Cases When Dropshipping Is Permissible
Fatwa No: 378148

Question

Assalamu alakumI would like to enquire about selling products online. I would like to sell products that I have purchased and that are in stock and I would also like to add dropshipped products on my website. In fatwa number 321031 and 276988 part 4 it states that it is halal if it is performed as a salam contract and if the conditions for salam are met. Question number 276988 then links question 161689 as a further clarification. However question 161689 states that dropshipping is haraam and does not mention that it could be classified as a salam contract with the relevant conditions that would need to be met. It states that dropshipping is haraam because the products are not in the person's possession and thus one would be making a profit from a product which has not become your liabity.Can you please clarify this for me?The answers that state dropshipping as halal mention that one of the conditions for dropshipping to be halal is that the product ad must make it clear to customers that the product is not the seller's property and not in their possession. If I list that the product would be dispatched and delivered directly from the seller, is this enough to inform prospective buyers that I do not own or have the product in stock? Another condition of salam contracts is that a delivery date is specified. Does for example: 7-25 days for estimated delivery count as an acceptable specified delivery date?Even though I only pay for the product once a customer purchases a product from store, I would like to enquire whether setting my own profit and offering various benefits such as guaranteed return of products and money back if they are unhappy or change their mind.Thank you for your time and help, it is greatly appreciated. May Allah Most High reward you for your time and help.Kind regardsWa alaykom assalam

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 ( may  Allaah exalt his mention ) is His slave and Messenger.

First of all, we thank you for your keenness on learning your religion and seeking to earn lawful earnings and fearing what is forbidden; you are absolutely right in doing this.

What you mentioned about the difference in some details of the Fataawa may be due to the difference of the questions of the questioners, as we answer each question according to its details.

In any case, the issue of dropshipping may be permissible and acceptable and it may not be so.

Among the permissible and acceptable cases where the owners of the sites display images of the goods while they do not own them are the following:

To sell by Salam Sale: In this sale the owner of the site agrees with the customer who demands the commodity to sell him a commodity with specific descriptions, which he receives from him at a specific time to which they both agree. This is exactly like what you mentioned in your question that the delivery date is determined; this is something required in the Salam Sale.

In a Salam Sale, it is also required that the buyer pays the price of the commodity directly in the meeting of the contract. Requesting the goods remain the liability of the owner of the site. Then the owner of the site shall request the described commodity from the factory or from its owner and buys it from him, and then asks him to ship it to the one who is buying it from his site directly, so that it can reach him at the appointed time that is agreed upon between both of them. This method is permissible. It exempts the owner of the site from the shipping fees, and it is also a way to avoid selling what one does not possess because it is not a sale of a particular commodity (which is physically present at the time of sale), but it is rather selling a described commodity, the description of which is based on the honesty of the seller (who is describing it). The conditioning of an appointed time is mandatory, such as determining a day for the delivery of the goods to the customer (the one who requested the commodity).

Ibn ‘Abbaas  may  Allaah  be  pleased  with  him narrated that when the Prophet  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) came to Madeenah, people were paying one, two and three years in advance for fruits, so he said: “Whoever makes a Salam sale, let him do that with a known specified measure, a known specified weight, and appoint a known specified period (of time).” [Al-Bukhaari and Muslim]

The second permissible method is: To inform the customer [who demands the commodity] that the site does not own the commodity displayed in the site, and that he (the owner of the site) will bring it to the customer from its owners. In this case, the owner of the site is only a broker and he is entitled to take a commission in return for the effort of bringing the commodity. In which case, he acts as an agent authorized by the customer who is demanding the commodity. Acting on behalf of someone else in return for a fee is permissible but he must determine his fee to the buyer. In this case as well, he will request the seller to ship the commodity directly to the customer.

The third permissible method for dropshipping in which the owner of the site does not bear the cost of the shipment, is when he is an agent for the owners of the commodity and he agrees with a factory or a given shop, to display the commodity on his site and sell it on their behalf, in return for a commission that is taken from the owner of the commodity. When the sale is concluded, he requests the owner of the commodity to ship it directly to the buyer.

In this last case, he [the owner of the site] conducts the sale contract directly with the customer because he is an agent for the owner of the commodity and acts as if he owns it.

Perhaps in these cases, there is a way out for the owners of sites to avoid selling what they do not possess, and at the same time get a certain profit.

For more benefit, please refer to Fataawa 27508 and 287650.

Allah knows best.

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