keep,” or he says to you that for every piece you sell, you get a specified commission. There is nothing wrong with that because an action performed by the agent on behalf of the principal is deemed an action by the principal himself, as stated in Durar Al-Hukkaam fi Sharh Majallat Al-Ahkaam.

You may buy the product from the merchant for yourself and ask him, or the company, to ship it to the buyers who purchase it from you.

However, if the merchant you mentioned is not acting as an agent of the owners of those products and he only displays images of the products on his website, and then, when he finds an interested buyer, he sells the product to him before owning it (acquiring full possession of it), and then he buys it from the warehouse owners and asks them to ship it to the customer, then this transaction involves a Sharee‘ah violation, namely, selling a commodity before having ownership and possession of it.

The Prophet, sallallaahu ‘alayhi wa sallam, said: “Do not sell what you do not have (or possess).” [At-Tirmithi]

The solution is what we have previously explained: either he may agree with the warehouse owners to display their products on his website to act as their agent, or he does not conduct a sale contract with a buyer before he owns and possesses the product, or he conducts a sale contract to sell a clearly defined item to be delivered to the purchaser at a specified later date in return for a price that he receives from him at the time of concluding the contract.

Allah knows best.

 

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