QA-ID-0014
QUESTION
If I start a dropshipping store online where I sell other companies products online on my store, can I do this as I won’t have the products in my possession, but I intend to make it clear to any potential buyer that I act as an agent taking a commission, I do not hold or have any products in my possession and I am not linked to any company or products.
Would this then allow me to carry on with the business in a lawful and halal way.
ANSWER
﷽
Selling goods without ownership and possession of the goods is not permissible.
The way the dropshipping model works is that you list products on your store without owning them. You set the price of the product with your own markup and profit margin. Once a customer places an order for the product, the order is sent to the supplier who then ships the product directly to the customer. In this entire process, you do not own or possess the goods at all. Selling in such a way is not permissible as ownership of goods is required before being able to sell them on to others.
The alternative to this is to become an agent (wakīl) for the supplier and then sell their products to customers. The supplier then gives you a commission on each sale. In such a case, you do not need to own the goods as you are an agent. You cannot however set the price yourself. The price offered to customers must be the price set by the supplier. You cannot add a markup. Your profit comes from the commission only.
See Majlis e Shar’ī Ke Faisle 2/301.
والله تعالى أعلم
And Allāh Knows Best
Muhammad Kalim Misbahi
