Is it permissible to offer this service (i.e. be a Dropship supplier) to other people who are selling on the Internet?

Question

Dropshipping is a service used regularly when selling on the internet and I will try to explain it as best I can. A Dropship supplier is a wholesale supplier who sells items individually and posts them to your customers. Here is a scenario of how a transaction would take place: First, I sell a product on the Internet and receive payment for that product, including postage costs. Then I purchase that same product at wholesale price from a Dropship supplier and have the product sent directly to my customer. I keep the difference in price as a profit. The product never passes through my hands and the customer is not aware that the product came from a 3rd party. I would like to know 2 things, 1) Is it permissible in Islam to use a Dropship service to sell items on the Internet? 2) Is it permissible to offer this service (i.e. be a Dropship supplier) to other people who are selling on the Internet?

Accepted Answer

Nabi [sallallaahu alayhi wasallam] has mentioned, ‘Don’t sell what is not in your possession.’ In light of the above Hadith, the conventional manner of using a drop-shipping service is not permissible as the middle man is entering into a legally binding transaction before getting the goods in his possession.

The only way it can be permissible is if the middleman clearly states that the money being paid is merely a deposit and the actual sale will only take place at the time the customer receives the goods. The deposit until then will be an Amaanat (trust). It must also be understood that in the event of loss or damage to the goods after leaving the dropshipper, it will be at the middleman’s expense and he will have to return the trust (deposit) to the customer. It is totally permissible to be a dropship supplier.

and Allah Ta'ala Knows Best

Mufti Ebrahim Desai

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